No prepaid health plan shall contract with any subcontractor other than the plan’s subsidiary corporation, its parent corporation, or another subsidiary of its parent corporation, or an affiliate of the prepaid health plan whose financial statements are consolidated with that of the prepaid health plan at the time of the annual audit by the independent auditors of the plan and when the quarterly and annual financial statements are filed with the Director of the Department of Managed Health Care, if any of the following persons connected with the plan have a substantial financial interest, as defined by Section 14478, in such subcontractor:

(a) Any person also having a substantial financial interest in the plan.

Terms Used In California Welfare and Institutions Code 14482

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • immediate family: means an individual's spouse and minor dependent children and any other person over which the individual has legal control. See California Welfare and Institutions Code 14478
  • substantial financial interest: means the ownership of common stock, preferred stock, warrants, options, loans, partnership interests, debt instruments, or other ownership interest, if consisting of, or convertible to, equity investments in an entity contracting with the department under the provisions of this chapter or an entity contracting with a current or proposed contractor doing business with the department under the provisions of this chapter, and such ownership interest in terms of fair market value is not less than the greater of the following:

    California Welfare and Institutions Code 14478

  • Trustee: A person or institution holding and administering property in trust.

(b) Any director, officer, partner, trustee, or employee of the plan.

(c) Any member of the immediate family of any person designated in (a) or (b).

(Amended by Stats. 2000, Ch. 857, Sec. 97. Effective January 1, 2001.)

  Previous section
Next section  
 Article 6 Contents