1. (a) On or after September 1, 1999, at the time of the initial qualifying examination, an applicant for a certificate of authority to operate an HMO must have unencumbered assets of the type described in subsection (b) of this section in excess of all of its liabilities equal to or greater than the required net worth established in Insurance Code §843.403.

2. (b) The types of assets required for an applicant to possess at the time of the qualifying examination are lawful money of the United States of America, bonds of this state, bonds or other evidences of indebtedness of the United States of America or any of its agencies when such obligations are guaranteed as to principal and interest by the United States of America, or bonds or other interest-bearing evidences of indebtedness of any counties or municipalities of this state. Lawful money of the United States of America includes deposits in an institution that is a member of the Federal Deposit Insurance Corporation. Demand deposits, savings deposits or time deposits, of the type that are federally insured in solvent banks and savings and loan associations and branches thereof, which are organized under the laws of the United States of America or under the laws of any state of the United States of America may not exceed the greater of:

   1. (1) the amount of federal deposit insurance coverage pertaining to such deposit; or
   2. (2) 10% of the issuing financial institution's net worth, provided that such net worth is in excess of $25 million;
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 net worth requirement until it receives its certificate of authority, and thereafter, the HMO must meet the minimum net worth requirements of Insurance Code §843.403, by maintaining unencumbered assets in excess of its liabilities equal to or greater than the minimum net worth requirement.
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 Insurance Code §844.005, shall be required, at a minimum, to comply with Insurance Code §843.403 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; amended to be effective March 30, 2000, 25 TexReg 2646; amended to be effective February 24, 2005, 30 TexReg 854; amended to be effective November 15, 2006, 31 TexReg 9298.