Ch. 11

1996 LAWS OF MARYLAND

(IV) THE BOARD OF DIRECTORS MUST CONSIST OF INDIVIDUALS
WHO LIVE IN DIFFERENT GEOGRAPHICAL AREAS OF THE STATE.

(C) BOARD TO GOVERN SOCIETY.

THE BOARD OF DIRECTORS GOVERNS THE SOCIETY AND EXERCISES THE
CORPORATE POWERS OF THE SOCIETY.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 551(a).

In subsection (b)(3)(iv) of this section, the word "individuals" is substituted
for the former word "persons" for specificity in light of Art. 1, § 15 of the
Code, which provides that the word "person" includes a corporation,
partnership, or other specified entities unless this construction would be
unreasonable.

Also in subsection (b)(3)(iv) of this section, the former reference to members
who live in "various" geographical areas of the State is deleted as included in
the reference to "different" geographical areas.

Former Art. 48A, § 551(b), which required the initial Board of Directors to
prepare and file articles of incorporation and bylaws within 30 days after
appointment by the Governor, is deleted as obsolete.

Defined terms: "Insurer" § 1-101
"Physician" § 24-201
"Society" § 24-201

24-205. ADMINISTRATION OF SOCIETY BY LICENSED INSURER.

(A)     IN GENERAL.

(1)      IF THE BOARD OF DIRECTORS DETERMINES THAT THE AFFAIRS OF
THE SOCIETY MAY BE ADMINISTERED SUITABLY AND EFFICIENTLY, THE SOCIETY
MAY ENTER INTO A CONTRACT WITH A LICENSED INSURER OR LICENSED
NONPROFIT HEALTH SERVICE PLAN TO ADMINISTER THE AFFAIRS OF THE SOCIETY,
SUBJECT TO THE CONTINUING DIRECTION OF THE BOARD OF DIRECTORS SPECIFIED
IN THE ARTICLES OF INCORPORATION AND BYLAWS OF THE SOCIETY AND THE
CONTRACT.

(2)     A CONTRACT MAY NOT EXCEED 5 YEARS.

(B)     ACTION BY COMMISSIONER ON CONTRACT.

(1)      ON EXECUTION OF THE CONTRACT, THE SOCIETY PROMPTLY SHALL
FILE A TRUE COPY OF THE CONTRACT WITH THE COMMISSIONER.

(2)     THE CONTRACT IS EFFECTIVE 30 DAYS AFTER THE DATE OF FILING
UNLESS, BEFORE THE EFFECTIVE DATE, THE COMMISSIONER DISAPPROVES THE
CONTRACT AS CONTRARY TO LAW OR PUBLIC POLICY OR AS UNDULY ONEROUS
AND STATES THE REASONS FOR THE DISAPPROVAL.

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