New Hampshire § 420-O-5 - Section 420-O:5 Reserves.

§ 420-O-5. Section 420-O:5 Reserves.

I. An institution shall establish reserves with the amounts necessary to satisfy all contractual obligations and liabilities of the plan, including: (a) Funds for the payment of claims and expenses thereon reported but not yet paid, and claims and expenses thereon incurred but not yet reported, which shall not be less than an amount equal to 25 percent of expected incurred claims and expenses thereon for the current plan year, unless a qualified actuary has demonstrated to the commissioner's satisfaction that a lesser amount shall be adequate. (b) Funds for unearned premium equivalents, computed pro-rata on the basis of the unexpired portion of the policy period. (c) Contingency funds, established and maintained for the sole purpose of satisfying unexpected obligations of the plan in the event of termination of the plan. II. The reserve statement shall be prepared by a qualified actuary. If at any time the reserve funds required to be established pursuant to this section fall below the required minimum amounts, then the institution shall immediately notify the commissioner of such impairment. The institution shall cure the impairment within 5 business days. III. The plan's assets, liabilities, income, and expenses shall be accounted for separate and apart from all other assets, liabilities, income, and expenses of the institution. IV. The requirements for funding of the plan's reserves shall be calculated using generally accepted accounting principles. Only those expenses that relate to the plan shall be included in calculating the requirements for funding of the plan's reserve funds. Expenses allocated to the plan shall be allocated on an equitable basis in conformity with generally accepted accounting principles consistently applied. The books, accounts, and records of the plan shall be maintained to clearly and accurately disclose the nature and details of all expenses to support the reasonableness of such expenses.