VETOES

The Honorable R. Clayton Mitchell, Jr.
Speaker of the House of Delegates
State House
Annapolis, Maryland 21401

Dear Mr. Speaker:

In accordance with Article II, Section 17 of the Maryland
Constitution, I have today vetoed House Bill 1405.

This bill provides the Insurance Commissioner with additional
authority as a rehabilitator, subject to court approval, in the
event a health maintenance organization (HMO) becomes insolvent,
and requires each HMO by January 1, 1990 to develop an insolvency
plan.

Senate Bill 758, which was passed by the General Assembly and
signed by me on May 25, 1989, accomplishes the same purpose.
Therefore, it is not necessary for me to sign House Bill 1405.

Sincerely,

William Donald Schaefer

Governor

House Bill No. 1405

AN ACT concerning

Health Maintenance Organizations - Rehabilitation and Insolvency

FOR the purpose of authorizing the Insurance Commissioner to take
certain actions as a rehabilitator or liquidator of a health
maintenance organization under certain circumstances;
providing for the continuation of benefits to subscribers
and enrollees of insolvent health maintenance organizations
under certain circumstances; specifying that certain claims
and expenses incurred by the Commissioner as a receiver of a
health maintenance organization be considered expenses for
the administration of the receivership plan and have
priority over all other expenses; specifying that enrollees
or subscribers of health maintenance organizations be held
harmless for certain financial obligations of health
maintenance organizations; requiring health maintenance
organizations to have certain insolvency plans by a certain
date; and generally relating to the rehabilitation and
insolvency of health maintenance organizations.

BY repealing and reenacting, with amendments,

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