§ 26.1-14-07 — Management and administration of the company

1. If, in the judgment of the board of directors, the affairs of the company thereby may be
administered suitably and efficiently, the company may enter into a contract, not to
exceed five years in duration, whereby the affairs of the company may be administered
by a licensed insurer or a licensed nonprofit health service plan, subject to any
continuing direction by the board of directors as specified in the articles of
incorporation, the bylaws, and the contract.
2. The basis of compensation to the administering licensed insurer or plan in any contract
described in this section must be reimbursement of expenses reasonably allocable to
the business of the company plus an appropriate and reasonable additional allowance
as specified in the contract. Any additional allowance, if based upon premium volume
or size of membership, must contain a reasonable aggregate dollar maximum. The
amount of the fee may not be made dependent on the underwriting or investment
profits of the company.
3. Upon the execution of any contract, the company shall promptly file a copy with the
commissioner. The contract becomes effective thirty days from the date of the filing
unless the commissioner, prior to the effective date, disapproves the contract as illegal,

unduly onerous, or not in the best interest of the company and states the reasons for
the findings.