Bond required; lien and payment on bond.
1. Before a certificate of authority may be issued to an organization for dental care:
(a) The officers responsible for operating the organization must file with the Commissioner a collective fidelity bond for $1,000,000; and
(b) The organization must file with the Commissioner a surety bond in the sum of $250,000 or deposit with the Commissioner cash or securities acceptable to the Commissioner in the sum of $250,000,
Êto guarantee the organization’s performance pursuant to this chapter.
2. If the bond is furnished in:
(a) Cash, the Commissioner shall deposit the money in the State Treasury for credit to the Fund for Bonds of Organizations for Dental Care which is hereby created as a trust fund.
(b) Negotiable securities, the principal must be placed without restriction at the disposal of the Commissioner, but any income must inure to the benefit of the organization.
3. The Commissioner may reduce the organization’s bond or deposit:
(a) To $125,000, if the obligations assumed by the organization under the plan can be satisfied for less than $125,000.
(b) To any amount if the organization demonstrates that it has commitments of money from federal, state or municipal governments or their political subdivisions or other comparable resources which are sufficient to ensure the ability of the organization to satisfy its obligations.
4. Any final judgment against the organization which is unpaid is a lien on the bond or deposit and is subject to execution 30 days after entry of the judgment. Any bond or deposit which is reduced by this lien must be increased by the organization to the amount required by this section within 90 days after the judgment is paid.
5. If an organization is dissolved, liquidated or otherwise terminated:
(a) That amount of the bond or deposit which is necessary to satisfy the outstanding obligations of the organization may not be withdrawn for at least 3 years after the certificate of authority has been terminated.
(b) Any balance remaining after money has been withheld to pay the organization’s debts and liens must be paid to the organization by the Commissioner no later than 90 days after the certificate of authority has been terminated.
Last modified: February 27, 2006