An HCC that delegates responsibility by contract with a delegated entity, delegated network, or delegated third party, as those terms are defined in Insurance Code §1272.001 through reference to contracts with HMOs, must:(1) submit to the department a monitoring plan setting out how the HCC will ensure that all delegated HCC functions are implemented in a manner consistent with full compliance by the HCC with all regulatory requirements of the department;(2) conduct an on-site or desk audit of the delegated entity, delegated network, or delegated third party no less frequently than annually, or more frequently on indication of material noncompliance, to obtain information necessary to verify compliance with all regulatory requirements of the department. Written documentation of each audit required by this paragraph must be made available to the department on request; and(3) take prompt action to correct any failure by the delegated entity, delegated network, or delegated third party to comply with regulatory requirements of the department relating to any matters delegated by the HCC and necessary to ensure the HCC's compliance with the regulatory requirements.