Ch. 330

2004 LAWS OF MARYLAND

WHEREAS, On May 22, 2003, CareFirst filed suit against the State of
Maryland in the U.S. District Court for the District of Maryland challenging the
constitutionality of the Act; and

WHEREAS, The State of Maryland filed suit against the Association and
CareFirst challenging the Association's termination of CareFirst's use of the Blue
Marks; and

WHEREAS, The State, the Association, and CareFirst sought to resolve the
issues concerning CareFirst's right to use the Blue Marks to ensure CareFirst
subscribers uninterrupted access to Blue Cross and Blue Shield branded products and
services while also protecting the public interest; and

WHEREAS, On June 6, 2003, the U.S. District Court for the District of
Maryland issued an Order and Consent Judgment (the "Order") resolving the issues
among the State, the Association, and CareFirst; and

WHEREAS, The Order altered certain provisions of the Act relating to the
authority of the Maryland Insurance Commissioner over compensation guidelines for
officers and executives of nonprofit health service plans; and

WHEREAS, It is desirable to conform the statute to the Order; now, therefore,

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Insurance

14-139.

(d) (1) The compensation committee of the board shall:

(i) identify nonprofit health service plans in the United States that
are similar in size and scope to the nonprofit health service plan managed by the
board; and

(ii) develop proposed guidelines, for approval by the board, for
compensation, including salary, bonuses, and perquisites, of all officers and
executives that is reasonable in comparison to compensation for officers and
executives of similar nonprofit health service plans.

(2)     [On or before June 1, 2004, the board shall submit the proposed
guidelines developed under paragraph (1)(ii) of this subsection to the Commissioner
for review and approval.

(3)     (i) The Commissioner shall review the proposed guidelines and,
within 60 days, approve or disapprove the proposed guidelines.

(ii) Failure of the Commissioner to act on the proposed guidelines
within 60 days shall constitute approval.

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