§ 27-41-7 — § 27-41-7. Fiduciary responsibilities.

§ 27-41-7. Fiduciary responsibilities.

(a) Any director, officer, or employee of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of the organization shall be responsible for those funds in a fiduciary relationship to the enrollees.

(b) A health maintenance organization shall maintain in force a fidelity bond on employees or officers in an amount not less than one hundred thousand dollars ($100,000) or any greater sum that may be prescribed by the director. All fidelity bonds shall be written with at least a one-year discovery period and if written with less than a three-year (3) discovery period shall contain a provision that no cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, shall take effect prior to the expiration of ninety (90) days after written notice of cancellation or termination has been filed with the director unless an earlier date of cancellation or termination is approved by the director.

Legislative History

P.L. 1983, ch. 225, § 2.