§ 4513. Permit to engage in business; foreign corporations

(a) At least three-fourths of the board of directors of a corporation organized under this chapter shall be composed of subscribers and members of the public. The remainder may be providers. The subscriber members of the board shall comprise at least a majority of the board. A corporation organized under this chapter shall provide for the election of its board of directors at a publicly announced meeting. As used in this section, “provider” means any person who is a provider of hospital or medical services, or who is an employee, director, trustee, or representative of a provider of such services.

(b) A hospital service corporation shall not enter into a contract with a subscriber until it has obtained from the Commissioner of Financial Regulation a permit so to do. A permit may be issued by the Commissioner upon the receipt of an application in form to be prescribed by the Commissioner. The application shall include a statement of the territory in which the corporation proposes to seek subscribers, the service to be rendered by it, and the rates to be charged for the service. The application shall also include a statement of the number of subscribers for hospital service. Before issuing the permit, the Commissioner may make such examination or investigation as the Commissioner deems necessary. The Commissioner may refuse the permit if the Commissioner finds that the rates submitted are excessive, inadequate, or unfairly discriminatory. A hospital service corporation organized under the laws of another state or country shall not be licensed to do business in this State except as provided by section 4520 of this title.

(c) In connection with a rate decision, the Green Mountain Care Board may also make reasonable supplemental orders to the corporation and may attach reasonable conditions and limitations to such orders as the Board finds, on the basis of competent and substantial evidence, necessary to ensure that benefits and services are provided at minimum cost under efficient and economical management of the corporation. The Commissioner and, except as otherwise provided by 18 V.S.A. §§ 9375 and 9376, the Green Mountain Care Board, shall not set the rate of payment or reimbursement made by the corporation to any physician, hospital, or other health care provider.

(d) The Commissioner shall permit rates for a hospital service corporation designed to enable the corporation to accumulate and maintain a reserve fund that shall from time to time during the calendar year be increased in an amount equal to at least two percent of the annual premium income of the corporation until the reserve fund is equal to at least eight percent of the annual premium income of the corporation. However, if the liabilities of the corporation exceed its assets, the Commissioner shall permit the corporation to charge rates that enable the corporation to accumulate a reserve fund at the rate of at least five percent of annual premium income of the corporation until the corporation’s assets equal its liabilities. Nothing in this subsection shall require the Commissioner to permit a corporation to accumulate a reserve fund until the law of the state of incorporation of that corporation is substantially similar to this subsection with respect to the reserve fund. (Amended 1975, No. 69, § 2, eff. April 18, 1975; 1983, No. 166 (Adj. Sess.); 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2013, No. 79, § 5g, eff. Jan. 1, 2014; 2021, No. 105 (Adj. Sess.), § 206, eff. July 1, 2022.)