WILLIAM DONALD SCHAEFER, Governor                                Ch. 9

(2) AN ELECTION TO BECOME A REINSURING CARRIER UNDER THIS
SUBSECTION SHALL BE SUBMITTED TO THE COMMISSIONER ON A FORM AND IN A
MANNER REQUIRED BY THE COMMISSIONER BY SEPTEMBER I, 1994.

(3) THE NOTIFICATION OF A RISK-ASSUMING CARRIER SHALL INCLUDE AN
APPROPRIATE OPINION BY AN INDEPENDENT QUALIFIED ACTUARY THAT THE
RISK-ASSUMING CARRIER IS ABLE TO ASSUME AND MANAGE THE RISK OF ENROLLING
SMALL EMPLOYER GROUPS WITHOUT THE PROTECTION OF THE POOL.

(B) (1) THE ELECTION SHALL BE BINDING FOR A 3-YEAR PERIOD.

(2) AFTER THE INITIAL 3-YEAR PERIOD, AND EVERY 5 YEARS THEREAFTER,
CARRIERS SHALL AGAIN ELECT TO BE A RISK-ASSUMING OR REINSURING CARRIER. THE
ELECTION SHALL BE BINDING FOR A 5-YEAR PERIOD.

(3) THE COMMISSIONER MAY PERMIT A CARRIER TO CHANGE ITS
ELECTION AT ANY TIME FOR GOOD CAUSE SHOWN.

(4) THE COMMISSION MAY ALLOW A NEW CARRIER TO MAKE AN ELECTION
UNDER CONDITIONS ESTABLISHED BY THE COMMISSIONER.

(C)      IN DETERMINING WHETHER TO APPROVE AN APPLICATION BY A CARRIER TO
CHANGE ITS ELECTION, THE COMMISSIONER SHALL CONSIDER:

(1) THE APPLICANTS FINANCIAL CONDITION AND THE FINANCIAL
CONDITION OF ANY PARENT OR GUARANTEEING CORPORATION;

(2) THE APPLICANTS HISTORY OF ASSUMING AND MANAGING RISK;

(3) THE APPLICANT'S COMMITMENT TO MARKET FAIRLY TO ALL SMALL
EMPLOYERS IN THE STATE OR IN ITS SERVICE AREA;

(4) THE APPLICANTS ABILITY TO ASSUME AND MANAGE THE RISK OF
ENROLLING SMALL EMPLOYER GROUPS WITHOUT THE PROTECTION OF THE POOL; AND

(5) THE EFFECT OF APPROVAL OF THE APPLICATION ON THE FINANCIAL
VIABILITY OF THE POOL.

(D)     IN CONSIDERING AN APPLICATION UNDER SUBSECTION (C) OF THIS SECTION,
THE CARRIER MAY REQUEST A HEARING AS PROVIDED UNDER § 242B OF THIS ARTICLE.

707.

(A) THE COMMISSIONER SHALL ESTABLISH THE MARYLAND SMALL EMPLOYER
HEALTH REINSURANCE POOL AND SHALL NOTIFY ALL CARRIERS APPROVED TO BE
SMALL EMPLOYER CARRIERS OF STEPS TAKEN TO ESTABLISH THE POOL.

(B) BY SEPTEMBER 1, 1994, THE COMMISSIONER SHALL NOTIFY ALL CARRIERS
APPLYING TO SELL HEALTH BENEFIT PLANS TO SMALL EMPLOYERS IN THE STATE OF
THE TIME AND PLACE OF THE INITIAL MEETING OF THE BOARD.

(C) UNTIL BOARD MEMBERS ARE ELECTED, THE COMMISSIONER SHALL
CONVENE THE INITIAL MEETING AND ALL SUBSEQUENT MEETINGS OF THE BOARD AND
SHALL ADMINISTER ITS AFFAIRS.

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