(a) To meet therequirements for issuance of a license and to maintain a MEWA, a MEWA must be:
(1) Nonprofit;
(2) Established by atrade association, industry association, or professional association ofemployers or professionals that has a constitution or bylaws and that has beenorganized and maintained in good faith for a continuous period of five yearsfor purposes other than that of obtaining or providing insurance;
(3) Operated pursuant toa trust agreement by a board of trustees that has complete fiscal control overthe MEWA and that is responsible for all operations of the MEWA. Except asprovided in this subdivision, the trustees must be owners, partners, officers,directors, or employees of one or more employers in the MEWA. With theCommissioner's approval, a person who is not such an owner, partner, officer,director, or employee may serve as a trustee if that person possesses theexpertise required for such service. A trustee may not be an owner, officer oremployee of the administrator or service company of the MEWA. The trusteeshave the authority to approve applications of association members forparticipation in the MEWA and to contract with an authorized administrator orservice company to administer the operations of the MEWA;
(4) Neither offered noradvertised to the public generally; and
(5) Operated inaccordance with sound actuarial principles.
(b) The MEWA shallissue to each covered employee a policy, contract, certificate, summary plandescription, or other evidence of the benefits and coverages provided. Theevidence of benefits and coverages provided shall contain, in boldface print ina conspicuous location, the following statement: "THE BENEFITS ANDCOVERAGES DESCRIBED HEREIN ARE PROVIDED THROUGH A TRUST FUND ESTABLISHED BY AGROUP OF EMPLOYERS [name of MEWA]. EXCESS INSURANCE IS PROVIDED BY A LICENSEDINSURANCE COMPANY TO COVER HIGH AMOUNT MEDICAL CLAIMS. THE TRUST FUND IS NOTSUBJECT TO ANY INSURANCE GUARANTY ASSOCIATION, ALTHOUGH THE TRUST FUND ISMONITORED BY THE NORTH CAROLINA DEPARTMENT OF INSURANCE. OTHER RELATEDFINANCIAL INFORMATION IS AVAILABLE FROM YOUR EMPLOYER OR FROM THE [name ofMEWA]." If applicable, the same documents shall contain, in boldface printin a conspicuous location, the following statement: "PARTICIPATINGEMPLOYERS WILL BE RESPONSIBLE FOR FUNDING ALL CLAIMS INCURRED BY EMPLOYEESCOVERED UNDER THE TRUST." Any statement required by this subsection isnot required on identification cards issued to covered employees or otherinsureds.
(c) Each MEWA shallmaintain excess insurance written by an insurer authorized to do business inthis State with a retention level determined in accordance with sound actuarialprinciples. Such contracts must be filed with the Commissioner and containnotification provisions requiring at least 60 days' notice to the Commissionerfrom the insurer issuing such coverage prior to the termination or modificationof such coverage. The Commissioner may by rule prescribe net retentions levelsfor MEWAs in accordance with the number of risks insured.
(d) Each MEWA shallestablish and maintain appropriate loss reserves determined in accordance withsound actuarial principles.
(e) The Commissionershall not grant or continue a license to any MEWA if the Commissioner deemsthat any trustee, manager, or administrator is incompetent, untrustworthy, orso lacking in insurance expertise as to make the operations of the MEWAhazardous to the potential and existing insureds; that any trustee, manager, oradministrator has been found guilty of or has pled guilty or no contest to afelony, a crime involving moral turpitude, or a crime punishable byimprisonment of one year or more under the law of any state or country, whetheror not a judgment or conviction has been entered; that any trustee, manager, oradministrator has had any type of insurance license revoked in this or anyother state; or that the business operations of the MEWA are or have beencharacterized, to the detriment of the employers participating in the MEWA, ofpersons receiving benefits from the MEWA, or of creditors or the public, by theimproper manipulation of assets, accounts, or excess insurance or by bad faith.
