211 CMR, § 90.05
Membership plan sponsors must present a complete overview of their organization in their plan of operation, including a description of the organizational framework, the qualifications of management and key personnel, the proposed method of operation, and the financial resources of the enterprise. There shall be four sections of the plan of operation devoted to these internal matters. Each section shall contain the information described below plus any additional information that the membership plan sponsor considers relevant.
The first section shall consist of a copy of the articles or organization and bylaws.
The second section shall provide information on the organization's management and personnel. It shall include biographical sketches of the officers and directors, details of any agreements relating to the corporation to which any officer or director is a party, and the officers' salaries and details of their employment status (full-time or part-time), compensation, and employment history of key management personnel and consultants or contractors involved in administration, marketing, enrollment, benefit procedures, grievance procedures, and financial matters. In addition, the section shall list the names and addresses of the organization's legal, accounting, and actuarial representatives. Finally, the section shall describe any financial relationships among any of the persons mentioned in the section.
The third section shall described the proposed method of operation in all the functional areas, including marketing, enrollment, benefit procedures, and grievance procedures. The section shall also contain the outline of a training program and related materials prepared for new members of the organization's board of directors. The program shall be relevant to the duties of a director and shall include information on policy issues relating to legal services plans and the costs of legal service delivery.
The fourth section shall describe the financial resources of the membership plan sponsor and other pertinent financial and contractual information. The section shall include:
The four sections of the plan of operation submitted under 211 CMR 90.05 may not contain any provisions that are unfair or inequitable in the judgment of the Commissioner. The articles of organization and by-laws shall provide that no more than 1/2 of the directors may be participating attorneys and that at least 1/3 of the directors will be subscribers who are not attorneys. For purposes of the preceding sentence, "subscribers" shall also include signatories of group contracts and "attorneys" shall include members of an attorney's immediate family and employees of an attorney.
The plan of operation must demonstrate to the satisfaction of the Commissioner that the membership plan sponsor possesses the ability to assure that promised benefits will be provided. In order to establish this ability, a membership plan sponsor must show, among other things, that it can establish and maintain a surplus of at least $300,000. The Commissioner may reduce the $300,000 minimum requirement if he or she is satisfied that existing contracts with participating attorneys provide a sufficient source of capital through direct capital contribution and by withholding a portion of the attorneys' fees. The Commissioner may also reduce the surplus amount if he or she is satisfied that reinsurance or other arrangements exist which adequately protect the rights of subscribers.
Even the most careful projections cannot guarantee that the panel of participating attorneys will in fact be of sufficient size. The subscribers of insured service legal services plans and membership legal services plans need further protection against an insufficient supply of attorneys. Specifically, a subscriber of an insure d service legal services plan must be permitted to use any nonparticipating attorney so long as the subscriber mails the insurer a written notice before receiving any legal services. In addition, the non-participating attorney must be paid the same benefits as a participating attorney. A subscriber of a membership legal services plan must be allowed to use a non-plan attorney at the membership plan sponsor's expense if the subscriber is unable to find a participating attorney willing and able to handle a non-frivolous matter that is a covered service. The sponsor may deny access to the non-plan attorney if the subscriber's problem does not require prompt attention and a qualified participating attorney will be available within a reasonable time. The sponsor must, however, have an impartial procedure for settling disagreements about the grounds for demanding a non-plan attorney.
Each insurer and membership plan sponsor shall demonstrate to the satisfaction of the Commissioner that the requirements presented above have been met. The plan of operation of insurers shall include the relevant language of the benefit contracts and a description of the manner in which payments to non-participating attorneys will be computed. The plan of operation of membership plan sponsors shall include the relevant language of the benefit contracts, a description of the procedure that will be used for settling disagreements, and the identity of the party selecting the attorney (membership plan sponsor or subscriber).
The plan of operation for insured service legal services plans and membership legal services plans shall also contain a copy of a subscriber satisfaction form and a plan for its distribution. The form must be distributed to all subscribers after they have received a covered legal service. The form must elicit information on the quality of the services received, including the promptness, openness, courteousness, and ability of the participating attorney and his or her clerical and paralegal support personnel. The form shall clearly indicate that the subscriber need not furnish his or her name.
211 CMR, § 90.05