VETOES

concerning the sale of nonassessable policies including, but not
limited to, Sections 48, 49, and 50 of this article.

554.

(a)  The terms and conditions of all policies issued by the
Society and its subsidiaries to each class of physicians and
other health care providers shall be essentially uniform in terms
and coverage.

(b)  Notwithstanding the provisions of subsection (a), the
Society and its subsidiaries may prescribe reasonable
classifications of physicians and other health care providers and
insured activities and exposures based on good faith
determination of relative exposures and hazards among
classifications and may vary the limits, coverages, exclusions,
conditions, and loss-sharing provisions among classifications.
Additionally, the Society and its subsidiaries may prescribe, in
the case of an individual physician or other health care provider
within a class, reasonable variations in the terms of coverage
including, but not limited to, deductibles and loss-sharing
provisions, based upon the insured's prior loss experience and
current professional training and capability.

556.

(a) If, in the judgment of the board of directors, the
affairs of the Society thereby may be administered suitably and
efficiently, the Company may enter into a contract, not to exceed
five years in duration, whereby the affairs of the Society are
administered by a licensed insurer, or a licensed nonprofit
health service plan, subject to such continuing, direction by the
board of directors as specified in the articles of incorporation,
the bylaws, and the contract.

(b) Upon the execution of any contract, the Society shall
promptly file a true copy with the State Insurance Commissioner.
The contract shall become effective 30 days from the date of
filing unless the Commissioner, prior to the effective date,
disapproves the contract as being contrary to law, public policy
or unduly onerous and states the reasons for his findings.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall
take effect July 1, 1987.

June 2, 1987
The Honorable R. Clayton Mitchell, Jr.
Speaker of the House of Delegates

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