{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-4302.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-4302.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-4302.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-4302.html"}],"law_id":64417,"edition_id":1,"section_id":64417,"structure_id":12833,"section_number":"38.2-4302","catch_line":"Issuance of license; fee; minimum net worth; impairment","history":"1980, c. 720, \u00a7 38.1-865; 1981, c. 317; 1986, c. 562; 1992, c. 481; 1998, cc. 42, 891; 2000, c. 503; 2003, cc. 752, 767; 2004, c. 175; 2018, c. 706.","full_text":"A\n\nThe Commission shall issue a license to a health maintenance organization after the receipt of a complete application and payment of a $500 nonrefundable application fee if the Commission is satisfied that the following conditions are met:1\n\nThe persons responsible for the conduct of the affairs of the applicant are competent, trustworthy, and reputable;2\n\nThe health care plan constitutes an appropriate mechanism for the health maintenance organization to provide or arrange for the provision of, as a minimum, basic health care services or limited health care services on a prepaid basis, except to the extent of reasonable requirements for copayments, deductibles, or both;3\n\nThe health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the Commission may consider:\n\t\t\t\ta. The financial soundness of the health care plan’s arrangements for health care services and the schedule of prepaid charges used for those services;\n\t\t\t\tb. The adequacy of working capital;\n\t\t\t\tc. Any agreement with an insurer, a health services plan, 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 if the health care plan is discontinued;\n\t\t\t\td. Any contracts with health care providers that set forth the health care services to be performed and the providers’ responsibilities for fulfilling the health maintenance organization’s obligations to its enrollees;\n\t\t\t\te. The deposit of acceptable securities in an amount satisfactory to the Commission, submitted in accordance with § 38.2-4310 as a guarantee that the obligations to the enrollees will be duly performed;\n\t\t\t\tf. The applicant’s net worth which shall include minimum net worth in an amount at least equal to the sum of uncovered expenses, but not less than $600,000, up to a maximum of $4 million; uncovered expenses shall be amounts determined from the most recently ended calendar quarter pursuant to regulations promulgated by the Commission; and\n\t\t\t\tg. A financial statement of the health maintenance organization on the form required by § 38.2-4307;4\n\nThe enrollees will be given an opportunity to participate in matters of policy and operation as required by § 38.2-4304; and5\n\nNothing in the method of operation is contrary to the public interest, as shown in the information submitted pursuant to § 38.2-4301 or Chapter 58 (§ 38.2-5800 et seq.) or by independent investigation. Issuance of a license shall not constitute approval of the forms submitted under subdivisions B 6, 7, and 12 of § 38.2-4301.B\n\nA licensed health maintenance organization shall have and maintain at all times the minimum net worth described in subdivision A 3 f.1\n\nIf the Commission finds that the minimum net worth of a domestic health maintenance organization is impaired, the Commission shall issue an order requiring the health maintenance organization to eliminate the impairment within a period not exceeding 90 days. The Commission may by order served upon the health maintenance organization prohibit the health maintenance organization from issuing any new contracts while the impairment exists. If at the expiration of the designated period the health maintenance organization has not satisfied the Commission that the impairment has been eliminated, an order for the rehabilitation or liquidation of the health maintenance organization may be entered.2\n\nIf the Commission finds an impairment of the minimum net worth of any foreign health maintenance organization, the Commission may order the health maintenance organization to eliminate the impairment and restore the minimum net worth to the amount required by this section. The Commission may, by order served upon the health maintenance organization, prohibit the health maintenance organization from issuing any new contracts while the impairment exists. If the health maintenance organization fails to comply with the Commission’s order within a period of not more