SECTIONS 1340-1345

1340.  This chapter shall be known and may be cited as theKnox-Keene Health Care Service Plan Act of 1975.1341.  (a) There is in state government, in the Business,Transportation and Housing Agency, a Department of Managed HealthCare that has charge of the execution of the laws of this staterelating to health care service plans and the health care serviceplan business including, but not limited to, those laws directing thedepartment to ensure that health care service plans provideenrollees with access to quality health care services and protect andpromote the interests of enrollees. (b) The chief officer of the Department of Managed Health Care isthe Director of the Department of Managed Health Care. The directorshall be appointed by the Governor and shall hold office at thepleasure of the Governor. The director shall receive an annual salaryas fixed in the Government Code. Within 15 days from the time of thedirector's appointment, the director shall take and subscribe to theconstitutional oath of office and file it in the office of theSecretary of State. (c) The director shall be responsible for the performance of allduties, the exercise of all powers and jurisdiction, and theassumption and discharge of all responsibilities vested by law in thedepartment. The director has and may exercise all powers necessaryor convenient for the administration and enforcement of, among otherlaws, the laws described in subdivision (a).1341.1.  The director shall have his or her principal office in theCity of Sacramento, and may establish branch offices in the City andCounty of San Francisco, in the City of Los Angeles, and in the Cityof San Diego. The director shall from time to time obtain thenecessary furniture, stationery, fuel, light, and other properconveniences for the transaction of the business of the Department ofManaged Health Care.1341.2.  In accordance with the laws governing the state civilservice, the director shall employ and, with the approval of theDepartment of Finance, fix the compensation of such personnel as thedirector needs to discharge properly the duties imposed upon thedirector by law, including, but not limited to, a chief deputy, apublic information officer, a chief enforcement counsel, and legalcounsel to act as the attorney for the director in actions orproceedings brought by or against the director under or pursuant toany provision of any law under the director's jurisdiction, or inwhich the director joins or intervenes as to a matter within thedirector's jurisdiction, as a friend of the court or otherwise, andstenographic reporters to take and transcribe the testimony in anyformal hearing or investigation before the director or before aperson authorized by the director. The personnel of the Department ofManaged Health Care shall perform such duties as the directorassigns to them. Such employees as the director designates by rule ororder shall, within 15 days after their appointments, take andsubscribe to the constitutional oath of office and file it in theoffice of the Secretary of State.1341.3.  The director shall adopt a seal bearing the inscription:"Director, Department of Managed Health Care, State of California."The seal shall be affixed to or imprinted on all orders andcertificates issued by him or her and such other instruments as he orshe directs. All courts shall take judicial notice of this seal.1341.4.  (a) In order to effectively support the Department ofManaged Health Care in the administration of this law, there ishereby established in the State Treasury, the Managed Care Fund. Theadministration of the Department of Managed Health Care shall besupported from the Managed Care Fund. (b) In any fiscal year, the Managed Care Fund shall maintain notmore than a prudent 5 percent reserve unless otherwise determined bythe Department of Finance.1341.45.  (a) There is hereby created in the State Treasury theManaged Care Administrative Fines and Penalties Fund. (b) The fines and administrative penalties collected pursuant tothis chapter, on and after the operative date of this section, shallbe deposited into the Managed Care Administrative Fines and PenaltiesFund. (c) The fines and administrative penalties deposited into theManaged Care Administrative Fines and Penalties Fund shall betransferred by the department, beginning September 1, 2009, andannually thereafter, as follows: (1) The first one million dollars ($1,000,000) shall betransferred to the Medically Underserved Account for Physicianswithin the Health Professions Education Fund and shall, uponappropriation by the Legislature, be used for the purposes of theSteven M. Thompson Physician Corps Loan Repayment Program, asspecified in Article 5 (commencing with Section 128550) or Chapter 5of Part 3 of Division 107 and, notwithstanding Section 128555, shallnot be used to provide funding for the Physician Volunteer Program. (2) Any amount over the first one million dollars ($1,000,000),including accrued interest, in the fund shall be transferred to theMajor Risk Medical Insurance Fund created pursuant to Section 12739of the Insurance Code and shall, upon appropriation by theLegislature, be used for the Major Risk Medical Insurance Program forthe purposes specified in Section 12739.1 of the Insurance Code. (d) Notwithstanding subdivision (b) of Section 1356 and Section1356.1, the fines and administrative penalties authorized pursuant tothis chapter shall not be used to reduce the assessments imposed onhealth care service plans pursuant to Section 1356.1341.5.  (a) The director, as a general rule, shall publish or makeavailable for public inspection any information filed with orobtained by the department, unless the director finds that thisavailability or publication is contrary to law. No provision of thischapter authorizes the director or any of the director's assistants,clerks, or deputies to disclose any information withheld from publicinspection except among themselves or when necessary or appropriatein a proceeding or investigation under this chapter or to otherfederal or state regulatory agencies. No provision of this chaptereither creates or derogates from any privilege that exists at commonlaw or otherwise when documentary or other evidence is sought under asubpoena directed to the director or any of his or her assistants,clerks, or deputies. (b) It is unlawful for the director or any of his or herassistants, clerks, or deputies to use for personal benefit anyinformation that is filed with or obtained by the director and thatis not then generally available to the public.1341.6.  (a) The Attorney General shall render to the directoropinions upon all questions of law, relating to the construction orinterpretation of any law under the director's jurisdiction orarising in the administration thereof, that may be submitted to theAttorney General by the director and upon the director's requestshall act as the attorney for the director in actions and proceedingsbrought by or against the director under or pursuant to anyprovision of any law under the director's jurisdiction. (b) Sections 11041, 11042, and 11043 of the Government Code do notapply to the Director of the Department of Managed Health Care.1341.7.  (a) Neither the director nor any of the director'sassistants, clerks, or deputies shall be interested as a director,officer, shareholder, member other than a member of an organizationformed for religious purposes, partner, agent, or employee of anyperson who, during the period of the official's or employee'sassociation with the Department of Managed Health Care, was licensedor applied for a license as a health care service plan under thischapter. (b) Nothing contained in subdivision (a) shall prohibit theholdings or purchasing of any securities by the director, anassistant, clerk, or deputy in accordance with rules which shall beadopted for the purpose of protecting the public interest andavoiding conflicts of interest. (c) Nothing in this section shall prohibit or preclude thedirector or any of the director's assistants, clerks, or deputies orany employee of the Department of Managed Health Care from obtaininghealth care services as a subscriber or an enrollee from a planlicensed under this chapter, subject to any rules that may be adoptedhereunder or pursuant to proper authority.1341.8.  The director shall have the powers of a head of adepartment pursuant to Chapter 2 (commencing with Section 11150) ofPart 1 of Division 3 of Title 2 of the Government Code. The directormay make the agreements that he or she deems necessary or appropriatein exercising his or her powers.1341.9.  The director and department succeed to, and are vestedwith, all duties, powers, purposes, responsibilities, andjurisdiction of the Commissioner of Corporations and the Departmentof Corporations as they relate to the Department of Corporations'Health Plan Program, health care service plans, and the health careservice plan business, including those powers and duties specified inthis chapter. Nothing in this section abrogates, limits, diminishes,or otherwise restricts the duties, powers, purposes,responsibilities, and jurisdictions of the Commissioner ofCorporations and the Department of Corporations under the InvestmentProgram, the Financial Services Program, and the other laws in whichjurisdiction is vested in the Commissioner of Corporations and theDepartment of Corporations.1341.10.  The department may use the unexpended balance of fundsavailable for use in connection with the performance of the functionsof the Department of Corporations to which the department succeedspursuant to Section 1341.9.1341.11.  All officers and employees of the Department ofCorporations who, on the operative date of this section, areperforming any duty, power, purpose, responsibility, or jurisdictionto which the department succeeds, who are serving in the state civilservice, other than as temporary employees, and engaged in theperformance of a function vested by the department by Section 1341.9,shall be transferred to the department. The status, positions, andrights of those persons shall not be affected by the transfer andshall be retained by those persons as officers and employees of thedepartment, pursuant to the State Civil Service Act (Part 2(commencing with Section 18500) of Division 5 of Title 2 of theGovernment Code), except as to positions exempted from civil service.1341.12.  The department shall have possession and control of allrecords, papers, offices, equipment, supplies, moneys, funds,appropriations, licenses, permits, agreements, contracts, claims,judgments, land, and other property, real or personal, connected withthe administration of, or held for the benefit or use of, theDepartment of Corporations for the performance of the functionstransferred to the department by Section 1341.9.1341.13.  