EXPLANATION - Matter enclosed in bold-faced brackets
in the above bill
is not enacted and is intended to be omitted in the law.
Matter underlined thus is new matter.
"Medical Malpractice Liability Insurance Purchasing Alliance,"
"purchasing alliance" or "alliance" means a purchasing alliance
established pursuant to this section.
"Member" means a physician who is a member of a medical
malpractice liability insurance purchasing alliance as provided for in this
b. The purchasing alliance, which may be a corporation, shall be
governed by a board of directors, elected by the members of the
purchasing alliance. No person may serve as an officer or director of an
alliance who has a prior record of administrative, civil or criminal
violations within the financial services industry. The directors shall serve
for terms of three years, and shall serve until their successors are elected
and qualified. The directors shall serve without compensation, except for
reimbursement for actual expenses.
c. The board shall adopt by-laws for the operation of the purchasing
alliance, which shall be effective upon ratification by a two-thirds
majority of the members. The by-laws shall include, but not be limited
(1) the establishment of procedures for the organization and
administration of the alliance;
(2) procedures for the qualifications and admission of the members
of the alliance.
The bases for denial of membership shall include, but not be limited
(a) performance of an act or practice that constitutes fraud or
intentional misrepresentation of material fact;
(b) previous denial of membership in the alliance; or
(c) previous expulsion from the alliance;
(3) procedures for the withdrawal of members from the alliance;
(4) procedures for the expulsion of members from the alliance.
The bases for expulsion shall include, but not be limited to:
(a) failure to pay membership or other fees required by the
(b) failure to pay premiums in accordance with the terms of the
medical malpractice liability insurance policy or the terms of the joint
(c) performance of an act or practice that constitutes fraud or
intentional misrepresentation of material fact; and
(5) procedures for the termination of the alliance.
d. In addition to the other powers authorized under this section, a
purchasing alliance shall have the authority to:
(1) set reasonable fees for membership in the alliance that will
finance reasonable and necessary costs incurred in administering the
(2) negotiate premium rates for medical malpractice liability
insurance with insurers on behalf of the members of the alliance;
(3) provide premium collection services for insurance purchased
through the alliance for members; and
(4) contract with third parties for any services necessary to carry out
the powers and duties authorized or required pursuant to this section.
e. A purchasing alliance established pursuant to the provisions of
this section shall not:
(1) assume risk for the cost or provision of medical malpractice