than 90 days, the Commission may, in the manner set out in § 38.2-4316, suspend or revoke the license of the health maintenance organization.3\n\nPrior to December 31, 1999, a health maintenance organization with less than minimum net worth which is licensed on and after June 30, 1998, may continue to operate as a licensed health maintenance organization without a finding of impairment if the licensee has net worth (i) on June 30, 1998, and up to December 31, 1998, in an amount at least equal to the sum of uncovered expenses, but not less than $300,000, up to a maximum of $2 million; (ii) on December 31, 1998, and up to June 30, 1999, in an amount at least equal to the sum of uncovered expenses, but not less than $400,000, up to a maximum of $2.5 million; and (iii) on June 30, 1999, and up to December 31, 1999, in an amount at least equal to the sum of uncovered expenses, but not less than $500,000, up to a maximum of $3 million.","order_by":null,"text":{"0":{"id":234400,"text":"The Commission shall issue a license to a health maintenance organization after the receipt of a complete application and payment of a $500 nonrefundable application fee if the Commission is satisfied that the following conditions are met:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":234401,"text":"The persons responsible for the conduct of the affairs of the applicant are competent, trustworthy, and reputable;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":234402,"text":"The health care plan constitutes an appropriate mechanism for the health maintenance organization to provide or arrange for the provision of, as a minimum, basic health care services or limited health care services on a prepaid basis, except to the extent of reasonable requirements for copayments, deductibles, or both;","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":234403,"text":"The health maintenance organization is financially responsible and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the Commission may consider:\n\t\t\t\ta. The financial soundness of the health care plan’s arrangements for health care services and the schedule of prepaid charges used for those services;\n\t\t\t\tb. The adequacy of working capital;\n\t\t\t\tc. Any agreement with an insurer, a health services plan, 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 if the health care plan is discontinued;\n\t\t\t\td. Any contracts with health care providers that set forth the health care services to be performed and the providers’ responsibilities for fulfilling the health maintenance organization’s obligations to its enrollees;\n\t\t\t\te. The deposit of acceptable securities in an amount satisfactory to the Commission, submitted in accordance with § 38.2-4310 as a guarantee that the obligations to the enrollees will be duly performed;\n\t\t\t\tf. The applicant’s net worth which shall include minimum net worth in an amount at least equal to the sum of uncovered expenses, but not less than $600,000, up to a maximum of $4 million; uncovered expenses shall be amounts determined from the most recently ended calendar quarter pursuant to regulations promulgated by the Commission; and\n\t\t\t\tg. A financial statement of the health maintenance organization on the form required by § 38.2-4307;","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"4":{"id":234404,"text":"The enrollees will be given an opportunity to participate in matters of policy and operation as required by § 38.2-4304; and","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"A5"},"5":{"id":234405,"text":"Nothing in the method of operation is contrary to the public interest, as shown in the information submitted pursuant to § 38.2-4301 or Chapter 58 (§ 38.2-5800 et seq.) or by independent investigation. Issuance of a license shall not constitute approval of the forms submitted under subdivisions B 6, 7, and 12 of § 38.2-4301.","type":"section","prefixes":["A","5"],"prefix":"5","entire_prefix":"A5","prefix_anchor":"A5","level":2,"prior_prefix":"A4","next_prefix":"B"},"6":{"id":234406,"text":"A licensed health maintenance organization shall have and maintain at all times the minimum net worth described in subdivision A 3 f.