A. “Authorized Control Level Event” means any of the following events:

1. The filing of an RBC report by the health maintenance organization that indicates that the health maintenance organization’s total adjusted capital is greater than or equal to its Mandatory Control Level RBC, but less than its Authorized Control Level RBC;

2. The notification by the Commissioner to the health maintenance organization of an adjusted RBC report that indicates an Authorized Control Level Event as specified in paragraph 1 of this subsection, provided the health maintenance organization does not challenge the adjusted RBC report under Section 44 of this act;

3. If, pursuant to the provisions of Section 44 of this act, the health maintenance organization challenges an adjusted RBC report that indicates the event in paragraph 1 of this subsection, notification by the Commissioner to the health maintenance organization that the commissioner has, after a hearing, rejected the health maintenance organization’s challenge;

4. The failure of the health maintenance organization to respond, in a manner satisfactory to the Commissioner, to a corrective order, provided the health maintenance organization has not challenged the corrective order under Section 44 of this act; or

5. If the health maintenance organization has challenged a corrective order under Section 44 of this act and the Commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the health maintenance organization to respond, in a manner satisfactory to the Commissioner, to the corrective order subsequent to rejection or modification by the Commissioner.

B. In the event of an Authorized Control Level Event with respect to a health maintenance organization, the Commissioner shall:

1. Take such actions as are required under Section 41 of this act regarding a health maintenance organization with respect to which a Regulatory Action Level Event has occurred; or

2. If the Commissioner deems it to be in the best interests of the policyholders and creditors of the health maintenance organization and of the public, take such actions as are necessary to cause the health maintenance organization to be placed under regulatory control pursuant to the provisions of Articles 18 and 19 of the Insurance Code. In the event the Commissioner takes such actions, the Authorized Control Level Event shall be deemed sufficient grounds for the Commissioner to take action pursuant to the provisions of Articles 18 and 19 of the Insurance Code, and the Commissioner shall have the rights, powers and duties with respect to the health maintenance organization as provided in Articles 18 and 19 of the Insurance Code.

Added by Laws 2003, c. 197, § 42, eff. Nov. 1, 2003.