42 CFR § 423.420 - Solvency standards for non-licensed entities.

---
identifier: "/us/cfr/t42/s423.420"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "42 CFR § 423.420 - Solvency standards for non-licensed entities."
title_number: 42
title_name: "Public Health"
section_number: "423.420"
section_name: "Solvency standards for non-licensed entities."
chapter_name: "CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
subchapter_number: "B"
subchapter_name: "MEDICARE PROGRAM"
part_number: "423"
part_name: "VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh."
regulatory_source: "70 FR 4525, Jan. 28, 2005, unless otherwise noted."
cfr_part: "423"
---


# 423.420 Solvency standards for non-licensed entities.

(a) *Establishment and publication.* CMS establishes and publishes reasonable financial solvency and capital adequacy standards for entities specified in paragraph (b) of this section.

(b) *Compliance with standards.* A PDP sponsor that is not licensed by a State and for which a waiver application is approved by CMS under § 423.410 or § 423.415 must maintain reasonable financial solvency and capital adequacy in accordance with the standards established by CMS under paragraph (a) of this section.