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A5","next_prefix":"B1"},"7":{"id":234407,"text":"If the Commission finds that the minimum net worth of a domestic health maintenance organization is impaired, the Commission shall issue an order requiring the health maintenance organization to eliminate the impairment within a period not exceeding 90 days. The Commission may by order served upon the health maintenance organization prohibit the health maintenance organization from issuing any new contracts while the impairment exists. If at the expiration of the designated period the health maintenance organization has not satisfied the Commission that the impairment has been eliminated, an order for the rehabilitation or liquidation of the health maintenance organization may be entered.","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"8":{"id":234408,"text":"If the Commission finds an impairment of the minimum net worth of any foreign health maintenance organization, the Commission may order the health maintenance organization to eliminate the impairment and restore the minimum net worth to the amount required by this section. The Commission may, by order served upon the health maintenance organization, prohibit the health maintenance organization from issuing any new contracts while the impairment exists. If the health maintenance organization fails to comply with the Commission’s order within a period of not more than 90 days, the Commission may, in the manner set out in § 38.2-4316, suspend or revoke the license of the health maintenance organization.","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"B3"},"9":{"id":234409,"text":"Prior to December 31, 1999, a health maintenance organization with less than minimum net worth which is licensed on and after June 30, 1998, may continue to operate as a licensed health maintenance organization without a finding of impairment if the licensee has net worth (i) on June 30, 1998, and up to December 31, 1998, in an amount at least equal to the sum of uncovered expenses, but not less than $300,000, up to a maximum of $2 million; (ii) on December 31, 1998, and up to June 30, 1999, in an amount at least equal to the sum of uncovered expenses, but not less than $400,000, up to a maximum of $2.5 million; and (iii) on June 30, 1999, and up to December 31, 1999, in an amount at least equal to the sum of uncovered expenses, but not less than $500,000, up to a maximum of $3 million.","type":"section","prefixes":["B","3"],"prefix":"3","entire_prefix":"B3","prefix_anchor":"B3","level":2,"prior_prefix":"B2"}},"ancestry":[{"id":12833,"edition_id":1,"name":"Health Maintenance Organizations","identifier":"43","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:43:55","date_modified":"2026-06-26 03:43:55","permalink":{"id":216835,"object_type":"structure","relational_id":12833,"identifier":"43","token":"38.2\/43","url":"\/38.2\/43\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12698,"edition_id":1,"name":"Insurance","identifier":"38.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":210661,"object_type":"structure","relational_id":12698,"identifier":"38.2","token":"38.2","url":"\/38.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":72005,"structure_id":12833,"section_number":"38.2-4300","catch_line":"Definitions","url":"\/38.2-4300\/","token":"38.2\/43\/38.2-4300","metadata":false},{"id":80882,"structure_id":12833,"section_number":"38.2-4301","catch_line":"Establishment of health maintenance organizations","url":"\/38.2-4301\/","token":"38.2\/43\/38.2-4301","metadata":false},{"id":64417,"structure_id":12833,"section_number":"38.2-4302","catch_line":"Issuance of license; fee; minimum net worth; impairment","url":"\/38.2-4302\/","token":"38.2\/43\/38.2-4302","metadata":false},{"id":73205,"structure_id":12833,"section_number":"38.2-4303","catch_line":"Powers","url":"\/38.2-4303\/","token":"38.2\/43\/38.2-4303","metadata":false},{"id":68216,"structure_id":12833,"section_number":"38.2-4304","catch_line":"Governing body","url":"\/38.2-4304\/","token":"38.2\/43\/38.2-4304","metadata":false},{"id":54130,"structure_id":12833,"section_number":"38.2-4305","catch_line":"Fiduciary responsibilities","url":"\/38.2-4305\/","token":"38.2\/43\/38.2-4305","metadata":false},{"id":81322,"structure_id":12833,"section_number":"38.2-4306","catch_line":"Evidence of coverage and charges for health care services","url":"\/38.2-4306\/","token":"38.2\/43\/38.2-4306","metadata":false},{"id":73640,"structure_id":12833,"section_number":"38.2-4306.1","catch_line":"Interest on claim proceeds","url":"\/38.2-4306.1\/","token":"38.2\/43\/38.2-4306.1","metadata":false},{"id":65829,"structure_id":12833,"section_number":"38.2-4307","catch_line":"Annual