University Health
Alliance under
state supervision

By Lyn Danninger
Star-Bulletin

Health insurer University Health Alliance will operate under state supervision after it failed to meet a Monday deadline to bring its reserves to minimum required levels.

State Insurance Commissioner Wayne Metcalf had given UHA until Monday to meet the requirement after the company fell behind in its reserves.

In its December 2000 filing with the state Insurance Division, UHA reported it was $1.23 million below the minimum required by law. In its most recent quarterly filing, UHA reported it had lessened the amount to around $740,000 for the quarter ended March 31.

Metcalf characterized the state's supervision of UHA as "an effort to reform and revitalize the company."

"UHA's inability to meet the statutory minimum requirement by (the) deadline triggered the state's obligation to take a step to ensure that the interests of the insurer's members were protected," he said.

Until UHA meets the minimum requirement, financial transactions will have to be approved by the insurance division, according to the order.

The company also has until June 30 to submit a formal written plan to the insurance commissioner detailing how it plans to maintain its compliance with the minimum reserve requirement.

UHA Executive Vice President and Chief Operating Officer Frank Appel said the company will be able to turn things around.

"It clearly gives us time to take the necessary steps to correct this and we fully expect to do so," he said. "We are certainly working with the Insurance Division on a plan to come into compliance. In the meantime it's business as usual and we are certainly paying our claims and meeting all of our obligations."

UHA is a non-profit mutual benefit society with around 29,000 members. From the last quarter of 2000 through the first quarter of 2001, UHA picked up 14,000 of those members from the Queen's Health Plans after it decided to exit the insurance business.

UHA also processes claims for several union trust funds in Hawaii. Metcalf's order does not affect those self-insured groups.