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ACT No. 220
Regular Session, 2014
HOUSE BILL NO. 1057
BY REPRESENTATIVE THIERRY
AN ACT1
To amend and reenact the heading of Subpart D of Part III of Chapter 2 of Title 22 of the2
Louisiana Revised Statutes of 1950, R.S. 22:631(introductory paragraph), (4), and3
(6)(c) and (d) and 634(A)(1), relative to risk-based capital for health organizations;4
to define "health organization"; to amend certain formulas to determine risk-based5
capital; to define a "company-action level event"; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. The heading of Subpart D of Part III of Chapter 2 of Title 22 of the8
Louisiana Revised Statutes of 1950 and R.S. 22:631(introductory paragraph), (4), and (6)(c)9
and (d) and 634(A)(1) are hereby amended and reenacted to read as follows: 10
SUBPART D. RISK-BASED CAPITAL FOR HEALTH 11
MAINTENANCE ORGANIZATIONS12
§631. Definitions13
As used in this Subpart, these terms shall have the following meanings:14
* * *15
(4) "Health organization" means a health maintenance organization licensed16
under Subpart I of Part I of this Chapter., a limited health service organization which17
bears risk, dental or vision plan which bears risk, hospital, medical and dental18
indemnity or service corporation which bears risk, provider-sponsored organization19
which bears risk, or other risk-bearing managed care organization licensed under this20
Title. "Health organization" shall not include an organization that is licensed as21
either a life, health and accident, or property and casualty insurer under this Title and22
that is otherwise subject to either the life or property and casualty risk-based capital23
requirements.24
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(6) "Risk-based capital level" means a health organization's company-action1
level risk-based capital, regulatory-action level risk-based capital, authorized-control2
level risk-based capital, or mandatory-control level risk-based capital where:3
* * *4
(c) "Authorized-control level risk-based capital" means the product of one5
and one quarter and the number determined under the risk-based capital formula in6
accordance with the risk-based capital instructions.7
(d) "Mandatory-control level risk-based capital" means the product of8
ninety-five seventy hundredths and the number determined under the risk-based9
capital formula in accordance with the risk-based capital instructions.10
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§634. Company-action level event12
A. A "company-action level event" means any of the following:13
(1) The filing of a risk-based capital report by a health organization that14
indicates that the health organization's total adjusted capital is greater than or equal15
to its regulatory action level risk-based capital but less than its company-action level16
risk-based capital. If a health organization has total adjusted capital which is greater17
than or equal to its company-action level risk-based capital but less than the product18
of its authorized-control level risk-based capital and three, and triggers the trend test19
determined in accordance with the trend test calculation included in the health20
risk-based capital instructions.21
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SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: