Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
031 - BUREAU OF INSURANCE
Chapter 840 - PRIVATE PURCHASING ALLIANCES
Section 031-840-5 - Licensure

(1) A detailed, written business plan explaining how the applicant intends to meet the public policy objectives of reduced cost, increased access, and improved quality in the marketplace. Material changes in policy or operations of the business plan are subject to the prior approval of the Superintendent. The business plan shall include, but not be limited to, the following information:

(2) The applicant's articles of incorporation, bylaws, and other formation and business operation documents. An alliance must demonstrate to the satisfaction of the Superintendent that its corporate governance makes it an appropriate and effective representative of the interests of the population to be served within the proposed service area. An alliance must demonstrate that it is more than a marketing or distribution channel for a single product or the products of a single carrier.

(3) A list of officers and directors of the applicant and the contract administrator, if one is employed, and personal biographical information or firm descriptions for each. The officers, directors and contract administrator shall not have a prior record of administrative, civil, or criminal violations within any financial service industry. The personal biographical information and firm descriptions shall demonstrate that those involved in the operation of the alliance have the expertise, experience, and character to effectively and professionally represent the population to be served in a fiduciary capacity;

(4) Evidence of adequate security and prudence in the accounting, deposit, collection, handling, and transfer of money. An alliance shall also demonstrate adequate financial controls;

(5) The population to which the alliance will be marketing;

(6) Enrollment procedures to be used by the alliance;

(7) Eligibility standards for membership in the alliance;

(8) The standards to be used by the alliance to classify members into one or more risk pools;

(9) The criteria to be used by the alliance to select participating carriers; and

(10) Disclosure of any preexisting oral or written agreements with carriers, employers, or others.

(1) Failure to comply with the provisions of this Rule or with Chapter 18-A of Title 24-A M.R.S.A.;

(2) Failure to comply with and carry out the alliance business plan approved by the Superintendent;

(3) Failure to have adequate operational/financial controls or failure to follow approved procedures;

(4) Failure to meet minimum standards in a financial or performance audit or examination;

(5) Failure to comply with a lawful order of the Superintendent;

(6) Committing an unfair or deceptive act or practice as defined in Chapter 23 of 24-A M.R.S.A.;

(7) Filing any necessary form with the Superintendent that contains fraudulent information or omission; or

(8) Misappropriation, conversion, illegal withholding, or refusal to pay over upon proper demand funds that have been entrusted to the alliance in its fiduciary capacity.

(1) The alliance shall submit quarterly financial statements and annual reports on forms approved by the Superintendent. The financial statements and annual reports shall be designed to verify the operation of the alliance in a sound financial fashion, to ensure the alliance is not a risk-bearing entity, to verify the existence of sound financial controls and money management, to reveal any mismanagement or misappropriation of funds either through neglect or malfeasance, and to show whether the alliance membership includes a representative demographic sample of the eligible population;

(2) Material changes in the business plan are subject to approval by the Superintendent before implementation by the alliance.