[§432D-11]  Replacement coverage.  (a) For purposes of this chapter, "discontinuance" means the terminationof the contract between the group contract holder and a health maintenanceorganization due to the insolvency of the health maintenance organization, anddoes not refer to the termination of any agreement between any individualenrollee and the health maintenance organization.

(b)  Any carrier providing replacement coveragewith respect to group hospital, medical, or surgical expense or service benefitswithin a period of sixty days from the date of discontinuance of a prior healthmaintenance organization contract or policy providing such hospital, medical,or surgical expense or service benefits shall immediately cover all enrolleeswho were validly covered under the previous health maintenance organizationcontract or policy at the date of discontinuance and who would otherwise beeligible for coverage under the succeeding carrier's contract, regardless ofany provisions of the contract relating to active employment or hospitalconfinement or pregnancy.

(c)  Except to the extent benefits for thecondition would have been reduced or excluded under the prior carrier'scontract or policy, no provision in a succeeding carrier's contract ofreplacement coverage which would operate to reduce or exclude benefits on thebasis that the condition giving rise to benefits preexisted the effective dateof the succeeding carrier's contract shall be applied with respect to thoseenrollees validly covered under the prior carrier's contract or policy on thedate of discontinuance. [L 1995, c 179, pt of §1]