WILLIAM DONALD SCHAEFER, Governor                             Ch. 9

707.

(a)     The Commissioner shall establish the Maryland [small employer] health
reinsurance pool and shall notify all carriers approved to be [small employer] HEALTH
INSURANCE 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] INDIVIDUALS OR GROUPS 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.

(d)     The initial organizational meeting shall take place by October 1, 1994.

(e)      (1) The reinsuring carriers shall elect an initial Board of Directors to be
composed of seven members.

(2)     If the initial Board is not elected at the organizational meeting, the
Commissioner shall appoint the initial Board within 60 days after the organizational meeting.

(3)     The Board shall include representation from [carriers whose principal
health insurance business is in the small employer market and ], to the extent possible, at least
one nonprofit health service plan, at least one commercial carrier, and at least one health
maintenance organization.

(4)     No carrier, including its affiliates, may be represented by more than one
member on the Board.

(5)     The term of a member is 3 years except that the initial members' terms shall
be staggered for periods of 1 to 3 years.

(6)     At the end of a term, a member continues to serve until a successor is
elected.

(7)     Vacancies shall be filled by an election of the remaining Board members.

(8)     A member who is elected after a term has begun serves only for the rest of the
term and until a successor is elected.

(9)     A member who serves 2 consecutive full 3-year terms may not be reelected
for 3 years after the completion of those terms.

(f)      (1) The Board shall appoint an executive director who shall be the chief
administrative officer of the pool.

(2)     The executive director serves at the pleasure of the Board.

(3)     Under the direction of the Board, the executive director shall perform any
duty or function that the Board requires.

(g)     A chairman shall be selected by the Board.

(h) The pool may employ a staff in accordance with the pool's budget.

- 601 -