1. A. Other educational entities may not drop any authority coverages prior to the expiration of carrier contracts. However, should a successor governing body of a participating other educational entity drop participation by refusing continued premium payments, the other educational entity shall be terminated from all coverages by the authority upon 30-day notice and the following penalties shall be incurred.

   1. (1) For risk-related coverages, the other educational entity shall forfeit to the authority any right to any reserves held on its behalf and shall pay to the authority the cost of any losses in excess of premium.
   2. (2) For health and life employee benefits coverages, the other educational entity shall forfeit to the authority any right to any return premiums or reserves it may otherwise be entitled to. It shall pay to the authority any funds the authority has paid for or will pay for incurred claims related to the other educational entity in excess of premiums paid by the other educational entity as well as administrative expenses directly or indirectly related to claim payments including third party administrator costs and a reasonable percentage of the authority administrative costs.

2. B. If the other educational entity ceases to participate in authority coverages prior to expiration of the carrier contracts, it shall, in addition to any other penalties, pay to the authority any sums determined by the authority to be due in order to hold safe and harmless all other members of the authority from any adverse financial impact caused by its failure to participate.

   HISTORY of 6.50.4 NMAC:

   Pre-NMAC History: The material in this Part was derived from that previously filed with the State Records Center under:

   NMPSIA Rule 88-100, Participation Rules and Regulations Rule, 11/04/1988.

   NMPSIA Rule 93-7, Other Educational Entities Participation, 3/22/1993.

   History of Repealed Material:

   6 NMAC 50.4, Other Educational Entities Participation (filed 10/1/1997) repealed 09/01/2014.

   NMAC History:

   6 NMAC 50.4, Other Educational Entities Participation, 10/01/1997.

   6 NMAC 50.4, Other Educational Entities Participation (filed 10/01/1997) was repealed and replaced by 6.50.4 NMAC, Participation In Authority Coverages By Other Educational Entities, effective 09/01/2014.

[6.50.4.10 NMAC - Rp, 6 NMAC 50.4.10, 09/01/2014; A, 12/10/2024]