Validity of noncomplying contracts.

(1) Any health maintenance contract, rider, endorsement, attachment, or addendum otherwise valid which contains any condition or provision not in compliance with the requirements of this part shall not be thereby rendered invalid, but shall be construed and applied in accordance with such conditions and provisions as would have applied had such contract, rider, endorsement, attachment, or addendum been in full compliance with this part. In the event an organization issues or delivers any contract for an amount which exceeds any limitations otherwise provided in this part, such organization shall be liable to the subscriber or her or his beneficiary for the full amount stated in the contract in addition to any other penalties that may be imposed under this part.

(2) Any health maintenance contract delivered or issued for delivery in this state covering a subscriber, which subscriber, pursuant to the provisions of this part, the organization may not lawfully cover under the contract, shall be cancelable at any time by the organization, any provision of the contract to the contrary notwithstanding; and the organization shall promptly cancel the contract in accordance with the request of the office therefor. No such illegality or cancellation shall be deemed to relieve the organization of any liability incurred by it under the contract while in force or to prohibit the organization from retaining the pro rata earned premium or rate thereon. This provision does not relieve the organization from any penalty otherwise incurred by the organization under this part on account of any such violation.