statement","url":"\/38.2-4307\/","token":"38.2\/43\/38.2-4307","metadata":false},{"id":85130,"structure_id":12833,"section_number":"38.2-4307.1","catch_line":"Additional reports","url":"\/38.2-4307.1\/","token":"38.2\/43\/38.2-4307.1","metadata":false},{"id":77610,"structure_id":12833,"section_number":"38.2-4308","catch_line":"Repealed","url":"\/38.2-4308\/","token":"38.2\/43\/38.2-4308","metadata":false},{"id":80159,"structure_id":12833,"section_number":"38.2-4309","catch_line":"Investments","url":"\/38.2-4309\/","token":"38.2\/43\/38.2-4309","metadata":false},{"id":84555,"structure_id":12833,"section_number":"38.2-4310","catch_line":"Protection against insolvency","url":"\/38.2-4310\/","token":"38.2\/43\/38.2-4310","metadata":false},{"id":59833,"structure_id":12833,"section_number":"38.2-4310.1","catch_line":"Deposits","url":"\/38.2-4310.1\/","token":"38.2\/43\/38.2-4310.1","metadata":false},{"id":53983,"structure_id":12833,"section_number":"38.2-4311","catch_line":"Repealed","url":"\/38.2-4311\/","token":"38.2\/43\/38.2-4311","metadata":false},{"id":62703,"structure_id":12833,"section_number":"38.2-4312","catch_line":"Prohibited practices","url":"\/38.2-4312\/","token":"38.2\/43\/38.2-4312","metadata":false},{"id":82617,"structure_id":12833,"section_number":"38.2-4312.1","catch_line":"Pharmacies; freedom of choice","url":"\/38.2-4312.1\/","token":"38.2\/43\/38.2-4312.1","metadata":false},{"id":71246,"structure_id":12833,"section_number":"38.2-4312.2","catch_line":"Repealed","url":"\/38.2-4312.2\/","token":"38.2\/43\/38.2-4312.2","metadata":false},{"id":79585,"structure_id":12833,"section_number":"38.2-4312.3","catch_line":"Patient access to emergency services","url":"\/38.2-4312.3\/","token":"38.2\/43\/38.2-4312.3","metadata":false},{"id":70762,"structure_id":12833,"section_number":"38.2-4313","catch_line":"Licensing of agents","url":"\/38.2-4313\/","token":"38.2\/43\/38.2-4313","metadata":false},{"id":73994,"structure_id":12833,"section_number":"38.2-4314","catch_line":"Powers of insurers and health services plans","url":"\/38.2-4314\/","token":"38.2\/43\/38.2-4314","metadata":false},{"id":60856,"structure_id":12833,"section_number":"38.2-4315","catch_line":"Examinations","url":"\/38.2-4315\/","token":"38.2\/43\/38.2-4315","metadata":false},{"id":61029,"structure_id":12833,"section_number":"38.2-4316","catch_line":"Suspension or revocation of license","url":"\/38.2-4316\/","token":"38.2\/43\/38.2-4316","metadata":false},{"id":82370,"structure_id":12833,"section_number":"38.2-4317","catch_line":"Repealed","url":"\/38.2-4317\/","token":"38.2\/43\/38.2-4317","metadata":false},{"id":84618,"structure_id":12833,"section_number":"38.2-4318","catch_line":"License renewals","url":"\/38.2-4318\/","token":"38.2\/43\/38.2-4318","metadata":false},{"id":67952,"structure_id":12833,"section_number":"38.2-4319","catch_line":"Statutory construction and relationship to other laws","url":"\/38.2-4319\/","token":"38.2\/43\/38.2-4319","metadata":false},{"id":74856,"structure_id":12833,"section_number":"38.2-4320","catch_line":"Authority of Commonwealth to contract with health maintenance organizations","url":"\/38.2-4320\/","token":"38.2\/43\/38.2-4320","metadata":false},{"id":74357,"structure_id":12833,"section_number":"38.2-4320.1","catch_line":"Explanation of benefits for health maintenance organization enrollees who are recipients of medical assistance services or covered by the Family Access to Medical Insurance Security (FAMIS) Plan","url":"\/38.2-4320.1\/","token":"38.2\/43\/38.2-4320.1","metadata":false},{"id":74331,"structure_id":12833,"section_number":"38.2-4321","catch_line":"Health maintenance organization affected by chapter","url":"\/38.2-4321\/","token":"38.2\/43\/38.2-4321","metadata":false},{"id":63129,"structure_id":12833,"section_number":"38.2-4322","catch_line":"Affiliation period","url":"\/38.2-4322\/","token":"38.2\/43\/38.2-4322","metadata":false},{"id":67176,"structure_id":12833,"section_number":"38.2-4323","catch_line":"Alternative methods","url":"\/38.2-4323\/","token":"38.2\/43\/38.2-4323","metadata":false}],"previous_section":{"id":80882,"structure_id":12833,"section_number":"38.2-4301","catch_line":"Establishment of health maintenance organizations","url":"\/38.2-4301\/","token":"38.2\/43\/38.2-4301","metadata":false},"next_section":{"id":73205,"structure_id":12833,"section_number":"38.2-4303","catch_line":"Powers","url":"\/38.2-4303\/","token":"38.2\/43\/38.2-4303","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-4302\/","history_text":"

