28 Tex. Admin. Code § 7.1912 - Filings by Multiple Employer Welfare Arrangements; Report of Cash Reserves; Approval by Commissioner; Additional Actuarial Review
(a) Each multiple employer welfare
arrangement (MEWA) transacting business in this state must file annually with
the commissioner statements and reports described as follows:
(1) within 90 days of the end of the MEWA's
fiscal year, financial statements audited by a certified public accountant;
and
(2) within 90 days of the end
of the MEWA's fiscal year, an actuarial opinion prepared and certified by an
actuary who is not an employee of the MEWA, an employee of the MEWA's
employer-members, an affiliate of the MEWA, or an affiliate of the MEWA's
employer-member, or an employee of an affiliate of the MEWA; and who is a
fellow of the Society of Actuaries, a member of the American Academy of
Actuaries, or an enrolled actuary under the Employee Retirement Income Security
Act of 1974 (29 United
States Code §
1241 and §
1242). The actuarial opinion must
include:
(A) a description of the actuarial
soundness of the MEWA, including any recommended actions that the MEWA should
take to improve its actuarial soundness;
(B) the recommended amount of cash reserves
the MEWA should maintain, as follows:
(i) for
all MEWAs, the recommended amount may not be less than the greater of 20% of
the total contributions in the preceding plan year or 20% of the total
estimated contributions for the current plan year; and
(ii) for a MEWA that provides a comprehensive
health benefit plan under Insurance Code §
846.0035, concerning
Applicability of Certain Laws to Associations Providing Health Benefits, the
MEWA must also comply with Insurance Code Chapter 421, concerning Reserves in
General;
(C) a
calculation of cash reserves with proper actuarial regard for known claims,
paid and outstanding, a history of incurred by not reported claims, claims
handling expenses, unearned premium, an estimate for bad debts, a trend factor,
and a margin for error; and
(D) the
recommended level of specific and aggregate stop-loss insurance the MEWA should
maintain.
(b)
The cash reserves required by Insurance Code Chapter 846, concerning Multiple
Employer Welfare Arrangements, and this subchapter must be maintained in cash
or federally guaranteed obligations of less than five-year maturity that have a
fixed or recoverable principal amount or such other investments as the
commissioner has authorized by rule.
(c) The commissioner will review the
statements and reports required by subsection (a) of this section. The
commissioner will automatically renew a MEWA's certificate of authority unless
the commissioner finds that the MEWA does not meet the requirements of
Insurance Code Chapter 846, and this subchapter.
(d) On a finding of good cause, the
commissioner may order an actuarial review of a MEWA in addition to the
actuarial opinion required by Insurance Code §
846.153(a)(2),
concerning Required Filings. The cost of any such additional actuarial review
must be paid by the MEWA.
(e) A
MEWA must file updated information within 30 days when a material change occurs
to information provided in the application for an initial or final certificate
of authority according to the requirements of Insurance Code Chapter 846,
concerning Multiple Employer Welfare Arrangements, and this
subchapter.
Notes
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