1. (a) As used in this section, "noncovered health care expenditures" means the costs to a health maintenance organization for health care services:

   1. (1) that are the obligation of the health maintenance organization;
   2. (2) for which the enrollee may be liable in the event of the health maintenance organization's insolvency; and

   3. (3) for which:

      1. (A) no alternative arrangements have been made that are acceptable to the commissioner; or
      2. (B) statutory deposits and net worth of the health maintenance organization are determined by the commissioner to be inadequate.

2. (b) If noncovered health care expenditures exceed ten percent (10%) of total health care expenditures, a health maintenance organization shall deposit cash or securities that are acceptable to the commissioner with:

   1. (1) the commissioner; or
   2. (2) an organization or trustee approved by the commissioner through which a custodial or controlled account is maintained.

3. (c) The deposit made under subsection (b) must have a fair market value:

   1. (1) calculated on the first day of each month; and

   2. (2) maintained for the remainder of the month;

      of not less than one hundred twenty percent (120%) of the health maintenance organization's outstanding liability for noncovered health care expenditures for enrollees in Indiana, including incurred but not reported claims.

4. (d) The commissioner may require a health maintenance organization to file periodic reports, including reports on liability for noncovered health care expenditures and audit opinions, that the commissioner considers necessary to monitor compliance with this section.

As added by P.L.203-2001, SEC.24.