§257. Suspension or revocation of certificate of authority

A. The commissioner may suspend or revoke any certificate of authority issued to a health maintenance organization under this Subpart if he finds that any of the following conditions exist:

(1) The health maintenance organization is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in any information submitted under R.S. 22:244, unless the health maintenance organization filed with the commissioner those modifications as required by R.S. 22:244(D).

(2) The health maintenance organization does not provide or arrange for basic health care services.

(3) The health maintenance organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees.

(4) The health maintenance organization, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive, or unfair manner.

(5) The continued operation of the health maintenance organization would be hazardous to its enrollees.

(6) The health maintenance organization has otherwise failed to substantially comply with this Subpart.

(7) The health maintenance organization has failed to file or to timely file any of the financial statements as required under this Subpart.

(8) The health maintenance organization has failed to comply with any requirements of any provision found under this Subpart.

(9) The health maintenance organization has failed to maintain a statutory deposit as required pursuant to R.S. 22:254.

B. A certificate of authority shall be suspended or revoked only after compliance with the requirements of R.S. 22:259 except in cases where such delay would cause irreparable harm or substantial monetary loss in the opinion of the commissioner. In lieu of suspension or revocation of a license duly issued, the commissioner may levy a fine not to exceed one thousand dollars for each violation and up to one hundred thousand dollars aggregate for all violations in a calendar year. The commissioner of insurance is authorized to suspend the imposition of the fines authorized under this Section.

C. When the certificate of authority of a health maintenance organization is suspended, the health maintenance organization shall not, during the period of such suspension, enroll any additional enrollees, except newborn children or other newly acquired dependents of existing enrollees, and shall not engage in any advertising or solicitation whatsoever.

D. When the certificate of authority of a health maintenance organization is revoked, such organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of such organization. It shall engage in no further advertising or solicitation whatsoever. The commissioner may, by written order, permit such further operation of the organization as he may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practical opportunity to obtain continuing health care coverage without further liability to the enrollee.

E. Where a certificate of authority is revoked or in the liquidation or windup of the affairs of a health maintenance organization, the commissioner shall have the right to enforce, for the benefit of the enrollees, contract performance by any provider or other third party who had contracted with the health maintenance organization.

F. The commissioner is specifically empowered to take over and liquidate the affairs of any health maintenance organization experiencing financial difficulty at such time as he deems it necessary by applying to the Nineteenth Judicial District Court for permission to take over and fix the conditions thereof. The Nineteenth Judicial District Court shall have exclusive jurisdiction over any suit arising from such takeover and liquidation. The commissioner shall be authorized to issue appropriate regulations to implement an orderly procedure to wind up the affairs of any financially troubled health maintenance organization.

G. The commissioner may proceed by summary proceeding and shall not be required to give bond or security.

Acts 1986, No. 1065, §1; Acts 1995, No. 1231, §1, eff. Sept. 1, 1995; Acts 2003, No. 1106, §1, eff. Dec. 31, 2003; Redesignated from R.S. 22:2013 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.

NOTE: Former R.S. 22:247 redesignated as R.S. 22:147 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.