California Insurance Code & EthicsQuestion 51 of 158
A producer is asked which California regulator oversees Health Maintenance Organization (HMO) plans, as opposed to traditional indemnity insurers. The correct answer is:
a.California Department of Insurance (CDI) regulates HMOs
b.Federal Centers for Medicare & Medicaid Services regulates HMOs
c.The Franchise Tax Board regulates HMOs
d.Department of Managed Health Care (DMHC) regulates HMOs
Explanation
Under the Knox-Keene Act (Health & Safety Code §1340 et seq.), HMOs and other health-care service plans are regulated by the Department of Managed Health Care (DMHC), a separate agency from the California Department of Insurance, which regulates traditional indemnity insurers. Personal lines producers should know the distinction even though it falls outside their direct scope.
Law Reference: Cal. Ins. Code §106; Health & Safety Code §1340 et seq.Practice all 158 questions free — no signup required.
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