20-1015

20-1015. Suspension or revocation of
certificate of authority; civil penalties

A. The director may suspend or revoke any certificate of authority issued to a
prepaid dental plan organization pursuant to this article if the director finds that any
of the following conditions exists:

1. The prepaid dental plan organization is operating significantly in contravention
of its basic organizational documents or in a manner contrary to that described in, and
reasonably inferred from, any other information submitted pursuant to section 20-1003.

2. The prepaid dental plan organization issued membership coverage that does not
comply with the requirements of section 20-1007.

3. The prepaid dental plan does not provide or arrange for basic dental services
appropriate to such plan as determined by the director.

4. The prepaid dental plan organization can no longer be expected to meet its
obligations to members or prospective members.

5. The prepaid dental plan organization, or any authorized person on its behalf,
has advertised or merchandised its services in a materially untrue, misleading, deceptive
or unfair manner.

6. The prepaid dental plan organization has failed to substantially comply with
this article or any rules adopted pursuant to this article.

7. The prepaid dental plan organization is in an unsound condition or in such a
condition as to render its further transaction of business in this state hazardous to its
members or to the residents of this state.

B. If the certificate of authority of a prepaid dental plan organization is
suspended, the organization shall not accept, during the period of the suspension, any
additional members except newborn children or other newly acquired dependents of existing
members and shall not engage in any advertising or solicitation.

C. If the certificate of authority of a prepaid dental plan organization is
revoked, the organization shall proceed, immediately following the effective date of the
order of revocation, to conclude its affairs and shall conduct no further business except
as may be essential to the orderly conclusion of solicitation. The director, by written
order, may permit such further operation of the organization as the director finds to be
in the best interest of members to the end that members shall be afforded the greatest
practical opportunity to obtain continuing prepaid dental plan coverage.

D. Notwithstanding subsections B and C of this section, a prepaid dental plan
organization that has had its certificate of authority denied, suspended or revoked, or
that is subject to an adverse action by the director, is entitled to a hearing pursuant
to title 41, chapter 6, article 10 and, except as provided in section 41-1092.08,
subsection H, is entitled to judicial review pursuant to title 12, chapter 7, article 6.

E. If, after a hearing, the director finds grounds pursuant to subsection A of this
section to suspend or revoke an organization's certificate of authority, the director may
impose, in lieu of or in addition to that suspension or revocation, the following civil
penalties that shall be remitted to the state treasurer for deposit, pursuant to sections
35-146 and 35-147, in the state general fund:

1. For an unintentional violation, not more than one thousand dollars for each
violation and not more than an aggregate of ten thousand dollars in any six month period.

2. For an intentional violation, not more than five thousand dollars for each
violation and not more than an aggregate of fifty thousand dollars in any six month
period.