This law was first created in 1980. The record of its establishment is cataloged in chapter 720 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1980 \u201cActs\u201d aren\u2019t available online. It has been modified 8 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1981, chapter 317; in 1986, chapter 562; in 1992, chapter 481; in 1998, chapters 42<\/a> and 891<\/a>; in 2000, chapter 503<\/a>; in 2003, chapters 752<\/a> and 767<\/a>; in 2004, chapter 175<\/a>; in 2018, chapter 706<\/a>.<\/p>","references":[{"id":64894,"section_number":"38.2-5801","catch_line":"General provisions","order_by":null,"url":"\/38.2-5801\/"}],"refers_to":[{"id":80882,"section_number":"38.2-4301","catch_line":"Establishment of health maintenance organizations","order_by":null,"url":"\/38.2-4301\/"},{"id":68216,"section_number":"38.2-4304","catch_line":"Governing body","order_by":null,"url":"\/38.2-4304\/"},{"id":65829,"section_number":"38.2-4307","catch_line":"Annual statement","order_by":null,"url":"\/38.2-4307\/"},{"id":84555,"section_number":"38.2-4310","catch_line":"Protection against insolvency","order_by":null,"url":"\/38.2-4310\/"},{"id":61029,"section_number":"38.2-4316","catch_line":"Suspension or revocation of license","order_by":null,"url":"\/38.2-4316\/"},{"id":77304,"section_number":"38.2-5800","catch_line":"Definitions","order_by":null,"url":"\/38.2-5800\/"}],"permalink":{"id":216845,"object_type":"law","relational_id":64417,"identifier":"38.2-4302","token":"38.2\/43\/38.2-4302","url":"\/38.2-4302\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-4302\/","token":"38.2\/43\/38.2-4302","dublin_core":{"Title":"Issuance of license; fee; minimum net worth; impairment","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-4302","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> The Commission<\/span> shall issue<\/span> a license to a health maintenance organization<\/span> after the receipt of a complete application and payment of a $500 nonrefundable application fee if the Commission<\/span> is satisfied that the following conditions are met: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The persons<\/span> responsible for the conduct of the affairs of the applicant are competent, trustworthy, and reputable; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The health care plan<\/span> constitutes an appropriate mechanism for the health maintenance organization<\/span> to provide or arrange for the provision of, as a minimum, basic health care services<\/span><\/span> or limited health care services<\/span><\/span> on a prepaid basis, except to the extent of reasonable requirements for copayments<\/span>, deductibles<\/span>, or both; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The health maintenance organization<\/span> is financially responsible and may reasonably be expected to meet its obligations to enrollees<\/span> and prospective enrollees<\/span>. In making this determination, the Commission<\/span> may consider:\n\t\t\t\ta. The financial soundness of the health care plan<\/span>’s arrangements for health care services<\/span> and the schedule of prepaid charges used for those services;\n\t\t\t\tb. The adequacy of working capital;\n\t\t\t\tc. Any agreement with an insurer<\/span>, a health services plan<\/span>, a government, or any other organization for insuring the payment of the cost of health care services<\/span> or the provision for automatic applicability of an alternative coverage if the health care plan<\/span> is discontinued;\n\t\t\t\td. Any contracts<\/span> with health care providers<\/span> that set forth the health care services<\/span> to be performed and the providers’ responsibilities for fulfilling the health maintenance organization<\/span>’s obligations to its enrollees<\/span>;\n\t\t\t\te. The deposit of acceptable securities<\/span> in an amount satisfactory to the Commission<\/span>, submitted in accordance with § 38.2-4310<\/a> as a guarantee that the obligations to the enrollees<\/span> will be duly performed;\n\t\t\t\tf. The applicant’s net worth<\/span> which shall include minimum net worth<\/span> in an amount at least equal to the sum of uncovered expenses, but not less than $600,000, up to a maximum of $4 million; uncovered expenses shall be amounts determined from the most recently ended calendar quarter pursuant to regulations promulgated by the Commission<\/span>; and\n\t\t\t\tg. A financial statement of the health maintenance organization<\/span> on the form required by § 38.2-4307<\/a>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> The