1. (a) At the time of the initial qualifying examination, an applicant for a certificate of authority to operate an HMO must have acceptable and unencumbered assets in excess of all of its liabilities equal to or greater than the required minimum surplus.
2. (b) The types of assets acceptable for an applicant to possess at the time of the qualifying examination are cash, demand or time deposits which qualify for coverage under the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, obligations of the United States government, and obligations of the State of Texas.
3. (c) After the qualifying examination, the applicant must maintain unencumbered assets in excess of all of its liabilities by an amount equal to or greater than the minimum surplus requirement until it receives its certificate of authority, and thereafter, the HMO must meet the minimum surplus requirements of the Insurance Code Article 20A.13, by maintaining acceptable unencumbered assets in excess of its uncovered liabilities equal to or greater than the minimum surplus requirement. A liability may not be considered a covered liability until the applicant receives its certificate of authority and becomes a licensed HMO.
4. (d) Notwithstanding subsections (b) and (c) of this section, foreign HMOs seeking admission to this state which are actively conducting business in other states, in addition to approved non-profit health corporations authorized under the Insurance Code Article 21.52F, shall be required, at a minimum, to comply with the Insurance Code Article 20A.13(j) at the time of the qualifying examination.

Source Note:The provisions of this §11.801 adopted to be effective January 1, 1980, 4 TexReg 4625; amended to be effective December 6, 1984, 9 TexReg 6013; amended to be effective July 15, 1986, 11 TexReg 3075; amended to be effective August 17, 1992, 17 TexReg 5360; amended to be effective November 2, 1998, 23 TexReg 11347.