Section 031-840-5 - LicensureA. An applicant for licensure as a private purchasing alliance, pursuant to 24-A M.R.S.A. §1952, must file an application with the Superintendent, accompanied by an application fee of $400 and including the following information: (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: (a) The specific steps planned to advance cost control and quality improvement, and to improve access to health insurance or health care services. The business plan shall demonstrate that the alliance will have the technical expertise and physical capacity to serve a significant population. There is a rebuttable presumption that ten percent of the population within the proposed service area is an appropriate threshold for measuring significance. The business plan shall demonstrate that the alliance will reduce cost, improve quality, and improve access to health insurance or health care services; and(b) The scope of services to be offered in the proposed service area and the resources and expertise to be used to implement and administer those services. An alliance shall demonstrate the technical and physical capacity to serve a significant population over a wide territory, and to provide service quality throughout the entire alliance service area;(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.B. Grounds for Denial, Nonrenewal, Suspension, or Revocation of License. In addition to any other grounds specified by law, the following may constitute grounds for denial of an application or nonrenewal, suspension, or revocation of an existing license, following notice and an opportunity for hearing: (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.C. Renewal and Reporting Requirements (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;(a) The annual report shall be submitted by March 1 for the preceding calendar year and shall be accompanied by an audited financial statement and a license renewal fee of $100. The report shall include:(i) An accounting of all revenues received by the alliance;(ii) Internal and independent audits;(iii) Enrollment data showing, by carrier, the number of individuals and, for each employer risk pool, the number of employers and the number of employees;(iv) Enrollment data by age and gender;(v) Results of enrollee satisfaction surveys if any;(vi) Reports of any legal actions taken by or against the alliance.(vii) The progress achieved in assuring affordable health care coverage to individual members and employees of member employers; and(viii) The need, if any, for financial incentives or other mechanisms to increase participation in the alliance.(b) The quarterly financial statements shall be submitted within 60 days of the end of each calendar quarter.(2) Material changes in the business plan are subject to approval by the Superintendent before implementation by the alliance.02-031 C.M.R. ch. 840, § 5