How groups must collect premiums and keep reserves

(a) Each group shall establish to the satisfaction of the insurance commissioner a premium payment plan which shall include an initial payment by each member of at least twenty-five per cent of that member's annual premium before the start of the group's fund year and payment of the balance of each member's annual premium in monthly or quarterly installments. (b) Each group shall establish and maintain actuarially appropriate loss reserves, which shall include reserves for known claims and expenses associated therewith and claims incurred but not reported and expenses associated therewith. (c) Each group shall establish and maintain bad debt reserves based on the historical experience of the group or other groups.