Ins 57.40 Care management organizations to file financial statements. Ins 57.41 Exemptions and effective dates. Ins 57.01Ins 57.01 Definitions. In addition to the definitions in s. 648.01, Stats., in this chapter: Ins 57.01(1)(1) “Affiliate” of, or person “affiliated” with, a specific person means a person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. Ins 57.01(3)(3) “Commissioner” means the commissioner of insurance of this state or the commissioner’s designee. Ins 57.01(4)(4) “Department” means the department of health services of this state. Ins 57.01(5)(5) “Independent certified public accountant” means an independent certified public accountant, or independent accounting firm, in good standing with the American Institute of Certified Public Accountants in this state, and in the states in which the accountant or firm is licensed, or required to be licensed, to practice. Ins 57.01(6)(6) “Net assets” means assets minus liabilities. Ins 57.01(7)(7) “Restricted reserve” means liquid assets maintained in a segregated account by a care management organization. Ins 57.01(8)(8) “Subsidiary” of a person means a person which is controlled, directly or indirectly through one or more intermediaries, by the first person. Ins 57.01(9)(9) “Ultimate controlling person” means a person who is not controlled by any other person. Ins 57.01(10)(10) “Work papers” means records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the independent certified public accountant’s examination of the financial statements of a care management organization. “Work papers” includes audit planning documentation, audit guides, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of examination of the financial statements of a care management organization or which support the opinion of the independent certified public accountant regarding the financial statements. Ins 57.01(11)(11) “Working capital” means a measure calculated as current assets minus current liabilities. Ins 57.01 HistoryHistory: EmR0927: emerg. cr. eff. 10-10-09; CR 09-093: cr. Register May 2010 No. 653, eff. 6-1-10. Ins 57.04Ins 57.04 Financial requirements. All of the following are the minimum financial requirements for compliance with this section unless a different amount is ordered by the commissioner, after consultation with the department: Ins 57.04(1)(1) Working capital. Unless otherwise ordered by the commissioner the care management organization shall maintain working capital of not less than 3% of the projected annual capitation made over the effective contract period. Ins 57.04(2)(2) Restricted reserve. Unless otherwise ordered by the commissioner the care management organization shall maintain a restricted reserve of not less than the sum of the following: Ins 57.04(2)(a)(a) 8% of the first $5 million of annual budgeted capitation revenue. Ins 57.04(2)(b)(b) 4% of the next $5 million annual budgeted capitation revenue. Ins 57.04(2)(c)(c) 3% of the next $10 million annual budgeted capitation revenue. Ins 57.04(2)(d)(d) 2% of the next $30 million annual budgeted capitation revenue. Ins 57.04(2)(e)(e) 1% of annual budgeted capitation revenue in excess of $50 million. Ins 57.04(3)(3) Accessing restricted reserve funds. A care management organization may not access the restricted reserve unless: Ins 57.04(3)(a)(a) A plan for accessing the funds is filed with the commissioner at least 30 days prior to the proposed effective date; and Ins 57.04(3)(b)(b) The commissioner, after consulting with the department, does not disapprove the plan in the 30 day timeframe. Ins 57.04(4)(4) Risks. Risks and factors the commissioner may consider in determining whether to require greater restricted reserves by order include all of the following: Ins 57.04(4)(a)(a) Types of contingencies. The commissioner shall consider the risks of: