1. I. The application for a purchasing alliance shall include a business plan containing the following information:

   1. (a) A detailed, written plan of operations explaining how the applicant intends to fulfill the purposes and requirements of this chapter;
   2. (b) The specific steps that the alliance will use to increase affordability, efficiency, and fairness of health insurance coverage;
   3. (c) The specific steps that the alliance will use to allow employers and their employees to obtain better value in purchasing health insurance;
   4. (d) The scope of services to be offered and the resources and expertise to be used to implement and administer those services;
   5. (e) A provision requiring that any coverage procured by the alliance shall require that the members of the alliance be notified directly by the insurer of cancellation due to nonpayment of premium;
   6. (f) The personal biographical information and descriptions of the officers of the alliance;
   7. (g) A written statement demonstrating that those involved in the operation of the alliance have the expertise and experience to effectively and professionally represent employers and their eligible employees; and
   8. (h) An affirmative demonstration that financial controls are in place as a condition of licensure.

2. II. In addition to the business plan, each applicant shall file with the commissioner the following information or documents:

   1. (a) A plan that affirmatively demonstrates that the alliance has the technical expertise and capacity to serve a significant group of employers and their eligible employees;
   2. (b) A plan that demonstrates that the alliance has the technical capacity to provide service quality;
   3. (c) The applicant's articles of incorporation, bylaws, or other formation and business operation documents;
   4. (d) 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;
   5. (e) Evidence of security and prudence in the accounting, deposit, collection, handling, and transfer of moneys; and
   6. (f) A description of the service area in which the alliance will be marketing and offering services.
3. III. Material changes in the operations or the business plan shall not take effect without approval from the commissioner.
4. IV. The commissioner shall conduct financial and performance audits or examinations of an alliance on a regular basis. The commissioner shall require audited financial statements from an alliance. The costs of examinations or audits shall be paid by the alliance.

5. V. A purchasing alliance shall submit an annual report no later than April 1 of each year that includes quarterly financial statements that show:

   1. (a) The alliance is operating in a sound financial fashion;
   2. (b) The alliance is not a risk-bearing entity; and
   3. (c) The alliance is utilizing sound financial controls and money management.

Source. 2010, 346:1, eff. July 20, 2010.