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General Laws

Section 6. Nongroup contracts, except contracts providing supplemental coverage to medicare subject to the provisions of chapter one hundred and seventy-six K, issued and rates charged by nonprofit hospital service corporations to its subscribers for hospital care and reimbursement for other health services shall be subject to the provisions of chapter one hundred and seventy-six M, and any regulations promulgated thereunder.

No such contracts shall be approved if the benefits provided therein are unreasonable in relation to the rate charged, nor if the rates are excessive, inadequate or unfairly discriminatory.

The commissioner shall require every such corporation to keep its books, records, statistics, accounts and vouchers in such manner that he or his authorized representatives may readily verify its annual statements and ascertain whether the corporation has complied with the law.

At least once in three years, and whenever he determines it to be prudent, he shall personally, or by his deputy or examiner, visit each non-profit hospital service corporation and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations, whether it has complied with the law, and any other facts relating to its business methods and management, and the equity of its dealings with its subscribers.

A report of examination of any corporation made under this section shall as far as material and relevant be admitted in the discretion of the court in any judicial proceedings brought by or in behalf of the commissioner or any subscriber, non-profit hospital service corporation or other person as evidence tending to prove the facts stated in such report, but nothing in this paragraph shall be construed to require the commissioner to make an examination under this section before bringing such a proceeding.

The commissioner may investigate, in such manner and to such extent as he may deem expedient, any complaint under any subscriber’s contract.

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