2023 Delaware Code › Title 18 - Insurance Code › Chapter 76. DISCOUNT MEDICAL PLANS › § 7603. Licensing requirements.

§ 7603. Licensing requirements.
(a) Before doing business in this State as a discount medical plan organization, a person shall obtain a license from the Commissioner to operate as a discount medical plan organization.
(b) Each application for a license to operate as a discount medical plan organization:
(1) Shall be in a form prescribed by the Commissioner and verified by an officer or authorized representative of the applicant; and
(2) Shall demonstrate, set forth or be accompanied by the following, if applicable:
a. The applicable fees required under Chapter 7 of this title;
b. A copy of the organization documents of the applicant, such as the articles of incorporation, including all amendments;
c. A copy of the applicant's bylaws or other enabling documents that establish organizational structure;
d. The applicant's federal identification number, business address and mailing address;
e. 1. A list of names, addresses, official positions and biographical information of the individuals who are responsible for conducting the applicant's affairs, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, the officers, contracted management company personnel and any person or entity owning or having the right to acquire 10% or more of the voting securities of the applicant; and
2. A disclosure of the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the discount medical plan organization, including any possible conflicts of interest;
f. A complete biographical statement, on forms prescribed by the Commissioner, with respect to each individual identified under paragraph (b)(2)e. of this section;
g. A statement generally describing the applicant, its facilities and personnel and the medical or ancillary services for which a discount will be made available under the discount medical plan;
h. A copy of the form of all contracts made or to be made between the applicant and any providers or provider networks regarding the provision of medical or ancillary services to members;
i. A copy of the form of any contract made or arrangement to be made between the applicant and any individual listed in paragraph (b)(2)e. of this section;
j. A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership or other entity for the performance on the applicant's behalf of any function, including marketing, administration, enrollment, investment management and subcontracting for the provision of medical or ancillary services to members;
k. A description of the proposed methods of marketing, including, but not limited to, describing the use of marketers, use of the Internet, sales by telephone, and use of salespersons to market the discount medical plan benefits;
l. A description of the member complaint procedures to be established and maintained by the applicant;
m. The name and address of the applicant's Delaware statutory agent for service of process, notice or demand, or if not domiciled in this State, a power of attorney duly executed by the applicant, appointing the Commissioner and duly authorized deputies, as the true and lawful attorney of the applicant in and for this State upon whom all process in any legal action or proceeding against the discount medical plan organization on a cause of action arising in this State may be served; and
n. Any other information the Commissioner may reasonably require.
(c) Within 90 days after the date of receipt of a completed application, the Commissioner shall:
(1) Issue a license if the Commissioner is satisfied that the applicant has met the following:
a. The requirements of subsection (b) of this section have been met;
b. The ownership, control and management of the applicant are competent and trustworthy and possess managerial experience that would make the proposed operation of the discount medical plan organization beneficial to discount medical plan members; or
(2) Disapprove the application and state the grounds for disapproval.
(d) Prior to licensure by the Commissioner, each discount medical plan organization shall establish an Internet website in order to conform to the requirements of § 7608(e) of this title.
(e) (1) A license is effective for 1 year, unless prior to its expiration the license is renewed in accordance with this subsection or suspended or revoked in accordance with subsection (f) of this section.
(2) At least 90 days before a license expires, the discount medical plan organization shall submit:
a. A renewal application form; and
b. The renewal fee.
(3) The Commissioner shall renew the license of each holder that meets the requirements of this chapter and pays the appropriate renewal fee required by Chapter 7 of this title.
(f) (1) The Commissioner may suspend the authority of a discount medical plan organization to enroll new members or refuse to renew or revoke a discount medical plan organization's license if the Commissioner finds that any of the following conditions exist:
a. The discount medical plan organization is not operating in compliance with this chapter;
b. The discount medical plan organization has advertised, merchandised or attempted to merchandise its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading or unfair practices with respect to advertising or merchandising;
c. The discount medical plan organization is not fulfilling its obligations as a discount medical plan organization; or
d. The continued operation of the discount medical plan organization would be harmful to its members or contrary to their interests.
(2) If the Commissioner has cause to believe that grounds for the nonrenewal, suspension or revocation of a license exists, the Commissioner shall notify the discount medical plan organization in writing specifically stating the grounds for the refusal to renew or suspension or revocation and may pursue a hearing on the matter in accordance with the provisions of Chapter 101 of Title 29.
(3) When the license of a discount medical plan organization is non-renewed, surrendered or revoked, the discount medical plan organization shall proceed, immediately following the effective date of the order of revocation or, in the case of a nonrenewal, the date of expiration of the license, to wind up its affairs transacted under the license. The discount medical plan organization shall not engage in any further advertising, solicitation, collecting of fees or renewal of contracts.
(4) a. The Commissioner shall, in the Commissioner's order suspending the authority of the discount medical plan organization to enroll new members, specify the period during which the suspension is to be in effect and the conditions, if any, that must be met by the discount medical plan organization prior to reinstatement of its license to enroll members.
b. The Commissioner may rescind or modify the order of suspension prior to the expiration of the suspension period.
c. The license of a discount medical plan organization shall not be reinstated unless requested by the discount medical plan organization. The Commissioner shall not grant the request for reinstatement if the Commissioner finds that the circumstances for which the suspension occurred still exist or are likely to recur.
(g) In lieu of suspending or revoking a discount medical plan organization's license under subsection (f) of this section, whenever the discount medical plan organization has been found to have violated any provision of this chapter, the Commissioner may:
(1) Issue and cause to be served upon the organization charged with the violation a copy of the findings and an order requiring the organization to cease and desist from engaging in the act or practice that constitutes the violation; and
(2) Impose any penalties consistent with § 7613 of this title.
(h) Each licensed discount medical plan organization shall notify the Commissioner immediately whenever the discount medical plan organization's license, or other form of authority, to operate as a discount medical plan organization in another state is suspended, revoked or non-renewed in that state.
(i) A provider who provides discounts to that provider's own patients without any cost or fee of any kind to the patient is not required to obtain and maintain a license under this chapter as a discount medical plan organization.
77 Del. Laws, c. 470, §  1;  70 Del. Laws, c. 186, §  1;