33-30A-8. Surety bond required; guaranty of uninterrupted coverage.

Prior to authorization by the Commissioner to operate as a health plan purchasing cooperative, a nonprofit corporation shall, directly or through a contractor which provides administrative services to the corporation, file with the Commissioner a corporate surety bond in an amount deemed adequate by the Commissioner to provide for administration of the proposed purchasing cooperative for a six-month period, in favor of the state and for the use and benefit of the state and of members and creditors of the cooperative. Such bond shall be for protection against insolvency; or against malfeasance, including fraud or theft of funds. The bond shall be conditioned as follows:#

1. (1)

   For prompt payment of premiums due;#

2. (2)

   For payment of all indebtedness of the corporation; and#

3. (3)

   For payment of costs incurred by the state in the administration of the corporation.#

Any such bond filed or deposit made or remaining portion thereof held under this Code section shall be released and discharged upon settlement and termination of all liabilities against it.#

Any health benefit plan offered through a purchasing cooperative must guarantee uninterrupted coverage for a six-month period in the event of the purchasing cooperative’s insolvency, subject to timely payment of premiums due.#

Examinations, rehabilitation, receivership, orders, and administrative supervision of health plan purchasing cooperatives shall be in accordance with this title.#