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20-1005. Deposit requirement; exception

A. A prepaid dental plan organization shall maintain on deposit with the state treasurer through the director's office a surety bond, guaranteeing services under the plan, or cash or securities eligible for investment of capital funds, in the following amounts depending on the number of members entitled to dental care services pursuant to contracts issued by the plan:

      Number of members                                    Deposit
      5,000 or less                                       $ 25,000
      5,001 -  7,500                                        30,000
      7,501 - 10,000                                        50,000
      10,001 - 15,000                                       75,000
      15,001 - 20,000                                      100,000
      20,001 - 25,000                                      125,000
      25,001 - 30,000                                      150,000
      30,001 - 40,000                                      175,000
      40,001 and above                                     200,000
 

B. The deposit prescribed by subsection A shall be held by the state treasurer in trust for the benefit and protection of persons covered by a prepaid dental plan.

C. Any securities within the description of subsection A, with the approval of the director, may be exchanged for similar securities or cash of equal amount. Interest on securities deposited shall be payable to the prepaid dental plan organization depositing such securities.

D. An unpaid final judgment arising upon a membership coverage shall be a lien on the deposit prescribed by subsection A, subject to execution after thirty days from the entry of final judgment. If the deposit is reduced, it shall be replenished within ninety days by the prepaid dental plan organization.

E. Upon liquidation or dissolution of a prepaid dental plan organization and the satisfaction of all its debts and liabilities, any balance remaining of the cash or securities deposit prescribed in subsection A together with any other assets of the prepaid dental plan organization shall be returned by the director to the prepaid dental plan organization.

F. The deposit prescribed by subsection A shall not apply with respect to a prepaid dental plan organization which is funded by the federal, state or a municipal government or any political subdivision or body to the extent and for such period of time that the prepaid dental plan organization can demonstrate to the director the presence of operational commitments from such sources equivalent to such deposit.