1. (1) The commissioner may, consistent with the provisions of the administrative procedure act, chapter 34.05 RCW, initiate proceedings to determine whether a health maintenance organization has:

   1. (a) Operated in a manner that materially violates its organizational documents;
   2. (b) Materially breached its obligation to furnish the health care services specified in its contracts with enrolled participants;
   3. (c) Violated any provision of this chapter, or any rules and regulations promulgated thereunder;
   4. (d) Made any false statement with respect to any report or statement required by this chapter or by the commissioner under this chapter;
   5. (e) Advertised or marketed, or attempted to market, its services in such a manner as to misrepresent its services or capacity for services, or engaged in deceptive, misleading, or unfair practices with respect to advertising or marketing;
   6. (f) Prevented the commissioner from the performance of any duty imposed by this chapter; or
   7. (g) Fraudulently procured or attempted to procure any benefit under this chapter.

2. (2) After providing written notice and an opportunity for a hearing to be scheduled no sooner than ten days following such notice, the commissioner shall make administrative findings and may, as appropriate:

   1. (a) Impose a penalty of not more than ten thousand dollars for each and every unlawful act committed which materially affects the health services offered or furnished;

   2. (b) Issue an administrative order requiring the health maintenance organization to:

      1. (i) Cease or modify inappropriate conduct or practices by it or any of the personnel employed or associated with it;
      2. (ii) Fulfill its contractual obligations;
      3. (iii) Provide a service which has been improperly denied;
      4. (iv) Take steps to provide or arrange for any service which it has agreed to make available; or
      5. (v) Abide by the terms of an arbitration proceeding, if any;

   3. (c) Suspend or revoke the certificate of authority of the health maintenance organization:

      1. (i) If its certificate of authority is suspended, the organization shall not, during the period of such suspension, enroll any additional participants except newborn children or other newly acquired dependents of existing enrolled participants, and shall not engage in any advertising or solicitation whatsoever;
      2. (ii) If its certificate of authority is revoked, the organization shall proceed under the supervision of the commissioner 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 such affairs: PROVIDED, That the commissioner may, by written order, permit such further operation of the organization as it may find to be in the best interest of enrolled participants, to the end that such enrolled participants will be afforded the greatest practical opportunity to obtain continuing health care coverage: PROVIDED, FURTHER, That if the organization is qualified to operate as a health care service contractor under chapter 48.44 RCW, it may continue to operate as such when it obtains the appropriate license.
3. (3) The commissioner may apply to any court for such legal or equitable relief as it deems necessary to effectively carry out the purposes of this chapter, including, but not limited to, an action in any court of competent jurisdiction to enjoin any such acts or practices and to enforce compliance with this chapter or any rule or order hereunder. Upon a proper showing a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. The commissioner may not be required to post a bond.

[ 1975 1st ex.s. c 290 s 14.]