All officers or employees of the department employed afterthe operative date of this section shall be appointed by thedirector.1341.14.  (a) Any regulation, order, or other action, adopted,prescribed, taken, or performed by the Department of Corporations orby an officer of the Department of Corporations in the administrationof a program or the performance of a duty, responsibility, orauthorization transferred to the department by Section 1341.9 shallremain in effect and shall be deemed to be a regulation, order, oraction of the department. (b) No suit, action, or other proceeding lawfully commenced by oragainst the Department of Corporations or any other officer of thestate, in relation to the administration of any program or thedischarge of any duty, responsibility, or authorization transferredto the department by Section 1341.9 shall abate by reason of thetransfer of the program, duty, responsibility, or authorization.1342.  It is the intent and purpose of the Legislature to promotethe delivery and the quality of health and medical care to the peopleof the State of California who enroll in, or subscribe for theservices rendered by, a health care service plan or specializedhealth care service plan by accomplishing all of the following: (a) Ensuring the continued role of the professional as thedeterminer of the patient's health needs which fosters thetraditional relationship of trust and confidence between the patientand the professional. (b) Ensuring that subscribers and enrollees are educated andinformed of the benefits and services available in order to enable arational consumer choice in the marketplace. (c) Prosecuting malefactors who make fraudulent solicitations orwho use deceptive methods, misrepresentations, or practices which areinimical to the general purpose of enabling a rational choice forthe consumer public. (d) Helping to ensure the best possible health care for the publicat the lowest possible cost by transferring the financial risk ofhealth care from patients to providers. (e) Promoting effective representation of the interests ofsubscribers and enrollees. (f) Ensuring the financial stability thereof by means of properregulatory procedures. (g) Ensuring that subscribers and enrollees receive available andaccessible health and medical services rendered in a manner providingcontinuity of care. (h) Ensuring that subscribers and enrollees have their grievancesexpeditiously and thoroughly reviewed by the department.1342.4.  (a) The Department of Managed Health Care and theDepartment of Insurance shall maintain a joint senior level workinggroup to ensure clarity for health care consumers about who enforcestheir patient rights and consistency in the regulations of thesedepartments. (b) The joint working group shall undertake a review andexamination of the Health and Safety Code, the Insurance Code, andthe Welfare and Institutions Code as they apply to the Department ofManaged Health Care and the Department of Insurance to ensureconsistency in consumer protection. (c) The joint working group shall review and examine all of thefollowing processes in each department: (1) Grievance and consumer complaint processes, including, but notlimited to, outreach, standard complaints, including coverage andmedical necessity complaints, independent medical review, andinformation developed for consumer use. (2) The processes used to ensure enforcement of the law,including, but not limited to, the medical survey and audit processin the Health and Safety Code and market conduct exams in theInsurance Code. (3) The processes for regulating the timely payment of claims. (d) The joint working group shall report its findings to theInsurance Commissioner and the Director of the Department of ManagedHealth Care for review and approval. The commissioner and thedirector shall submit the approved final report under signature tothe Legislature by January 1 of every year for five years.1342.5.  The director shall consult with the Insurance Commissionerprior to adopting any regulations applicable to health care serviceplans subject to this chapter and other entities governed by theInsurance Code for the specific purpose of ensuring, to the extentpractical, that there is consistency of regulations applicable tothese plans and entities by the Insurance Commissioner and theDirector of the Department of Managed Health Care.1342.6.  It is the intent of the Legislature to ensure that thecitizens of this state receive high-quality health care coverage inthe most efficient and cost-effective manner possible. In furtheranceof this intent, the Legislature finds and declares that it is in thepublic interest to promote various types of contracts between publicor private payers of health care coverage, and institutional orprofessional providers of health care services. This intent has beendemonstrated by the recent enactment of Chapters 328, 329, and 1594of the Statutes of 1982, authorizing various types of contracts to beentered into between public or private payers of health carecoverage, and institutional or professional providers of health careservices. The Legislature further finds and declares that individualproviders, whether institutional or professional, and individualpurchasers, have not proven to be efficient-sized bargaining unitsfor these contracts, and that