enrollees<\/span> will be given an opportunity to participate in matters of policy and operation as required by § 38.2-4304<\/a>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Nothing in the method of operation is contrary to the public interest, as shown in the information submitted pursuant to § 38.2-4301<\/a> or Chapter 58 (§ 38.2-5800<\/a> et seq.) or by independent investigation. Issuance of a license shall not constitute approval of the forms submitted under subdivisions B 6, 7, and 12 of § 38.2-4301<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> A licensed health maintenance organization<\/span> shall have and maintain at all times the minimum net worth<\/span> described in subdivision A 3 f. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> If the Commission<\/span> finds that the minimum net worth<\/span> of a domestic health maintenance organization<\/span> is impaired, the Commission<\/span> shall issue<\/span> an order<\/span> requiring the health maintenance organization<\/span> to eliminate the impairment within a period not exceeding 90 days. The Commission<\/span> may by order<\/span> served upon the health maintenance organization<\/span> prohibit the health maintenance organization<\/span> from issuing any new contracts<\/span> while the impairment exists. If at the expiration of the designated period the health maintenance organization<\/span> has not satisfied the Commission<\/span> that the impairment has been eliminated, an order<\/span> for the rehabilitation or liquidation<\/span> of the health maintenance organization<\/span> may be entered. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> If the Commission<\/span> finds an impairment of the minimum net worth<\/span> of any foreign health maintenance organization<\/span>, the Commission<\/span> may order<\/span> the health maintenance organization<\/span> to eliminate the impairment and restore the minimum net worth<\/span> to the amount required by this section. The Commission<\/span> may, by order<\/span> served upon the health maintenance organization<\/span>, prohibit the health maintenance organization<\/span> from issuing any new contracts<\/span> while the impairment exists. If the health maintenance organization<\/span> fails to comply with the Commission<\/span>’s order<\/span> within a period of not more than 90 days, the Commission<\/span> may, in the manner set out in § 38.2-4316<\/a>, suspend or revoke the license of the health maintenance organization<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Prior to December 31, 1999, a health maintenance organization<\/span> with less than minimum net worth<\/span> which is licensed on and after June 30, 1998, may continue to operate as a licensed health maintenance organization<\/span> without a finding<\/span> of impairment if the licensee has net worth<\/span> (i) on June 30, 1998, and up to December 31, 1998, in an amount at least equal to the sum of uncovered expenses, but not less than $300,000, up to a maximum of $2 million; (ii) on December 31, 1998, and up to June 30, 1999, in an amount at least equal to the sum of uncovered expenses, but not less than $400,000, up to a maximum of $2.5 million; and (iii) on June 30, 1999, and up to December 31, 1999, in an amount at least equal to the sum of uncovered expenses, but not less than $500,000, up to a maximum of $3 million. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nISSUANCE OF LICENSE; FEE; MINIMUM NET WORTH; IMPAIRMENT (\u00a7 38.2-4302)\n\nA. The Commission shall issue a license to a health maintenance organization\nafter the receipt of a complete application and payment of a $500 nonrefundable\napplication fee if the Commission is satisfied that the following conditions are\nmet:\n\n 1. The persons responsible for the conduct of the affairs of the applicant are\n competent, trustworthy, and reputable;\n\n 2. The health care plan constitutes an appropriate mechanism for the health\n maintenance organization to provide or arrange for the provision of, as a\n minimum, basic health care services or limited health care services on a\n prepaid basis, except to the extent of reasonable requirements for copayments,\n deductibles, or both;\n\n 3. The health maintenance organization is financially responsible and may\n reasonably be expected to meet its obligations to enrollees and prospective\n enrollees. In making this determination, the Commission may consider:\n \t\t\t\ta. The financial