Ch. 507

1993 LAWS OF MARYLAND

(4) "SUBSIDIARY" OF A PERSON MEANS AN AFFILIATE CONTROLLED BY
THAT PERSON:                                                                                                                             

(I)       DIRECTLY; OR

(II)     INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES.

(B)      A NONPROFIT HEALTH SERVICE PLAN MAY NOT INVEST IN OR
OTHERWISE ACQUIRE ANY AFFILIATE OR SUBSIDIARY UNLESS:                                   

(1)      THE AFFILIATE OR SUBSIDIARY IS LICENSED BY THE
COMMISSIONER; OR

(2)       (I) . THE AFFILIATE OR SUBSIDIARY IS WHOLLY MAJORITY OWNED
BY THE NONPROFIT HEALTH SERVICE PLAN; AND

(II) THE BUSINESS OF THE AFFILIATE OR SUBSIDIARY IS DIRECTLY
RELATED TO THE OPERATION OF THE NONPROFIT HEALTH SERVICE PLAN OR THE
ADMINISTRATION OF A HEALTH BENEFITS PROGRAM.

(C)      (1) A NONPROFIT HEALTH SERVICE PLAN SHALL SUBMIT A STATEMENT
OF PROPOSED ACTION TO THE COMMISSIONER BEFORE THE PLAN MAY:

(I)       INVEST IN OR OTHERWISE ACQUIRE CREATE, ACQUIRE, OR

INVEST IN TO CONTROL ANY AFFILIATE OR SUBSIDIARY; OR                                         

(II)     ALTER THE STRUCTURE, ORGANIZATION, PURPOSE, OR
OWNERSHIP OF THE PLAN OR OF ANY AFFILIATE OR SUBSIDIARY OF THE
CORPORATION;                             

(III)    MAKE ANY INVESTMENT EXCEEDING $500,000; OR

(IV)    MAKE ANY INVESTMENT IN AN AFFILIATE OR SUBSIDIARY.

(2)      THE STATEMENT OF PROPOSED ACTION REQUIRED UNDER THIS
SUBSECTION SHALL BE FILED BY THE NONPROFIT HEALTH SERVICE PLAN NOT LESS
THAN 60 DAYS PRIOR TO THE EFFECTIVE DATE OF THE PROPOSED ACTION.

(3)      THE NONPROFIT HEALTH SERVICE PLAN MAY NOT ENGAGE IN THE
PROPOSED. ACTION LISTED UNDER PARAGRAPH (1)(I) THROUGH (III) OF THIS
SUBSECTION UNLESS THE ACTION IS APPROVED IN WRITING BY THE COMMISSIONER.

(4)      THE COMMISSIONER SHALL EITHER APPROVE OR DISAPPROVE THE
PROPOSED ACTION WITHIN 60 DAYS FROM RECEIPT OF THE STATEMENT OF
PROPOSED ACTION.                     

(D)     ANY CORPORATION DOMICILED IN A JURISDICTION THAT HAS ADOPTED
BY STATUTE OR REGULATION PROVISIONS THAT LIMIT THE OWNERSHIP AND
OPERATION OF AN AFFILIATE OR SUBSIDIARY IN SUBSTANTIALLY THE SAME
MANNER AS THE PROVISIONS OF THIS SECTION MAY BE AUTHORIZED BY THE
COMMISSIONER TO COMPLY WITH THE LAW OF ITS DOMICILIARY JURISDICTION.

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