(f) To qualify for andretain a license, a MEWA shall file all contracts with administrators orservice companies with the Commissioner, and report any changes to suchcontracts to the Commissioner in advance of their implementation.
(g) Failure to maintaincompliance with the eligibility requirements established by this section is aground for denial, suspension, or revocation of the license of a MEWA. (1991,c. 611, s. 1.)
(a) To meet therequirements for issuance of a license and to maintain a MEWA, a MEWA must be:
(1) Nonprofit;
(2) Established by atrade association, industry association, or professional association ofemployers or professionals that has a constitution or bylaws and that has beenorganized and maintained in good faith for a continuous period of five yearsfor purposes other than that of obtaining or providing insurance;
(3) Operated pursuant toa trust agreement by a board of trustees that has complete fiscal control overthe MEWA and that is responsible for all operations of the MEWA. Except asprovided in this subdivision, the trustees must be owners, partners, officers,directors, or employees of one or more employers in the MEWA. With theCommissioner's approval, a person who is not such an owner, partner, officer,director, or employee may serve as a trustee if that person possesses theexpertise required for such service. A trustee may not be an owner, officer oremployee of the administrator or service company of the MEWA. The trusteeshave the authority to approve applications of association members forparticipation in the MEWA and to contract with an authorized administrator orservice company to administer the operations of the MEWA;
(4) Neither offered noradvertised to the public generally; and
(5) Operated inaccordance with sound actuarial principles.
(b) The MEWA shallissue to each covered employee a policy, contract, certificate, summary plandescription, or other evidence of the benefits and coverages provided. Theevidence of benefits and coverages provided shall contain, in boldface print ina conspicuous location, the following statement: "THE BENEFITS ANDCOVERAGES DESCRIBED HEREIN ARE PROVIDED THROUGH A TRUST FUND ESTABLISHED BY AGROUP OF EMPLOYERS [name of MEWA]. EXCESS INSURANCE IS PROVIDED BY A LICENSEDINSURANCE COMPANY TO COVER HIGH AMOUNT MEDICAL CLAIMS. THE TRUST FUND IS NOTSUBJECT TO ANY INSURANCE GUARANTY ASSOCIATION, ALTHOUGH THE TRUST FUND ISMONITORED BY THE NORTH CAROLINA DEPARTMENT OF INSURANCE. OTHER RELATEDFINANCIAL INFORMATION IS AVAILABLE FROM YOUR EMPLOYER OR FROM THE [name ofMEWA]." If applicable, the same documents shall contain, in boldface printin a conspicuous location, the following statement: "PARTICIPATINGEMPLOYERS WILL BE RESPONSIBLE FOR FUNDING ALL CLAIMS INCURRED BY EMPLOYEESCOVERED UNDER THE TRUST." Any statement required by this subsection isnot required on identification cards issued to covered employees or otherinsureds.
(c) Each MEWA shallmaintain excess insurance written by an insurer authorized to do business inthis State with a retention level determined in accordance with sound actuarialprinciples. Such contracts must be filed with the Commissioner and containnotification provisions requiring at least 60 days' notice to the Commissionerfrom the insurer issuing such coverage prior to the termination or modificationof such coverage. The Commissioner may by rule prescribe net retentions levelsfor MEWAs in accordance with the number of risks insured.
(d) Each MEWA shallestablish and maintain appropriate loss reserves determined in accordance withsound actuarial principles.
(e) The Commissionershall not grant or continue a license to any MEWA if the Commissioner deemsthat any trustee, manager, or administrator is incompetent, untrustworthy, orso lacking in insurance expertise as to make the operations of the MEWAhazardous to the potential and existing insureds; that any trustee, manager, oradministrator has been found guilty of or has pled guilty or no contest to afelony, a crime involving moral turpitude, or a crime punishable byimprisonment of one year or more under the law of any state or country, whetheror not a judgment or conviction has been entered; that any trustee, manager, oradministrator has had any type of insurance license revoked in this or anyother state; or that the business operations of the MEWA are or have beencharacterized, to the detriment of the employers participating in the MEWA, ofpersons receiving benefits from the MEWA, or of creditors or the public, by theimproper manipulation of assets, accounts, or excess insurance or by bad faith.
