New Jersey § 26:2j-18

§ 26:2j-18.

The commissioner may increase the amount of capital or surplus required of a health

maintenance organization, or subsequently revise or redetermine that increase, using

appropriate methods and procedures established by rules and regulations adopted by

the commissioner, in order to provide adequate protection against risks affecting

the health maintenance organization's financial condition that are not adequately

or fully covered by its reserves or other assets, but under no circumstances shall

a health maintenance organization's capital or surplus be less than the capital or

surplus required pursuant to regulation as prescribed by the commissioner; provided,

however, that any increase required by a subsequent revision or redetermination pursuant

to this section, shall be made only after a formal departmental hearing, on the record,

unless that hearing is waived by the affected health maintenance organization. All matters pertaining to a hearing or to an increase in capital or surplus pursuant

to this section shall be confidential and not subject to subpoena or public inspection,

except to the extent that the commissioner finds release of that information necessary

to protect the public. The hearing shall be initiated within 20 days after written notice to the health

maintenance organization. Any declaration regarding an increase required by a subsequent revision or redetermination

shall contain findings specifying the factors deemed significant in regard to the

particular health maintenance organization, and shall set forth the reasons supporting

the increase of capital or surplus ordered by the commissioner. In determining any increase, revision or redetermination in the amount of capital

or surplus, the commissioner shall consider the risks of: a. Increases or decreases in the frequency and severity of losses under normal operating

conditions, as well as increases or decreases in those values, above or below the

levels contemplated by the rates that it charged for coverage and above or below those

reasonably expected under normal conditions; b. Increases or decreases in expenses under normal operating conditions, as well as

increases or decreases in those values, above or below the levels contemplated by

the rates it charged for coverage and above or below those reasonably expected under

normal conditions; c. Increases or decreases in the value of, or return on, invested assets under normal

operating conditions, as well as increases or decreases in those values, above or

below those levels anticipated under normal conditions; d. Changes in economic, social and market conditions that could adversely or favorably

affect the financial condition of the health maintenance organization, including conditions

that would make liquidity more or less important than contemplated and would prevent

or facilitate timely investments or force or prohibit untimely sales of assets; and e. Any other contingencies, including reinsurance and unfunded or extra contractual

obligations, which may affect the health maintenance organization's financial condition.