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MARTIN’S POINT GENERATIONS, LLC
REPORT OF EXAMINATIONAS OFDECEMBER 31, 2007
I hereby certify that the attached report of examination dated May 1, 2008 shows the condition and affairs of MARTIN’S POINT GENERATIONS, LLC of Portland, Maine as of December 31, 2007, and has been filed in the Bureau of Insurance as a public document.
Dated this _____ day of ____________, 2008
TABLE OF CONTENTS SCOPE OF EXAMINATION ....................................................................................................................2
May 1, 2008 Honorable Mila Kofman RE: Martin’s Point Generations, LLC Statutory Examination of the Period Ended December 31, 2007 Dear Superintendent: Pursuant to your instructions and in accordance with the provision of 24-A M.R.S.A. §4215, the Maine Bureau of Insurance (hereinafter, “Bureau”) conducted an examination, as of December 31, 2007, on the condition and financial affairs of MARTIN’S POINT GENERATIONS, LLC The examination included the gathering of information and review and testing at the home office of Martin’s Point Generations, LLC (hereinafter, “Company” or “MPG”) in Portland, Maine. The examination was made in accordance with the standards and procedures established by the Bureau and the National Association of Insurance Commissioners (hereinafter, “NAIC”) and for that reason, included tests of the accounting records and other procedures considered necessary under the circumstances. The accompanying financial statements have been prepared pursuant to statutory accounting practices prescribed or permitted by the NAIC and the Bureau. These practices differ in certain respects from generally accepted accounting principles. For purposes of this report, comments on various items may be limited to matters involving departure from laws, rules or regulations, a significant change in the amount of the item, or where an explanation, comment and/or recommendation is warranted. The following report is respectfully submitted. The Bureau conducted a routine full-scope statutory examination of the Company covering the period of January 11, 2006 to December 31, 2007. The efficiency of the risk-focused approach examination was enhanced by extensive use of the work-papers prepared by MPG’s external auditor. The following matters were reviewed to assess their impact on financial conditions and conformity with related laws. The Company is a wholly owned subsidiary of Martin’s Point Health Care, Inc. (hereinafter, “Parent” or “MPHC”) a Maine non-profit corporation located in Portland Maine. MPG is licensed as a health maintenance organization (hereinafter, “HMO”) restricted to Medicare Advantage. MPG offers certain Medicare Advantage Plan products, under a contract with the Centers for Medicare & Medicaid Services (hereinafter, “CMS”). The Company was incorporated in the State of Maine as a Limited Liability Company on January 11, 2006, and commenced business on January 1, 2007. The State of Maine granted MPG an HMO license, restricted to Medicare Advantage, on April 6, 2006. The chart below is an organizational chart of the Company as of December 31, 2007:
The Company is governed by an eight-member Board of Directors, which is the same Board that governs the Parent. The following are the duly elected members of the Board of Directors and the Officers serving at December 31, 2007:
Operating services and management functions are provided by MPHC pursuant to the written Operating Agreement ratified in the Initial Consent of Sole Member and to the written Management Services Agreement, respectively. Each Director and Officer of the Company is required to complete a conflict of interest statement annually to disclose any material interest or affiliation which is likely to be in conflict with his/her official duties and responsibilities to the Company. Review of the Company’s organization documents, the Parent’s Articles of Incorporation, and the Parent’s Bylaws, were performed. Review of all minutes of the Board of Directors’ meetings, and all Board Committee Meetings, from the period January 1, 2007 to the completion of field work was performed. It was noted that the Board of Directors meetings, as well as all Board Committees, for both the Company and the Parent are combined into single meetings. The following table presents certain comparative data that the Company reported for the period under examination:
As indicated in the table presented on the previous page, MPG experienced a loss in 2006 and 2007. The Parent provided gross paid capital of $3,000,000 in 2006 and $1,000,000 in 2007. A health maintenance organization is required by 24-A M.R.S.A. §4204 (2-A)(H), to maintain fidelity insurance on employees and officers in an amount not less than $250,000. The Company does not have any employees, but all operations are run by the Parent. The Parent maintains a commercial crime policy with a single limit of $500,000. Officers' and Employees' Welfare and Pension Plans The Company does not have any employees. All operations are performed by the Parent under a written Operating Agreement, and all administrative duties are provided by the Parent under a written Management Services Agreement. All general and administrative costs are allocated to the Company by the Parent on a basis of direct expenses incurred by the Parent. Territory and Plan of Operation The Company is licensed only in the State of Maine to write health insurance, restricted to Medicare Advantage. At December 31, 2007 MPG was offering one Medicare Advantage Plan product pursuant to the CMS contract. Accounts and records were reviewed and tested in order to assess their impact on financial condition and conformity with related laws. The Company maintains an excess-of-loss reinsurance agreement with a non-affiliate. The reinsurance covers 90% of the loss amount in excess of $125,000 limited to $500,000 per member per policy period. The accompanying financial statements present fairly, in all material respects, the Company’s statutory financial position as of December 31, 2007 and statutory results of operations for the period then ended. The financial statements as of December 31, 2006 are unexamined and are presented for comparative purposes only. STATUTORY STATEMENT OF ADMITTED ASSETS, LIABILITIES, AND CAPITAL AS OF DECEMBER 31
STATUTORY STATEMENT OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31
STATEMENT OF STATUTORY CAPITAL AND SURPLUS FOR THE YEARS ENDED DECEMBER 31
NOTES TO THE FINANCIAL STATEMENTS Note 1 – Cash and Short-term Investments Short-term investments consist of money market funds which are properly reported as short-term investments as required by SSAP No. 2.
Note 2 – Payable to Parent, Subsidiaries and Affiliates Amounts due to parent, subsidiaries and affiliates represent the amounts payable under a written Operating Agreement and a written Management Services Agreement. All operations, management, and administrative services are performed by the Parent for the benefit of the Company. Note 3 – Capital and Surplus Capital and surplus of $1,927,591 and $2,369,289 for 2007 and 2006 respectively, were in compliance with the minimum net worth requirement pursuant to 24-A M.R.S.A. §4204-A. The Company’s financial condition is reflected in statements and supporting exhibits contained in this report. The basis of preparation of such statements conforms to the laws, rules and regulations prescribed and/or permitted by the Maine Bureau of Insurance. Acknowledgement of cooperation and assistance extended to the examiners by all Company personnel is hereby expressed.
STATE OF MAINE
Michael R. Nadeau, CPA, CFE, being duly sworn according to law, deposes and says that in accordance with the authority vested in him by Mila Kofman, Superintendent of Insurance, pursuant to the Insurance Laws of the State of Maine, he has made an examination on the conditions and affairs of the MARTIN’S POINT GENERATIONS, LLC of Portland, Maine as of December 31, 2007, and that the foregoing report of examination, subscribed to by him, is true to the best of his knowledge and belief. The following examiners from the Bureau of Insurance assisted: Stuart E. Turney, CPA
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Subscribed and sworn to before me this _____ day of _________, 2008
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Last Updated: February 10, 2012 |
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