Section 21.86.050. Fiduciary responsibility.

   (a) A director, officer, employee, or partner of a health maintenance organization who receives, collects, disburses, or invests money in connection with the activities of that organization is responsible for that money in a fiduciary relationship to the organization.
   (b) A health maintenance organization shall maintain in force a fidelity bond on employees and officers in an amount not less than $100,000 or another amount prescribed by the director. The bond must be written with at least a one-year discovery period and, if written with less than a three-year discovery period, must contain a provision that cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, does not take effect sooner than 90 days after written notice of cancellation or termination has been filed with the director, unless an earlier cancellation or termination date is approved by the director.

Notes

History

(Sec. 1 ch 95 SLA 1990)