§ 22:250 — Fiduciary duties of certain persons; bond required; encumbering assets

Louisiana § 22:250

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

A. Any director, officer, or employee of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of such health maintenance organization shall be responsible for such funds in a fiduciary relationship to the health maintenance organization.
B. A health maintenance organization shall maintain in force a fidelity bond on employees and officers in an amount not less than one hundred thousand dollars or insurance in a form satisfactory to the commissioner in lieu of such bond. All such bonds or insurance shall be written with at least a one-year discovery period and if written with less than a three-year discovery period shall contain a provision that no cancellation or termination of the bond or insurance, whether by or at the request of the insured or by the underwriter, shall take effect prior to the expiration of ninety days after written notice of such cancellation or termination has been filed with the commissioner, unless an earlier date of such cancellation or termination is approved by the commissioner.
C. No asset of a health maintenance organization may be encumbered, pledged, or utilized to secure a loan or to confer a personal benefit on any officer, director, employee, agent, stockholder, or any beneficiary of any trust of any other person responsible to the health maintenance organization; however, nothing herein contained shall prevent any such person from receiving benefits as an enrollee. Any person and any officer, director, employee, agent, partner, stockholder, or any beneficiary of any trust violating this provision shall be fined two times the amount of the benefit conferred but not less than ten thousand dollars and shall be removed forthwith from any office, position, capacity, or relationship with the health maintenance organization.
D. In the event any situation described in Subsection C of this Section occurs, the commissioner shall have a cause of action and standing to sue to recover and conserve such property.

Legislative History

Acts 1986, No. 1065, §1; Redesignated from R.S. 22:2007 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 503, §1.