Thierry (HB 1057) Act No. 220
Prior law provided relative to risk-based capital for health maintenance organizations, as
defined in existing law.
New law provides relative to risk-based capital for health organizations, defined as the
following: a health maintenance organization, as defined in existing law; a limited health
service organization which bears risk; a dental or vision plan which bears risk; a hospital,
medical and dental indemnity or service corporation which bears risk; a provider-sponsored
organization which bears risk; or any other risk-bearing managed care organization licensed
under existing law, the Insurance Code. Specifies that the term shall not include an
organization that is licensed as either a life, health and accident, or property and casualty
insurer under existing law, the Insurance Code, and that is otherwise subject to either the life
or property and casualty risk-based capital requirements.
Prior law provided that "authorized-control level risk-based capital" meant the product of
1.25 and the number determined under the risk-based capital formula in accordance with the
risk-based capital instructions.
New law provides that "authorized-control level risk-based capital" means the number
determined under the risk-based capital formula in accordance with the risk-based capital
instructions.
Prior law provided that "mandatory-control level risk-based capital" meant the product of
ninety-five hundredths (.95) and the number determined under the risk-based capital formula
in accordance with the risk-based capital instructions.
New law provides that "mandatory-control level risk-based capital" means the product of
seventy hundredths (.70) and the number determined under the risk-based capital formula in
accordance with the risk-based capital instructions.
Existing law provides that one instance of "company-action level event" means the filing of
a risk-based capital report by a health organization that indicates that the health
organization's total adjusted capital is greater than or equal to its regulatory action level risk-
based capital but less than its company-action level risk-based capital.
New law additionally clarifies that a "company-action level event" means if a health
organization has total adjusted capital which is greater than or equal to its company-action
level risk-based capital but less than the product of its authorized-control level risk-based
capital and three, and triggers the trend test determined in accordance with the trend test
calculation included in the health risk-based capital instructions.
Effective Aug. 1, 2014.
(Amends the heading of Subpart D of Part III of Chapter 2 of Title 22 of the La. Revised
Statutes of 1950 and R.S. 22:631(intro. para.), (4), and (6)(c) and (d) and 634(A)(1))