N.M. Admin. Code § 6.50.4.10 - PENALTIES AGAINST OTHER EDUCATIONAL ENTITIES FOR FAILURE TO PARTICIPATE AFTER JOINING THE AUTHORITY
A.
Other educational entities may not drop any authority coverages prior to the
expiration of carrier contracts. However, should a successor governing body of
a participating other educational entity drop participation by refusing
continued premium payments, the other educational entity shall be terminated
from all coverages by the authority upon 30 day notice and the following
penalties shall be incurred.
(1) For
risk-related coverages, the other educational entity shall forfeit to the
authority any right to any reserves held on its behalf and shall pay to the
authority the cost of any losses in excess of premium.
(2) For health and life employee benefits
coverages, the other educational entity shall forfeit to the authority any
right to any return premiums or reserves it may otherwise be entitled to. It
shall pay to the authority any funds the authority has paid for or will pay for
incurred claims related to the other educational entity in excess of premiums
paid by the other educational entity as well as administrative expenses
directly or indirectly related to claim payments including third party
administrator costs and a reasonable percentage of the authority administrative
costs.
B. If the other
educational entity ceases to participate in authority coverages prior to
expiration of the carrier contracts, it shall, in addition to any other
penalties, pay to the authority any sums determined by the authority to be due
in order to hold safe and harmless all other members of the authority from any
adverse financial impact caused by its failure to participate.
Notes
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