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ROBERT L. EHRLICH, JR., Governor Ch. 356
(b) Subsections (c) through [(f)] (H) of this section apply to a nonprofit health
service plan that is incorporated under the laws of the State and operates under a
certificate of authority issued by the Commissioner under this subtitle.
(c) (1) The business and affairs of a nonprofit health service plan shall be
managed under the direction of a board of directors.
(2) The board and its individual members are fiduciaries and shall act:
(i) in good faith;
(ii) in a manner that is reasonably believed to be in the best
interests of the corporation AND ITS CONTROLLED AFFILIATES OR SUBSIDIARIES
THAT OFFER HEALTH BENEFIT PLANS; [and]
(III) IN A MANNER THAT IS REASONABLY BELIEVED TO BE IN
FURTHERANCE OF THE CORPORATION'S NONPROFIT MISSION; AND
[(iii)] (IV) with the care that an ordinarily prudent person in a like
position would use under similar circumstances.
(3) THE PRINCIPAL FUNCTIONS OF THE BOARD SHALL INCLUDE:
(I) ENSURING THAT THE CORPORATION EFFECTIVELY CARRIES
OUT THE NONPROFIT MISSION ESTABLISHED UNDER § 14-102(C) OF THIS SUBTITLE;
(II) SELECTING AND EVALUATING THE PERFORMANCE OF
CORPORATE MANAGEMENT;
(III) ENSURING TO THE EXTENT PRACTICABLE THAT HUMAN
RESOURCES AND OTHER RESOURCES ARE SUFFICIENT TO MEET CORPORATE
OBJECTIVES;
(IV) NOMINATING AND SELECTING SUITABLE CANDIDATES FOR
INDIVIDUALS TO THE BOARD; AND
(V) ESTABLISHING A SYSTEM OF GOVERNANCE AT THE BOARD
LEVEL, INCLUDING AN ANNUAL EVALUATION OF BOARD PERFORMANCE.
(4) EACH MEMBER OF THE BOARD SHALL DEMONSTRATE A
COMMITMENT TO THE MISSION OF THE NONPROFIT HEALTH SERVICE PLAN.
[(3)] (5) An officer or employee of a nonprofit health service plan or any
of its affiliates or subsidiaries may not be appointed or elected to the board.
[(4)] (6) A nonprofit health service plan is subject to the provisions of §
2-419 of the Corporations and Associations Article.
(d) (1) THIS SUBSECTION APPLIES TO A CORPORATION THAT:
(I) IS ISSUED A CERTIFICATE OF AUTHORITY AS A NONPROFIT
HEALTH SERVICE PLAN; AND
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