Section 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.