1.    If, in the judgment of the board of directors, the affairs of the company thereby may be administered suitably and efficiently, the company may enter into a contract, not to exceed five years in duration, whereby the affairs of the company may be administered by a licensed insurer or a licensed nonprofit health service plan, subject to any continuing direction by the board of directors as specified in the articles of incorporation, the bylaws, and the contract.

2.    The basis of compensation to the administering licensed insurer or plan in any contract described in this section must be reimbursement of expenses reasonably allocable to the business of the company plus an appropriate and reasonable additional allowance as specified in the contract. Any additional allowance, if based upon premium volume or size of membership, must contain a reasonable aggregate dollar maximum. The amount of the fee may not be made dependent on the underwriting or investment profits of the company.

3.    Upon the execution of any contract, the company shall promptly file a copy with the commissioner. The contract becomes effective thirty days from the date of the filing unless the commissioner, prior to the effective date, disapproves the contract as illegal,     unduly onerous, or not in the best interest of the company and states the reasons for the findings.