§ 4701. Legislative findings. (a) Cooperative health risk-sharing
agreements allow public entities to: share, in whole or part, the costs
of self-funding employee health benefit plans; provide municipal
corporations, school districts and other public employers with an
alternative approach to stabilize health claim costs; lower per unit
administration costs; and enhance negotiating power with health
providers by spreading such costs among a larger pool of risks.

(b) Appropriate safeguards are necessary to help keep self-funded
municipal cooperative health benefits plans from exposing municipalities
and their taxpayers to unpredictable and potentially catastrophic
liabilities. Minimum standards regarding benefits and participation can
better assure that self-funded municipal cooperative health benefit
plans will continue to act responsibly and provide coverage for
high-cost conditions and high-cost individuals.

(c) It is the policy of this state to expand the alternatives
available to public employers by permitting the development of municipal
cooperative health benefit plans while, at the same time, establishing
appropriate standards designed to promote fair competition and sound
operation of such plans on an ongoing basis.

(d) It is the legislative intent that the superintendent implement a
workable system of authorization and regulation of municipal cooperative
health benefit plans in this state, in order to assure that such plans
are:

(1) operated on an actuarially sound basis with appropriate financial
and other standards to protect plan participants and their beneficiaries
as well as local taxpayers; and

(2) not unduly disruptive of the regulated insurance market and public
health programs.