The Ohio House of Representatives approved legislation last week that would provide the Ohio Department of Insurance with an additional tool to regulate the financial solvency of Health Insuring Corporations and Health Maintenance Organizations. House Bill 714, sponsored by Representative David R. Evans, R-Newark, passed by an 89-0 vote and will now proceed to Governor Bob Taft for his signature.
H.B. 714 establishes a regulatory approach to monitoring the financial health of HMOs. If an HMO submits a financial statement to the DOI that indicates a company’s total adjusted capital is below a certain level of risk based capital, the bill requires the department to take one of four regulatory actions.
Ohio’s legislation is patterned after the National Association of Insurance Commissioner’s HMO Risk Based Capital Model Act.
Risk Based Capital levels are calculated by using a formula that takes into account factors including asset risk, credit risk, underwriting risk and other business risks. The provisions of House Bill 714 will allow the ODI to take certain, proactive regulatory steps if a health insuring corporation’s total capital falls below a certain level of risk based capital.
Topics Legislation Ohio
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