[§346C-4] Fiduciary and other obligations of the board of trustees.  (a)  Theboard of trustees shall:

(1)  Have andmaintain a fiduciary obligation for the program;

(2)  Dischargetheir duties solely in the best interest of the program;

(3)  Not knowinglyparticipate in or undertake to conceal an act or omission of a trustee, whenthe act or omission is known to be a breach of fiduciary responsibility; orfail to discharge specific fiduciary responsibilities in a manner that enablesanother trustee to commit a breach; or having knowledge of a breach, fail totake whatever action that is reasonable and appropriate under the circumstancesto remedy the breach;

(4)  Act with thecare, skill, prudence, and diligence under the circumstances then prevailing,that a prudent trustee, acting in a like capacity and familiar with similarmatters would use in conducting an enterprise of similar character and purpose;and

(5)  Maintainproper books of accounts and records of the administration of the program.

(b)  The board of trustees may contract with aqualified entity to administer the program or to process claims for benefitpayments, or both; provided that the entity shall be appropriately licensedunder chapter 431.  Selection of the entity shall be subject to chapter 103D;provided that the insurance commissioner shall advise the board of trustees inselection of the entity.

(c)  In lieu of subsection (b), the board oftrustees may contract with a qualified entity to assume the risk ofunderwriting loss under the program at a capitated rate of payment to theentity.  The entity shall be appropriately licensed under chapter 431 andadequately capitalized.  Selection of the entity shall be subject to chapter103D; provided that the state insurance commissioner shall advise the board oftrustees in the selection of the entity.  An entity selected under thissubsection shall perform the functions under subsection (b), in addition toassuming the risk. [L 2002, c 245, pt of §2]