Or. Admin. Code § 410-141-5170

Current through Register Vol. 64, No. 1, January 1, 2025

Section 410-141-5170 - CAPITALIZATION: Capital and Surplus

(1) CCO shall possess and thereafter maintain capital or surplus or any combination thereof equal to no less than $2.5 million.

(2) Notwithstanding a CCO's compliance with subsection (1) a CCO shall at all times also comply with the risk-based capital standards set forth at OAR 410-141-5295 to 5320.

(3) For the protection of the public, the Authority may require a CCO to possess and maintain capital or surplus, or any combination thereof, in excess of the amounts otherwise required under this section, owing to the type, volume and nature of business transacted by the CCO, if the Authority determines under OAR 410-141-5175 that the greater amount is necessary for maintaining the CCO's solvency in accordance with OAR 410-141-5195 et seq For the purpose of determining the reasonableness and adequacy of a CCO's capital and surplus, the Authority may consider the net effect of factors bearing on the financial condition of the CCO including but not limited to:

(a) The size of the CCO, as measured by its assets, capital and surplus, reserves, capitated revenue and other appropriate criteria.

(b) The number of Members covered by the CCO.

(c) The extent of the geographical dispersion of the Members covered by the CCO.

(d) The nature and extent of the reinsurance program of the CCO.

(e) The quality, diversification and liquidity of the investment portfolio of the CCO.

(f) The recent past and projected future trend in the size of the investment portfolio of the CCO.

(g) The combined capital and surplus maintained by comparable CCOs.

(h) The adequacy of the reserves of the CCO.

(i) The quality and liquidity of investments in affiliates. The Authority may treat any such investment as a disallowed asset for purposes of determining the adequacy of combined capital and surplus whenever in the judgment of the Authority the investment so warrants.

(j) The quality of the earnings of the CCO and the extent to which the reported earnings include extraordinary items.

(4) In comparing the capital and surplus maintained by other CCOs, the Authority shall consider the extent to which each of such factors varies from CCO to CCO. In determining the quality and liquidity of investments in subsidiaries, the Authority shall consider the individual subsidiary and may discount or disallow its valuation to the extent that the individual investments so warrant.

Or. Admin. Code § 410-141-5170

DMAP 59-2019, adopt filed 12/18/2019, effective 1/1/2020; DMAP 143-2024, amend filed 12/29/2024, effective 1/1/2025

Statutory/Other Authority: ORS 413.042, 414.572, 414.591 & 414.605

Statutes/Other Implemented: ORS 414.570-414.686 & 415.001-415.430