the formation of groups andcombinations of institutional and professional providers andcombinations of purchasing groups for the purpose of creatingefficient-sized contracting units represents a meaningful addition tothe health care marketplace. The Legislature further finds anddeclares that negotiations between purchasers or payers of healthservices, and health care service plans governed by the provisions ofthis chapter, or through a person or entity acting for, or on behalfof, a purchaser or payer of health services, or a health careservice plan, are in furtherance of the public's interest inobtaining quality health care services in the most efficient andcost-effective manner possible. It is the intent of the Legislature,therefore, that the formation of groups and combinations of providersand purchasing groups for the purpose of creating efficient-sizedcontracting units be recognized as the creation of a new productwithin the health care marketplace, and be subject, therefore, onlyto those antitrust prohibitions applicable to the conduct of otherpresumptively legitimate enterprises. This section does not change existing antitrust law as it relatesto any agreement or arrangement to exclude from any of theabove-described groups or combinations, any person who is lawfullyqualified to perform the services to be performed by the members ofthe group or combination, where the ground for the exclusion isfailure to possess the same license or certification as is possessedby the members of the group or combination.1342.7.  (a) The Legislature finds that in enacting Sections1367.215, 1367.25, 1367.45, 1367.51, and 1374.72, it did not intendto limit the department's authority to regulate the provision ofmedically necessary prescription drug benefits by a health careservice plan to the extent that the plan provides coverage for thosebenefits. (b) (1) Nothing in this chapter shall preclude a plan from filingrelevant information with the department pursuant to Section 1352 toseek the approval of a copayment, deductible, limitation, orexclusion to a plan's prescription drug benefits. If the departmentapproves an exclusion to a plan's prescription drug benefits, theexclusion shall not be subject to review through the independentmedical review process pursuant to Section 1374.30 on the grounds ofmedical necessity. The department shall retain its role in assessingwhether issues are related to coverage or medical necessity pursuantto paragraph (2) of subdivision (d) of Section 1374.30. (2) A plan seeking approval of a copayment or deductible may filean amendment pursuant to Section 1352.1. A plan seeking approval of alimitation or exclusion shall file a material modification pursuantto subdivision (b) of Section 1352. (c) Nothing in this chapter shall prohibit a plan from charging asubscriber or enrollee a copayment or deductible for a prescriptiondrug benefit or from setting forth by contract, a limitation or anexclusion from, coverage of prescription drug benefits, if thecopayment, deductible, limitation, or exclusion is reported to, andfound unobjectionable by, the director and disclosed to thesubscriber or enrollee pursuant to the provisions of Section 1363. (d) The department in developing standards for the approval of acopayment, deductible, limitation, or exclusion to a plan'sprescription drug benefits, shall consider alternative benefitdesigns, including, but not limited to, the following: (1) Different out-of-pocket costs for consumers, includingcopayments and deductibles. (2) Different limitations, including caps on benefits. (3) Use of exclusions from coverage of prescription drugs to treatvarious conditions, including the effect of the exclusions on theplan's ability to provide basic health care services, the amount ofsubscriber or enrollee premiums, and the amount of out-of-pocketcosts for an enrollee. (4) Different packages negotiated between purchasers and plans. (5) Different tiered pharmacy benefits, including the use ofgeneric prescription drugs. (6) Current and past practices. (e) The department shall develop a regulation outlining thestandards to be used in reviewing a plan's request for approval ofits proposed copayment, deductible, limitation, or exclusion on itsprescription drug benefits. (f) Nothing in subdivision (b) or (c) shall permit a plan to limitprescription drug benefits provided in a manner that is inconsistentwith Sections 1367.215, 1367.25, 1367.45, 1367.51, and 1374.72. (g) Nothing in this section shall be construed to require orauthorize a plan that contracts with the State Department of HealthServices to provide services to Medi-Cal beneficiaries or with theManaged Risk Medical Insurance Board to provide services to enrolleesof the Healthy Families Program to provide coverage for prescriptiondrugs that are not required pursuant to those programs or contracts,or to limit or exclude any prescription drugs that are required bythose programs or contracts. (h) Nothing in this section shall be construed as prohibiting orotherwise affecting a plan contract that does not cover outpatientprescription drugs except for coverage for limited classes ofprescription drugs because they are integral to treatments covered asbasic health care services, including, but not limited to,immunosuppressives, in order to allow for transplants of bodilyorgans. (i) (1) The department shall periodically review its regulationsdeveloped pursuant to this section. (2) On or before July 1, 2004, and annually thereafter, thedepartment shall report to the Legislature on the ongoingimplementation of this section. (j) This section shall become operative on January 2, 2003, andshall only apply to contracts issued, amended, or renewed on or afterthat date.1342.8.  