A. No person shall establish or operate a health maintenance organization in the Commonwealth without obtaining a license from the Commission. Any person, including a foreign corporation, may apply to the Commission for a license to establish and operate a health maintenance organization in compliance with this chapter.
B. Each application for a license shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the Commission, and shall set forth or be accompanied by the following:
1. A copy of any basic organizational document of the applicant including, but not limited to, the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents, and all amendments to those documents;
2. A copy of the bylaws, rules and regulations, or any similar document regulating the conduct of the internal affairs of the applicant;
3. A list of the names, addresses, and official positions, and biographical information on forms acceptable to the Commission of each member of the governing body and any person with authority to manage or establish policy; and a full disclosure in the application of (i) any financial interest between such persons or any provider, organization or corporation owned or controlled by such person and the health maintenance organization and (ii) the extent and nature of the financial arrangements between such persons and the health maintenance organization;
4. A disclosure of any person owning or having the right to acquire five percent or more of the voting securities or subordinated debt of the applicant;
5. A copy of any contract made or to be made between any providers, sponsors, or organizers of the health maintenance organization, or persons listed in subdivision 3 of this subsection and the applicant;
6. A copy of the evidence of coverage form to be issued to subscribers;
7. A copy of any group contract form that is to be issued to employers, unions, trustees, or other organizations. All group contracts shall set forth the right of subscribers to convert their coverages to an individual contract issued by the health maintenance organization;
8. Financial statements showing the applicant’s assets, liabilities, and sources of financial support and, if the applicant’s financial affairs are audited by independent certified public accountants, a copy of the applicant’s most recent certified financial statement unless the Commission directs that additional or more recent financial information is required for the proper administration of this chapter;
9. A complete description of the health maintenance organization and its method of operation, including (i) the method of marketing the plan, (ii) a statement regarding the sources of working capital as well as any other sources of funding, and (iii) a description of any insurance, reinsurance, or alternative coverage arrangements proposed, including excess insurance or stop loss insurance;
10. A description of the mechanism by which enrollees will be given an opportunity to participate in matters of policy and operation as provided in subsection B of § 38.2-4304;
11. A financial feasibility plan which includes, but is not limited to, (i) detailed enrollment projections, (ii) the methodology for determining premium rates to be charged during at least the first three years of operations and extending one year beyond the anticipated break-even point certified by an actuary, and (iii) a projection, along with material assumptions, of balance sheets, cash flow statements showing capital expenditures and purchase and sale of investments, income statements, and statements of anticipated covered and uncovered expenses on a quarterly basis for at least three years and extending one year beyond the anticipated break-even point; and
12. Any other information the Commission may require to make the determinations required pursuant to § 38.2-4302.
C. Notwithstanding any other provision of this title, no license shall be required of a health maintenance organization duly licensed in a state contiguous to the Commonwealth that contracts on a limited basis with health care providers in the Commonwealth for the provision of health care services to enrollees covered under a group contract neither delivered nor issued for delivery in the Commonwealth, provided that:
1. The number of Virginia residents receiving such health care services shall not exceed 500 enrollees of such health maintenance organization; and
2. The contracts with such providers shall contain a hold harmless clause that is not less favorable in any respect to any enrollee that is a Virginia resident than the “hold harmless clause” set forth in subdivision C 9 of § 38.2-5805.