PURPOSE: This rule implements sections 354.705, 354.707, 354.710, 354.717, 354.720 and 354.722, RSMo relating to the financial requirements for the operation of prepaid dental plans. This rule is authorized under the provisions of section 354.723, RSMo.

Editor’s Note: The secretary of state has determined that the publication of this rule in its entirety would be unduly cumbersome or expensive. The entire text of the material referenced has been filed with the secretary of state. This material may be found at the Office of the Secretary of State or at the headquarters of the agency and is available to any interested person at a cost established by state law.

1. (1) Assets of a prepaid dental plan will be admitted and included in determining the financial condition of the prepaid dental plan only if included within one (1) or more of the following list of admissible assets:

   1. (A) Investable funds invested as follows shall be deemed admissible assets:

      1. 1. Any asset or investment described in

and limited by sections 376.300, 376.305 and 376.307, RSMo; and

1. 2. Any asset or investment representing

the purchase, lease, construction, renovation, operation or maintenance of facilities from which dental benefits under the plan will be performed or property as may reasonably be required for the principal office of the prepaid dental plan or for other purposes as may be necessary in the transaction of the business of the plan; and

1. (B) Other assets shall be determined admissible assets, as follows:

   1. 1. Reinsurance recoverables;
   2. 2. Data processing system;
   3. 3. Premium receivable from any agency

of this state, of any political subdivision of this state or of the United States;

1. 4. Accrued interest receivable, if accord-

ing to generally accepted standards of accounting for prepaid dental plans such interest is probably collectable;

1. 5. Inventory of dental supplies, but only

if according to generally accepted standards of accounting for prepaid dental plans such supplies are used by the prepaid dental plan in connection with the direct provision of dental services;

1. 6. Funds paid by the prepaid dental plan

into escrow for the purpose of purchasing or building offices or facilities from which dental benefits under the plan will be performed, but only if according to generally accepted standards of accounting for prepaid dental plans such offices or facilities are for use by the prepaid dental plan in connection with the direct provision of health care services;

1. 7. Goodwill and other intangible assets.

Any goodwill or intangible asset must be amortized on a straight-line basis over a period of five (5) years or less. Any goodwill or intangible asset accrued after April 1, 1990 will be admissible only with the prior consent of the director;

1. 8. Amounts receivable on account of

coordination of benefits or subrogation, limited to the actual amounts receivable or the amounts received during the prior year, whichever is less;

1. 9. Any other asset expressly approved in

writing by the director.

1. (2) No asset shall be admissible except as stated in section (1). The following list is a nonexclusive list of nonadmitted assets and no item listed may be admitted in determin- 20 CSR 200-1

ing the financial condition of the prepaid dental plan:

1. (A) Premiums receivable net of bad debt allowance when the receivable is greater than ninety (90) days past due, except as allowed in paragraph (1)(B)3.;
2. (B) Prepaid expenses, except as allowed in paragraph (1)(B)6.;
3. (C) Security deposits;
4. (D) Automobiles;
5. (E) Office furniture and equipment;
6. (F) Computer software;
7. (G) Letters of credit, except to secure reinsurance credit as outlined in section 375.246, RSMo, pledges to purchase stock or other guarantees by outside organizations;
8. (H) Capital leases; and
9. (I) Any asset expressly disapproved in writing by the director.

1. (3) Liabilities shall be determined by the instructions to the National Association of Insurance Commissioners (NAIC) blank annual statement form for health maintenance organizations or any blank annual statement forms designed specifically for prepaid dental plans except the following need not be reflected as liabilities:

   1. (A) Capital leases; and
   2. (B) Any debt subordinated and approved pursuant to 20 CSR 200-1.070.
2. (4) In lieu of the examination by the director or any of his/her duly appointed agents, the director may accept a full report of an examination or audit of an independent certified public accountant. The report shall be based on the standards set out in this rule.

AUTHORITY: section 354.723, RSMo 2000.* This rule was previously filed as 4 CSR 190-11.280. Original rule filed Dec. 12, 1989, effective April 1, 1990. Amended: Filed Dec. 14, 2000, effective July 30, 2001.

*Original authority: 354.723, RSMo 1987.