Risk Based Capital Applicability for 2006

BULLETIN 07 -03 DATE: January 11, 2007 TO: President, Managed Care Organizations RE: Risk Based Capital Applicability for 2006 cc: Chief Financial Officers, Managed Care Organizations On July 5, 2001, the Insurance Commissioner adopted Regulation .02-1 under COMAR 31.12.06 Managed Care Organizations-Financial Compliance Requirements, effective August 20, 2001. This regulation required that effective with the Annual Statement filed for the year ending December 31, 2001, an MCO shall comply with the risk-based capital requirements of the Insurance Article, Title 4, Subtitle 3 of the Annotated Code of Maryland, unless exempted by the Insurance Commissioner. MCOs are required to submit a risk-based capital report in conjunction with the Annual Statement filing for the year ending December 31, 2006. This filing is due March 1, 2007. At the request of the Department of Health and Mental Hygiene, the Insurance Commissioner is granting MCOs an exemption from meeting the risk-based capital requirements for the year ending December 31, 2006. In this regard, the Insurance Commissioner will not take action against an MCO based solely on the information contained in the risk-based capital report. Any questions about this bulletin should be directed to the Examination and Auditing Section at (410) 468-2119. R. STEVEN ORR INSURANCE COMMISSIONER By: Signature on file with original document Lester C. Schott Associate Commissioner Examination and Auditing Section R. STEVEN ORR Commissioner JAMES V. MCMAHAN, III Deputy Commissioner LESTER C. SCHOTT Associate Commissioner Examination and Auditing ROBERT L. EHRLICH, JR. Governor MICHAEL S. STEELE Lt. Governor 525 St. Paul Place, Baltimore, Maryland 21202-2272 Direct Dial: 410-468-2119 Fax: 410-468-2101 Email: lschott@mdinsurance.state.md.us 1-800-492-6116 TTY: 1-800-735-2258 www.mdinsurance.state.md.us