soundness of the health care plan’s arrangements\n for health care services and the schedule of prepaid charges used for those\n services;\n \t\t\t\tb. The adequacy of working capital;\n \t\t\t\tc. Any agreement with an insurer, a health services plan, a government, or\n any other organization for insuring the payment of the cost of health care\n services or the provision for automatic applicability of an alternative\n coverage if the health care plan is discontinued;\n \t\t\t\td. Any contracts with health care providers that set forth the health care\n services to be performed and the providers’ responsibilities for\n fulfilling the health maintenance organization’s obligations to its\n enrollees;\n \t\t\t\te. The deposit of acceptable securities in an amount satisfactory to the\n Commission, submitted in accordance with § 38.2-4310 as a guarantee that\n the obligations to the enrollees will be duly performed;\n \t\t\t\tf. The applicant’s net worth which shall include minimum net worth\n in an amount at least equal to the sum of uncovered expenses, but not less\n than $600,000, up to a maximum of $4 million; uncovered expenses shall be\n amounts determined from the most recently ended calendar quarter pursuant to\n regulations promulgated by the Commission; and\n \t\t\t\tg. A financial statement of the health maintenance organization on the\n form required by § 38.2-4307;\n\n 4. The enrollees will be given an opportunity to participate in matters of\n policy and operation as required by § 38.2-4304; and\n\n 5. Nothing in the method of operation is contrary to the public interest, as\n shown in the information submitted pursuant to § 38.2-4301 or Chapter 58\n (§ 38.2-5800 et seq.) or by independent investigation. Issuance of a\n license shall not constitute approval of the forms submitted under\n subdivisions B 6, 7, and 12 of § 38.2-4301.\n\nB. A licensed health maintenance organization shall have and maintain at all\ntimes the minimum net worth described in subdivision A 3 f.\n\n 1. If the Commission finds that the minimum net worth of a domestic health\n maintenance organization is impaired, the Commission shall issue an order\n requiring the health maintenance organization to eliminate the impairment\n within a period not exceeding 90 days. The Commission may by order served upon\n the health maintenance organization prohibit the health maintenance\n organization from issuing any new contracts while the impairment exists. If at\n the expiration of the designated period the health maintenance organization\n has not satisfied the Commission that the impairment has been eliminated, an\n order for the rehabilitation or liquidation of the health maintenance\n organization may be entered.\n\n 2. If the Commission finds an impairment of the minimum net worth of any\n foreign health maintenance organization, the Commission may order the health\n maintenance organization to eliminate the impairment and restore the minimum\n net worth to the amount required by this section. The Commission may, by order\n served upon the health maintenance organization, prohibit the health\n maintenance organization from issuing any new contracts while the impairment\n exists. If the health maintenance organization fails to comply with the\n Commission’s order within a period of not more than 90 days, the\n Commission may, in the manner set out in § 38.2-4316, suspend or revoke\n the license of the health maintenance organization.\n\n 3. Prior to December 31, 1999, a health maintenance organization with less\n than minimum net worth which is licensed on and after June 30, 1998, may\n continue to operate as a licensed health maintenance organization without a\n finding of impairment if the licensee has net worth (i) on June 30, 1998, and\n up to December 31, 1998, in an amount at least equal to the sum of uncovered\n expenses, but not less than $300,000, up to a maximum of $2 million; (ii) on\n December 31, 1998, and up to June 30, 1999, in an amount at least equal to the\n sum of uncovered expenses, but not less than $400,000, up to a maximum of $2.5\n million; and (iii) on June 30, 1999, and up to December 31, 1999, in an amount\n at least equal to the sum of uncovered expenses, but not less than $500,000,\n up to a maximum of $3 million.\n\nHISTORY: 1980, c. 720, \u00a7 38.1-865; 1981, c. 317; 1986, c. 562; 1992, c. 481;\n1998, cc. 42, 891; 2000, c. 503; 2003, cc. 752, 767; 2004, c. 175; 2018, c. 706.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}