The State Department of Health Services and the departmentshall coordinate, to the extent feasible, audits or surveys ofphysician offices required by this chapter and by the managed careprogram under the Medi-Cal Act (Chapter 7 (commencing with Section14000) of Part 3 of Division 9 of the Welfare and Institutions Code)and for any physician office auditing required by this chapter.1343.  (a) This chapter shall apply to health care service plans andspecialized health care service plan contracts as defined insubdivisions (f) and (o) of Section 1345. (b) The director may by the adoption of rules or the issuance oforders deemed necessary and appropriate, either unconditionally orupon specified terms and conditions or for specified periods, exemptfrom this chapter any class of persons or plan contracts if thedirector finds the action to be in the public interest and notdetrimental to the protection of subscribers, enrollees, or personsregulated under this chapter, and that the regulation of the personsor plan contracts is not essential to the purposes of this chapter. (c) The director, upon request of the Director of Health CareServices, shall exempt from this chapter any county-operated pilotprogram contracting with the State Department of Health Care Servicespursuant to Article 7 (commencing with Section 14490) of Chapter 8of Part 3 of Division 9 of the Welfare and Institutions Code. Thedirector may exempt noncounty-operated pilot programs upon request ofthe Director of Health Care Services. Those exemptions may besubject to conditions the Director of Health Care Services deemsappropriate. (d) Upon the request of the Director of Mental Health, thedirector may exempt from this chapter any mental health plancontractor or any capitated rate contract under Part 2.5 (commencingwith Section 5775) of Division 5 of the Welfare and InstitutionsCode. Those exemptions may be subject to conditions the Director ofMental Health deems appropriate. (e) This chapter shall not apply to: (1) A person organized and operating pursuant to a certificateissued by the Insurance Commissioner unless the entity is directlyproviding the health care service through those entity-owned orcontracting health facilities and providers, in which case thischapter shall apply to the insurer's plan and to the insurer. (2) A plan directly operated by a bona fide public or privateinstitution of higher learning which directly provides health careservices only to its students, faculty, staff, administration, andtheir respective dependents. (3) A person who does all of the following: (A) Promises to provide care for life or for more than one year inreturn for a transfer of consideration from, or on behalf of, aperson 60 years of age or older. (B) Has obtained a written license pursuant to Chapter 2(commencing with Section 1250) or Chapter 3.2 (commencing withSection 1569). (C) Has obtained a certificate of authority from the StateDepartment of Social Services. (4) The Major Risk Medical Insurance Board when engaging inactivities under Chapter 8 (commencing with Section 10700) of Part 2of Division 2 of the Insurance Code, Part 6.3 (commencing withSection 12695) of Division 2 of the Insurance Code, and Part 6.5(commencing with Section 12700) of Division 2 of the Insurance Code. (5) The California Small Group Reinsurance Fund.1343.1.  This chapter shall not apply to any program developed underthe authority of Chapter 8.75 (commencing with Section 14590) ofPart 3 of Division 9 of the Welfare and Institutions Code.1343.5.  In any proceeding under this chapter, the burden of provingan exemption or an exception from a definition is upon the personclaiming it.1344.  (a) The director may from time to time adopt, amend, andrescind any rules, forms, and orders that are necessary to carry outthe provisions of this chapter, including rules governingapplications and reports, and defining any terms, whether or not usedin this chapter, insofar as the definitions are not inconsistentwith the provisions of this chapter. For the purpose of rules andforms, the director may classify persons and matters within thedirector's jurisdiction, and may prescribe different requirements fordifferent classes. The director may waive any requirement of anyrule or form in situations where in the director's discretion thatrequirement is not necessary in the public interest or for theprotection of the public, subscribers, enrollees, or persons or planssubject to this chapter. The director may adopt rules consistentwith federal regulations and statutes to regulate health carecoverage supplementing Medicare. (b) The director may, by regulation, modify the wording of anynotice required by this chapter for purposes of clarity, readability,and accuracy, except that a modification shall not change thesubstantive meaning of the notice. (c) The director may honor requests from interested parties forinterpretive opinions. (d) No provision of this chapter imposing any liability applies toany act done or omitted in good faith in conformity with any rule,form, order, or written interpretive opinion of the director, or anyopinion of the Attorney General, notwithstanding that the rule, form,order, or written interpretive opinion may later be amended orrescinded or be determined by judicial or other authority to beinvalid for any reason.1345.  