New Jersey § 26:2j-4

§ 26:2j-4.

a. (1) Upon receipt of an application for issuance of a certificate of authority the

commissioner shall forthwith transmit copies of such application and accompanying

documents to the Commissioner of Insurance. The approval of the Commissioner of Insurance shall be required to the extent that

the proposal involves the doing of an insurance business or a contract with an insurer

or hospital or medical service corporation. (2) The commissioner shall determine whether the applicant for a certificate of authority: (a) has demonstrated the potential ability to assure that such health care services

will be provided in a manner to assure both availability and accessibility of adequate

personnel and facilities and in a manner enhancing availability, accessibility and

continuity of service; (b) has arrangements for an on-going quality of health care assurance program; and (c) has a procedure to establish and maintain a uniform system of cost accounting

approved by the commissioner; establish and maintain a uniform system of reports

and audits meeting the requirements of the commissioner; and prepare and review annually

a long range plan for the provision of health care services, which plan shall be compatible

with the State Health Plan established pursuant to the “Comprehensive Health Planning

and Public Health Services Amendments of 1966” (Federal Law 89-749) 1 as related to medical health services, health care services and health manpower. (3) Where the application has been rejected the commissioner shall specify in what

respect it fails to comply and, if applicable, specifies in what respect the proposal

fails to comply with the requirements of the Commissioner of Insurance. b. Issuance of a certificate of authority shall be granted upon payment of the application

fee prescribed in section 23 hereof 2 if the commissioner and, if applicable, the Commissioner of Insurance, are satisfied

that the following conditions are met: (1) the health maintenance organization's proposed plan of operation meets the requirements

of subsection a. (2) of this section; (2) the applicant's proposal sets forth an appropriate mechanism whereby the health

maintenance organization will effectively provide or arrange for the provision of

health care services on a prepaid basis; (3) the health maintenance organization is financially sound and may reasonably be

expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the commissioner may consider: (a) the adequacy of working capital and funding sources; (b) agreements if any, with an insurer, a hospital or medical service corporation,

a government, or any other organization for insuring the payment of the cost of health

care services or the provision for automatic applicability of an alternative coverage

in the event of discontinuance of the plan; (c) any agreement with providers for the provision of health care services; (d) any deposit of cash or form of guaranty or security submitted in accordance with

section 14 hereof 3 to assure that the obligations will be duly performed; and (e) The financial soundness of the health maintenance organization's arrangements

for health care services and the schedule of charges used in connection therewith; (4) the enrollees will be afforded an opportunity to participate in matters of policy

and operation pursuant to section 6 hereof; 4 (5) nothing in the proposed method of operation, as shown by the information submitted

pursuant to section 3 hereof 5 or by independent investigation, is contrary to the public interest; and (6) any deficiencies found by the commissioner or the Commissioner of Insurance have

been corrected. c. A certificate of authority shall be denied only after compliance with the requirements

of section 22 hereof. 6 1

42 U.S.C.A. §§ 242g [transferred and repealed], 243, 246. 2

N.J.S.A. § 26:2J-23. 3

N.J.S.A. § 26:2J-14. 4

N.J.S.A. § 26:2J-6. 5

N.J.S.A. § 26:2J-3. 6

N.J.S.A. § 26:2J-22.