Compilation of Rules and Regulations of the State of Georgia
Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER
Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE
Subject 120-2-79 - HEALTH PLAN PURCHASING COOPERATIVES
Rule 120-2-79-.05 - Health Plan Purchasing Cooperatives Surety Bond and Insurance

(1) At application and renewal every health plan purchasing cooperative shall file with the Commissioner a surety bond executed by a corporate surety insurer authorized to transact insurance in this state in favor of the Commissioner of Insurance of the State of Georgia, continuous in form and in an amount equal to at least ten percent of the amount of the funds handled or managed annually by the health plan purchasing cooperative, or if no funds were handled during the preceding year, ten percent of the amount of funds reasonably estimated to be handled during the current calendar year. In no event will the surety bond be less than $100,000.

(2) The bond shall inure to the benefit of any person damaged by any fraudulent act or conduct of the health plan purchasing cooperative and must be conditioned upon faithful accounting and application of all money coming into the health plan purchasing cooperative's possession in connection with its activities as a health plan purchasing cooperative.

(3) The bond remains in force until released by the Commissioner or canceled by the insurer. Without prejudice to any liability previously incurred, the insurer may cancel the bond upon advanced written notice to the health plan purchasing cooperative and by certified mail to the Commissioner (Attn: Regulatory Services Division). A health plan purchasing cooperative's certificate of authority shall be suspended if it does not file with the Commissioner a replacement bond before the date of cancellation of the previous bond. A replacement bond must meet all requirements of this section for the initial bond.

(4) Each health plan purchasing cooperative shall obtain and maintain surety bond coverage or other appropriate liability insurance, written by an insurer carrier authorized to transact insurance in this state, in an amount of at least $100,000. A copy of this policy must be filed with the Commissioner at application and renewal.

(5) Any policy written in accordance with paragraph (4) of this Rule shall be for a term of at least one year and shall contain provisions that:

(6) Upon written approval by the Commissioner, an eligible surplus lines carrier may write bonds or policies required by this Rule.

(7) Compliance by the health plan purchasing cooperative with this Rule is a prerequisite to approval by the Commissioner of its application for a certificate of authority.