As used in this chapter: (a) "Advertisement" means any written or printed communication orany communication by means of recorded telephone messages or byradio, television, or similar communications media, published inconnection with the offer or sale of plan contracts. (b) "Basic health care services" means all of the following: (1) Physician services, including consultation and referral. (2) Hospital inpatient services and ambulatory care services. (3) Diagnostic laboratory and diagnostic and therapeuticradiologic services. (4) Home health services. (5) Preventive health services. (6) Emergency health care services, including ambulance andambulance transport services and out-of-area coverage. "Basic healthcare services" includes ambulance and ambulance transport servicesprovided through the "911" emergency response system. (7) Hospice care pursuant to Section 1368.2. (c) "Enrollee" means a person who is enrolled in a plan and who isa recipient of services from the plan. (d) "Evidence of coverage" means any certificate, agreement,contract, brochure, or letter of entitlement issued to a subscriberor enrollee setting forth the coverage to which the subscriber orenrollee is entitled. (e) "Group contract" means a contract which by its terms limitsthe eligibility of subscribers and enrollees to a specified group. (f) "Health care service plan" or "specialized health care serviceplan" means either of the following: (1) Any person who undertakes to arrange for the provision ofhealth care services to subscribers or enrollees, or to pay for or toreimburse any part of the cost for those services, in return for aprepaid or periodic charge paid by or on behalf of the subscribers orenrollees. (2) Any person, whether located within or outside of this state,who solicits or contracts with a subscriber or enrollee in this stateto pay for or reimburse any part of the cost of, or who undertakesto arrange or arranges for, the provision of health care servicesthat are to be provided wholly or in part in a foreign country inreturn for a prepaid or periodic charge paid by or on behalf of thesubscriber or enrollee. (g) "License" means, and "licensed" refers to, a license as a planpursuant to Section 1353. (h) "Out-of-area coverage," for purposes of paragraph (6) ofsubdivision (b), means coverage while an enrollee is anywhere outsidethe service area of the plan, and shall also include coverage forurgently needed services to prevent serious deterioration of anenrollee's health resulting from unforeseen illness or injury forwhich treatment cannot be delayed until the enrollee returns to theplan's service area. (i) "Provider" means any professional person, organization, healthfacility, or other person or institution licensed by the state todeliver or furnish health care services. (j) "Person" means any person, individual, firm, association,organization, partnership, business trust, foundation, labororganization, corporation, limited liability company, public agency,or political subdivision of the state. (k) "Service area" means a geographical area designated by theplan within which a plan shall provide health care services. ( l) "Solicitation" means any presentation or advertisingconducted by, or on behalf of, a plan, where information regardingthe plan, or services offered and charges therefor, is disseminatedfor the purpose of inducing persons to subscribe to, or enroll in,the plan. (m) "Solicitor" means any person who engages in the acts definedin subdivision ( l). (n) "Solicitor firm" means any person, other than a plan, whothrough one or more solicitors engages in the acts defined insubdivision ( l). (o) "Specialized health care service plan contract" means acontract for health care services in a single specialized area ofhealth care, including dental care, for subscribers or enrollees, orwhich pays for or which reimburses any part of the cost for thoseservices, in return for a prepaid or periodic charge paid by or onbehalf of the subscribers or enrollees. (p) "Subscriber" means the person who is responsible for paymentto a plan or whose employment or other status, except for familydependency, is the basis for eligibility for membership in the plan. (q) Unless the context indicates otherwise, "plan" refers tohealth care service plans and specialized health care service plans. (r) "Plan contract" means a contract between a plan and itssubscribers or enrollees or a person contracting on their behalfpursuant to which health care services, including basic health careservices, are furnished; and unless the context otherwise indicatesit includes specialized health care service plan contracts; andunless the context otherwise indicates it includes group contracts. (s) All references in this chapter to financial statements,assets, liabilities, and other accounting items mean those financialstatements and accounting items prepared or determined in accordancewith generally accepted accounting principles, and fairly presentingthe matters which they purport to present, subject to any specificrequirement imposed by this chapter or by the director.