Kaiser Permanente on Tuesday agreed to give members a credit worth $155 million after insurance regulators expressed concern about the amount of money the health maintenance organization had been sending to California affiliates.

Kaiser, which has some 485,000 members largely in the Denver and Boulder area, also agreed to expand services to southern Colorado as part of the accord with the Department of Regulatory Agencies.

The agreement came after Colorado's Division of Insurance last year examined Kaiser's financial statements from 2001 through 2005. Insurance Commissioner Marcy Morrison said she grew "concerned" about Kaiser's rising net worth and the amount the Colorado division was sending to affiliates in its home state of California.

"We believe that money should be staying here in the state," Morrison said at a news conference.

Kaiser Colorado President Donna Lynne said that the payments were to an affiliate that invested money for the Colorado division, but state regulators wanted that changed. She said Kaiser agreed to the settlement because it meshed with the insurer's efforts to provide affordable health care and expand into new areas in southern Colorado.

Kaiser last year announced plans to open a new office in Parker, and is working to expand into El Paso, Pueblo, Teller and Fremont counties, Lynne said.

Under terms of the agreement, Colorado subscribers to Kaiser's individual family plans will receive a $287 credit, which is equal to an average one-month premium, in both 2009 and 2010.

Employers, who comprise the majority of Kaiser customers, will receive the same credit. Employers can keep the money, pass it on to employees or use it to add more benefits.

Kaiser will also contribute another $5 million in the next two years to help low-income members afford their co-payments.

As a nonprofit insurer, Kaiser comes under special state scrutiny for how it uses reserves. Most other major health insurers are for-profit, and can instead opt to return any income gains to shareholders in the form of dividends.

The agreement took a year to negotiate, Morrison said, and averts public hearings or a possible court battle.

The $2.3 billion organization currently has $700 million in reserves, or the equivalent of three month's expenses, Lynne said. All insurance companies have reserves, which are used to cover everything from pension obligations to building new medical facilities.

Kaiser will take the money it planned to put toward its 2009 and 2010 reserves to finance the credits. The insurer said it will temporarily shift to leasing, rather than building, its medical facility expansion in order to trim costs.