PARRIS N. GLENDENING, Governor

Ch. 35

14-139. PROHIBITED ACTS OF OFFICERS, DIRECTORS, AND EMPLOYEES; CIVIL
PENALTY.

(A) PROHIBITED ACTS OF OFFICERS, DIRECTORS, AND EMPLOYEES.

AN OFFICER, DIRECTOR, OR EMPLOYEE OF A CORPORATION OPERATING
UNDER THIS SUBTITLE MAY NOT:

(1) WILLFULLY VIOLATE A PROVISION OF THIS ARTICLE OR A
REGULATION ADOPTED UNDER THIS ARTICLE;

(2) WILLFULLY MISREPRESENT OR CONCEAL A MATERIAL FACT IN A
STATEMENT, REPORT, RECORD, OR COMMUNICATION SUBMITTED TO THE
COMMISSIONER;

(3) WILLFULLY MISREPRESENT A MATERIAL FACT TO THE BOARD OF
DIRECTORS;

(4) MISAPPROPRIATE OR FAIL TO ACCOUNT PROPERLY FOR MONEY
THAT BELONGS TO THE CORPORATION, AN INSURER, AGENT, BROKER, SUBSCRIBER,
OR CERTIFICATE HOLDER;

(5) ENGAGE IN FRAUDULENT OR DISHONEST PRACTICES IN
CONNECTION WITH THE PROVISION OR ADMINISTRATION OF A HEALTH SERVICE

PLAN;

(6) WILLFULLY FAIL TO PRODUCE RECORDS OR ALLOW AN
EXAMINATION UNDER § 14-125 OF THIS SUBTITLE; OR

(7) WILLFULLY FAIL TO COMPLY WITH A LAWFUL ORDER OF THE
COMMISSIONER.

(B) CIVIL PENALTY — IN GENERAL.

(1) A PERSON THAT VIOLATES SUBSECTION (A) OF THIS SECTION IS
SUBJECT TO A CIVIL PENALTY NOT EXCEEDING $5,000 FOR EACH VIOLATION.

(2) INSTEAD OF OR IN ADDITION TO IMPOSING A CIVIL PENALTY, THE
COMMISSIONER MAY REQUIRE THE VIOLATOR TO MAKE RESTITUTION TO ANY
PERSON THAT HAS SUFFERED FINANCIAL INJURY AS A RESULT OF THE VIOLATION.

(C) SAME — REQUIRED CONSIDERATIONS.

IN DETERMINING THE AMOUNT OF FINANCIAL PENALTY TO BE IMPOSED, THE
COMMISSIONER SHALL CONSIDER:

(1) THE SERIOUSNESS OF THE VIOLATION;

(2) THE GOOD FAITH OF THE VIOLATOR;

(3) THE VIOLATOR'S HISTORY OF PREVIOUS VIOLATIONS;

(4) THE DELETERIOUS EFFECT OF THE VIOLATION ON THE PUBLIC AND
THE NONPROFIT HEALTH SERVICE INDUSTRY; AND

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