Section 3. There shall be established within the executive office of administration and finance, but not under its jurisdiction, a special unpaid commission, to be known as the group insurance commission, consisting of the commissioner of administration and finance, the commissioner of insurance, and 13 members to be appointed by the governor, 1 of whom shall be a retired state employee, 1 of whom shall be a health economist and at least 3 of whom shall be full-time state employees, 1 shall be a member of the Massachusetts Public Employees Council, #93, AFSCME, Massachusetts State Labor Council, AFL-CIO, 1 shall be a member of the Massachusetts State Employees Association, NAGE, and 1 shall be a member of Local 254, S.E.I.U., 1 of whom shall be a management representative appointed from a list of 3 representatives nominated by the Massachusetts Municipal Association and 1 of whom shall be a labor representative appointed from a list of 3 representatives nominated by the president of the teachers’ union with the greatest amount of active and retired members enrolled in commission health plans. In addition, upon the transfer of 45,000 subscribers from municipal governmental units to the group insurance commission pursuant to section 19 of chapter 32B, there shall be an additional management representative appointed by the governor from a list of 3 representatives nominated by the Massachusetts Municipal Association and an additional labor representative appointed by the governor from a list of 3 representatives of municipal public safety employees nominated by the president of the Massachusetts Chapter of the AFL-CIO. Whenever an organization nominates a list of representatives for appointment by the governor under this section, the organization may nominate additional candidates if the governor declines to appoint any of those originally nominated. Not more than 55 per cent of the appointive members of the commission shall be members of the same political party. No member appointed by the governor shall be an insurance agent, broker, employee or officer of an insurance company. Upon the expiration of the term of office of an appointive member, his successor shall be appointed in like manner for a term of 3 years. The commission shall be provided with suitable offices and may, subject to appropriation, incur expenses and appoint an executive director who shall be the executive and administrative head of the commission and who shall not be subject to chapter 31. The commission may authorize the executive director to appoint such employees as may be necessary to administer this chapter. There shall be paid by the commonwealth to each appointive member of the commission the necessary expenses actually incurred in the discharge of his official duties. The commission shall adopt such reasonable rules and regulations as may be necessary for the administration of this chapter and shall make an annual report to the governor and to the general court which shall include any modifications or amendments made to contracts executed under this chapter. The rules and regulations shall be in such form as to enable employees to understand the benefits available from the insurance program, including the cost thereof.