Title 27
Insurance

Chapter 41
Health Maintenance Organizations

§ 27-41-18. Rehabilitation, liquidation, or conservation of health maintenance organization.

(a) Any rehabilitation, liquidation, or conservation of a health maintenance organization shall be deemed to be the rehabilitation, liquidation, or conservation of an insurance company and shall be conducted under the supervision of the director of business regulation pursuant to chapters 14.1, 14.2, and 14.3 of this title. The director of business regulation may apply for an order from the superior court directing the director to rehabilitate, liquidate, or conserve a health maintenance organization upon any one or more of the grounds included in chapter 14.3 of this title or upon any one or more of the following grounds:

(1) That the health maintenance organization is insolvent;

(2) That the health maintenance organization is in an unsound financial condition;

(3) That the health maintenance organization’s business policies are unsound or improper;

(4) That the health maintenance organization’s condition or management is such as to render its further transaction of business hazardous to the public or its enrollees;

(5) That the health maintenance organization’s funds, net cash, or contingent assets are deficient; or

(6) That the health maintenance organization is conducting its business fraudulently or refuses or neglects to comply with the laws of this state.

(b) A claim by a healthcare provider who agrees not to assert that claim against any enrollee of the health maintenance organization for an uncovered expenditure has priority over other providers of services.

(c) For purposes of determining the priority of distribution of general assets, claims of enrollees and enrollees’ beneficiaries shall have the same priority as established in chapter 14.3 of this title for policyholders and beneficiaries of insureds of insurance companies. If an enrollee is liable to a provider for services provided pursuant to and covered by the health benefit plan, that liability shall have the status of an enrollee claim for distribution of general assets. A provider who is obligated by statute or agreement to hold enrollees harmless from liability for services provided pursuant to and covered by a health benefit plan shall have a priority of distribution of the general assets immediately following that of enrollees and enrollees’ beneficiaries as described herein, and immediately preceding the priority of distribution for priority Class 7 described in § 27-14.3-46.