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



(1)  Have and
maintain a fiduciary obligation for the program;



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



(3)  Not knowingly
participate in or undertake to conceal an act or omission of a trustee, when
the act or omission is known to be a breach of fiduciary responsibility; or
fail to discharge specific fiduciary responsibilities in a manner that enables
another trustee to commit a breach; or having knowledge of a breach, fail to
take whatever action that is reasonable and appropriate under the circumstances
to remedy the breach;



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



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



(b)  The board of trustees may contract with a
qualified entity to administer the program or to process claims for benefit
payments, or both; provided that the entity shall be appropriately licensed
under chapter 431.  Selection of the entity shall be subject to chapter 103D;
provided that the insurance commissioner shall advise the board of trustees in
selection of the entity.



(c)  In lieu of subsection (b), the board of
trustees may contract with a qualified entity to assume the risk of
underwriting loss under the program at a capitated rate of payment to the
entity.  The entity shall be appropriately licensed under chapter 431 and
adequately capitalized.  Selection of the entity shall be subject to chapter
103D; provided that the state insurance commissioner shall advise the board of
trustees in the selection of the entity.  An entity selected under this
subsection shall perform the functions under subsection (b), in addition to
assuming the risk. [L 2002, c 245, pt of §2]