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<section article="gin" article_name="Insurance" number="14-116" title_number="14" title_name="Entities That Act as Health Insurers" subtitle_number="1" subtitle_name="Nonprofit Health Service Plans">
  <level label="a">
    <level label="1">
      <text>In this section, “unsound or unsafe business practice” means a business practice that:</text>
      <level label="i">
        <text>is detrimental to the financial condition of a nonprofit health service plan and does not conform to sound industry practice;</text>
      </level>
      <level label="ii">
        <text>impairs the ability of a nonprofit health service plan to pay subscriber benefits; or</text>
      </level>
      <level label="iii">
        <text>violates § 14-102, § 14-115, § 14-115.1, or § 14-139(a), (b), or (c) of this subtitle.</text>
      </level>
    </level>
    <level label="2">
      <text>“Unsound or unsafe business practice” includes:</text>
      <level label="i">
        <text>failing to comply with the notice requirements of § 14-119 of this subtitle;</text>
      </level>
      <level label="ii">
        <text>willfully hindering an examination of a nonprofit health service plan or its affiliates or subsidiaries; and</text>
      </level>
      <level label="iii">
        <text>failure of a director to attend at least 65% of the meetings of the board during a period of 12 consecutive months.</text>
      </level>
    </level>
  </level>
  <level label="b">
    <level label="1">
      <text>If the Commissioner believes that an officer or director of a nonprofit health service plan has engaged in an unsound or unsafe business practice, the Commissioner shall send a warning to that individual.</text>
    </level>
    <level label="2">
      <text>If the Commissioner believes that an officer or director of a nonprofit health service plan has failed to take appropriate action in response to a warning received under paragraph (1) of this subsection, the Commissioner may impose a civil penalty not exceeding $125,000 for each warning.</text>
    </level>
    <level label="3">
      <text>The Commissioner shall send a copy of the warning or, if a civil penalty is imposed under paragraph (2) of this subsection, a copy of the order:</text>
      <level label="i">
        <text>by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to each director of the nonprofit health service plan; and</text>
      </level>
      <level label="ii">
        <text>if the nonprofit health service plan is a corporation incorporated in a state other than this State, to the insurance commissioner of the state in which the corporation is incorporated.</text>
      </level>
    </level>
  </level>
  <level label="c">
    <level label="1">
      <text>If the nonprofit health service plan is incorporated in this State, the Commissioner may remove the officer or director if the Commissioner determines after a hearing that the unsound or unsafe business practice continued after the warning.</text>
    </level>
    <level label="2">
      <text>A copy of the removal order shall be served on the individual removed and each director of the nonprofit health service plan.</text>
    </level>
    <level label="3">
      <text>The individual removed is entitled to a hearing under Title 2 of this article.</text>
    </level>
    <level label="4">
      <text>Any person aggrieved by a final decision of the Commissioner under this section may appeal the decision under § 2-215 of this article.</text>
    </level>
  </level>
  <level label="d">
    <text>A nonprofit health service plan formed or organized under the laws of this State may not:</text>
    <level label="1">
      <text>form or organize under the laws of another jurisdiction unless the Commissioner determines that it is in the public interest; or</text>
    </level>
    <level label="2">
      <text>alter its structure, operations, or affiliations, if such alteration results in the for-profit activities of the plan becoming so substantial that the Insurance Commissioner determines that the purpose of the nonprofit health service plan may no longer be characterized as operating a nonprofit health service plan.</text>
    </level>
  </level>
  <level label="e">
    <text>The Commissioner may revoke a certificate of authority issued to a foreign corporation subject to this subtitle if:</text>
    <level label="1">
      <text>the foreign corporation operates a nonprofit health service plan that is affiliated with a nonprofit health service plan formed or organized under the laws of this State; and</text>
    </level>
    <level label="2">
      <text>the affiliation between the foreign nonprofit health service plan and the nonprofit health service plan formed or organized under the laws of this State is terminated.</text>
    </level>
  </level>
  <level label="f">
    <level label="1">
      <text>If the Attorney General has reason to believe that a nonprofit health service plan is engaging in an unsound or unsafe business practice, the Attorney General shall notify the Commissioner.</text>
    </level>
    <level label="2">
      <text>If the Commissioner fails to take action under this section within 60 days after notification by the Attorney General, the Attorney General may:</text>
      <level label="i">
        <text>investigate the unsound or unsafe business practice; and</text>
      </level>
      <level label="ii">
        <text>initiate an action in circuit court for appropriate relief to remedy the unsound or unsafe business practice, including the removal of an officer or director of the nonprofit health service plan.</text>
      </level>
    </level>
    <level label="3">
      <text>In the course of any investigation conducted by the Attorney General, the Attorney General may:</text>
      <level label="i">
        <text>subpoena witnesses;</text>
      </level>
      <level label="ii">
        <text>administer oaths;</text>
      </level>
      <level label="iii">
        <text>examine an individual under oath;</text>
      </level>
      <level label="iv">
        <text>compel production of records, books, papers, contracts, and other documents; and</text>
      </level>
      <level label="v">
        <text>obtain all necessary assistance from the Administration.</text>
      </level>
    </level>
  </level>
</section>
