(1) The MCHA board, relying on the advice of a qualified actuary, may propose that the commissioner limit enrollment in the MACP to a specified number of covered individuals. The commissioner shall approve or disapprove the proposed enrollment cap.

(2) The MCHA board is responsible for setting an appropriate reserve for incurred but not reported claims, and for monitoring the financial condition of the MACP pool. The lead carrier is responsible for giving complete and accurate financial and claims payment information, including, but not limited to, appropriate financial projections and a projection of incurred but not reported claims, as required by the board to enable it to set appropriate reserves. The board shall submit a financial report for the MACP to the commissioner once every quarter, or more often if necessary, or if requested by the commissioner. The first quarterly report must be submitted on October 31, 2010.

(3) If applications for the MACP exceed an enrollment cap set by the commissioner, the MCHA shall create a waiting list for eligible individuals. The date of the application will determine an individual's place on the waiting list.

(4) If actuarial projections indicate that current claims, and incurred but not reported claims, threaten to exceed available revenue for the MACP pool, and if no additional federal funding is forthcoming, the board may recommend that the commissioner dissolve the MACP pool and terminate all coverage issued through that pool. The commissioner shall approve or disapprove the termination of coverage in the MACP pool. If termination of coverage is approved, covered individuals will receive:

(a) a 30 day notice of cancellation; and

(b) an opportunity to enroll in one of the association plans, with no break in coverage.

(i) Individuals who move to an association plan will:

(A) pay the same rates as other similarly situated individuals covered under that association plan;

(B) be allowed to choose any benefit design currently offered in the traditional high risk pool; and

(C) be given full credit for any annual out-of-pocket expenses already met in the MACP.

(ii) No preexisting condition exclusions will be applied to individuals from the MACP who transfer to an association plan because their coverage was terminated under the provisions of this rule.

(5) Any federal grant money that is left in reserve after the MACP terminates coverage and all claims have been paid will revert to the federal government. Any premium money that remains in reserve for the MACP after all final claims and other final expenses have been paid will be paid out in the following manner, as allocated by the board and the commissioner:

(a) to the MCHA association plan, if MCAP members have been transferred to that plan as a result of a closure of the MCAP for solvency reasons; and/or

(b) to individual premium payers on a pro rata basis, who were covered by the MACP at the time it closed.