Marvin Mandel, Governor                        1107

355.

(b) Requisites to issuance.—The Insurance Commissioner shall
issue a certificate of authority or license to each applicant upon the
payment of the fees provided for by Section 41 of this article and
upon being satisfied:

(1)   That the applicant has been organized bona fide for the pur-
pose of establishing, maintaining and operating a nonprofit health
service plan;

(2)   That each contract executed, or proposed to be executed, by
the applicant and any hospital, physician, chiropodist, pharmacist,
dentist or optometrist, for the furnishing of hospital, medical, chiro-
podial, pharmaceutical, dental or optometric service to the subscribers
to the health service plan, obligates, or will when executed, obligate
each hospital, physician, chiropodist, pharmacist, dentist or optome-
trist party thereto to render the service to which each subscriber
may be entitled under the terms and conditions of the various con-
tracts issued, or proposed to be issued, by the applicant to subscribers
to the plan, and that each subscriber shall be entitled to reimburse-
ment for any such chiropodial or optometric service, whether the
said service is performed by a doctor of medicine, duly licensed chi-
ropodist, or duly licensed optometrist.

(3)  That each contract issued, or proposed to be issued, to sub-
scribers to the plan is in a form approved by the Insurance Com-
missioner, and that the rates charged, or proposed to be charged,
for each form of such contract are fair and reasonable;

(4)  That no contributions to the funds of the corporation for
working capital are repayable by the corporation except out of the
earned premiums over and above operating expenses, payments to
participating hospitals, physicians, chiropodists, pharmacists, den-
tists, or optometrists and such reserve as the Insurance Commis-
sioner may deem adequate;

(5)  That the amount of money actually received by the applicant
upon the term specified in paragraph (4) hereof for working capital
is sufficient to carry all acquisition costs and operating expenses for
a period of at least three months from the date of the issuance of
the certificate of authority or license, but in no case to be less than
ten thousand dollars ($10,000), provided, however, that any cor-
poration seeking an initial certificate of authority under this subtitle
after July 1, 1969, shall have working capital of at least $100,000.

(6)   That the corporation shall maintain a minimum reserve equal
to at least 5% 3% of the subscription charges earned during the prior
calendar year as shown on the annual statement filed in the office of
the Commissioner. Any corporation now operating under this section
shall have until December 31, 1973, to comply with 50% of this re-
quirement and until December 31, 1974, to comply with the balance
of such requirement.

Sec. 2. And be it further enacted, That this Act shall take effect
July 1, 1971. JANUARY 1, 1972.

Approved May 17, 1971.