(1) The association shall submit to the department a plan of operation and any amendments necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments become effective upon the written approval of the director or his designee or thirty days after submission if the plan of operation and any amendments have not been rejected by the director. If the association fails to submit suitable amendments to the plan, the director or his designee shall, after notice and hearing, adopt and promulgate reasonable amendments necessary or advisable to effectuate the provisions of this chapter. These amendments must continue in force until modified by the director or his designee or superseded by amendments submitted by the association and approved by the director or his designee.
(2) All member insurers shall comply with the plan of operation.
(3) The plan of operation shall, in addition to requirements enumerated elsewhere in this chapter:
(a) establish procedures for handling the assets of the association;
(b) establish the amount and method of reimbursing members of the board of directors under Section 38-29-60;
(c) establish regular places and times for meetings of the board of directors;
(d) establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;
(e) establish the procedure whereby selections for the board of directors must be made and submitted to the department director;
(f) establish any additional procedures for assessments under Section 38-29-80;
(g) contain additional provisions necessary or proper for the execution of the powers and duties of the association;
(h) establish procedures whereby a member of the board of directors may be removed for cause including a case where a member insurer director becomes an impaired or insolvent insurer;
(i) require the board of directors to establish a policy and procedures for addressing conflicts of interest.
(4) The plan of operation may provide that any or all powers and duties of the association, except those under Section 38-29-70(13)(c) and Section 38-29-80, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association, or its equivalent, in two or more states. Such a corporation, association, or organization must be reimbursed for any payments made on behalf of the association and must be paid for its performance of any function of this association. A delegation under this subsection takes effect only with the approval of both the board of directors and the department director or his designee and may be made only to a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter.
HISTORY: Former 1976 Code Section 38-29-90 [1962 Code Section 37-1408; 1971 (57) 351; 1986 Act No. 426, Section 6] recodified as Section 38-21-90 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-17-90 [1962 Code Section 37-570; 1972 (57) 2776] recodified as Section 38-29-90 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 631; 2020 Act No. 121 (S.580), Section 1.A, eff March 24, 2020.
Editor's Note
2020 Act No. 121, Section 1.B, provides as follows:
"[1.]B. The amendments made by this act do not apply to a member insurer that has been placed under an order of rehabilitation or liquidation before July 1, 2020."
Effect of Amendment
2020 Act No. 121, Section 1.A, in (1), in the second sentence, inserted "or thirty days after submission if the plan of operation and any amendments have not been rejected by the director"; in (3), added (h) and (i) and made nonsubstantive changes; and in (4), in the first sentence, substituted "Section 38-29-70(13)(c)" for "Section 38-29-70(11)(c)".