A. A prepaid dental plan organization shall maintain on deposit with the state treasurer through the superintendent a surety bond guaranteeing services under the plan, or cash or securities eligible for investments of capital funds of health insurers under Chapter 59A, Article 9 NMSA 1978, in the following amounts depending on the number of members entitled to dental care services pursuant to contracts issued by the plan:

Number of Members

Deposit

2,500 or less

$25,000

2,501 - 5,000

30,000

5,001 - 7,500

40,000

7,501 - 10,000

50,000

10,001 - 15,000

75,000

15,001 - 20,000

100,000

20,001 - 25,000

125,000

25,001 - 30,000

150,000

30,001 - 40,000

175,000

40,001 and above

200,000

B. The deposit prescribed by Subsection A of this section shall be held by the state treasurer in trust for the benefit and protection of persons covered by a prepaid dental plan.

C. Any securities within the description of Subsection A of this section, with the approval of the superintendent may be exchanged for similar securities or cash of equal amount. Interest on securities deposited shall be payable to the prepaid dental plan organization depositing such securities.

D. An unpaid final judgment arising from a membership coverage shall be a lien on the deposit described in Subsection A of this section, subject to execution after thirty days from the entry of final judgment. If the deposit is reduced, it shall be replenished within ninety days by the prepaid dental plan organization.

E. Upon liquidation or dissolution of a prepaid dental plan organization and the satisfaction of all its debts and liabilities, any balance remaining of the cash or securities deposit prescribed in Subsection A of this section, together with any other assets of the prepaid dental plan organization, shall be returned by the superintendent to the prepaid dental plan organization.

F. The deposit prescribed by Subsection A of this section shall not apply with respect to a prepaid dental plan organization which is funded by the federal, state or a municipal government or any political subdivision or body to the extent and for such period of time that the prepaid dental plan organization can demonstrate to the superintendent the presence of operational commitments from such sources equivalent to such deposit.

History: Laws 1984, ch. 127, § 885; 1993, ch. 320, § 104.

The 1993 amendment, effective June 18, 1993, in Subsection A, substituted "Chapter 59A, Article 9 NMSA 1978" for "Article 9 (investments) of the Insurance Code", revised the "Number of Members" table, and made stylistic changes in Subsection D.

Severability. — Laws 1993, ch. 320, § 106 provided for the severability of the act if any part or application thereof was held invalid.