1.    There is established a comprehensive health association with participating members.

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2.    All participating members shall maintain their membership in the association, as a condition for writing policies in this state.

3.    Each participating member of the association shall share the losses due to claims and administrative expenses of the association. The difference between the total claims expense of the association and the benefit plan premiums received is the liability of the participating members. Such participating members shall share in the excess costs of the association in an amount equal to the ratio of a participating member’s total annual premium volume for health insurance received from or on behalf of state residents, to the total health insurance premium volume received by all of the participating members as determined by the lead carrier and approved by the board. For determining the liability of participating members, health insurance coverage includes Medicare supplemental health insurance as defined under section 1882(g)(1) of the federal Social Security Act [42 U.S.C. § 1395ss(g)(1)] but does not include federal employees health benefits plans or Medicare part C plans.

4.    Each member’s liability may be determined retroactively and payment of the assessment is due within thirty days after notice of the assessment is given. Failure by a member to tender to the lead carrier on behalf of the association the full amount assessed within thirty days of notification by the lead carrier is grounds for termination of membership.