Section 1399.75 Of Article 11. Nonprofit Plans From California Health And Safety Code >> Division 2. >> Chapter 2.2. >> Article 11.
1399.75
. (a) This article shall apply to the restructuring or
conversion of nonprofit mutual benefit health care service plans to
the extent these plans have held or currently hold assets subject to
a charitable trust obligation, as determined by the director.
(b) Nonprofit mutual benefit health care service plans that do not
have, or have only a partial, charitable trust obligation, and that
intend to convert or restructure their activities shall, prior to the
conversion or restructuring, secure approval from the director.
(c) Prior to approving a mutual benefit health care service plan
restructuring or conversion under subdivision (b), the director shall
find that the plan has complied with its noncharitable obligations
including, but not limited to, any obligations set forth in its
articles of incorporation regarding the dedication and distribution
of assets.
(d) The director, in carrying out the department's
responsibilities under subdivision (c), may apply, to the extent
appropriate in each case as determined by the director, the
beneficiary protections authorized in this act, including, but not
limited to, protections concerning the fair market value of assets,
the avoidance of conflicts of interest, and the avoidance of undue
influence or control, with respect to a mutual benefit plan's
proposed disposition of assets.
(e) Nothing in this section shall be construed to limit the
director's, Attorney General's, or a court's authority under existing
law to impose charitable trust obligations upon any or all of the
assets of a mutual benefit corporation or otherwise treat a mutual
benefit corporation in the same manner as a public benefit
corporation.