(f) To qualify for andretain a license, a MEWA shall file all contracts with administrators orservice companies with the Commissioner, and report any changes to suchcontracts to the Commissioner in advance of their implementation.
(g) Failure to maintaincompliance with the eligibility requirements established by this section is aground for denial, suspension, or revocation of the license of a MEWA. (1991,c. 611, s. 1.)
(a) To meet therequirements for issuance of a license and to maintain a MEWA, a MEWA must be:
(1) Nonprofit;
(2) Established by atrade association, industry association, or professional association ofemployers or professionals that has a constitution or bylaws and that has beenorganized and maintained in good faith for a continuous period of five yearsfor purposes other than that of obtaining or providing insurance;
(3) Operated pursuant toa trust agreement by a board of trustees that has complete fiscal control overthe MEWA and that is responsible for all operations of the MEWA. Except asprovided in this subdivision, the trustees must be owners, partners, officers,directors, or employees of one or more employers in the MEWA. With theCommissioner's approval, a person who is not such an owner, partner, officer,director, or employee may serve as a trustee if that person possesses theexpertise required for such service. A trustee may not be an owner, officer oremployee of the administrator or service company of the MEWA. The trusteeshave the authority to approve applications of association members forparticipation in the MEWA and to contract with an authorized administrator orservice company to administer the operations of the MEWA;
(4) Neither offered noradvertised to the public generally; and
(5) Operated inaccordance with sound actuarial principles.
(b) The MEWA shallissue to each covered employee a policy, contract, certificate, summary plandescription, or other evidence of the benefits and coverages provided. Theevidence of benefits and coverages provided shall contain, in boldface print ina conspicuous location, the following statement: "THE BENEFITS ANDCOVERAGES DESCRIBED HEREIN ARE PROVIDED THROUGH A TRUST FUND ESTABLISHED BY AGROUP OF EMPLOYERS [name of MEWA]. EXCESS INSURANCE IS PROVIDED BY A LICENSEDINSURANCE COMPANY TO COVER HIGH AMOUNT MEDICAL CLAIMS. THE TRUST FUND IS NOTSUBJECT TO ANY INSURANCE GUARANTY ASSOCIATION, ALTHOUGH THE TRUST FUND ISMONITORED BY THE NORTH CAROLINA DEPARTMENT OF INSURANCE. OTHER RELATEDFINANCIAL INFORMATION IS AVAILABLE FROM YOUR EMPLOYER OR FROM THE [name ofMEWA]." If applicable, the same documents shall contain, in boldface printin a conspicuous location, the following statement: "PARTICIPATINGEMPLOYERS WILL BE RESPONSIBLE FOR FUNDING ALL CLAIMS INCURRED BY EMPLOYEESCOVERED UNDER THE TRUST." Any statement required by this subsection isnot required on identification cards issued to covered employees or otherinsureds.
(c) Each MEWA shallmaintain excess insurance written by an insurer authorized to do business inthis State with a retention level determined in accordance with sound actuarialprinciples. Such contracts must be filed with the Commissioner and containnotification provisions requiring at least 60 days' notice to the Commissionerfrom the insurer issuing such coverage prior to the termination or modificationof such coverage. The Commissioner may by rule prescribe net retentions levelsfor MEWAs in accordance with the number of risks insured.
(d) Each MEWA shallestablish and maintain appropriate loss reserves determined in accordance withsound actuarial principles.
(e) The Commissionershall not grant or continue a license to any MEWA if the Commissioner deemsthat any trustee, manager, or administrator is incompetent, untrustworthy, orso lacking in insurance expertise as to make the operations of the MEWAhazardous to the potential and existing insureds; that any trustee, manager, oradministrator has been found guilty of or has pled guilty or no contest to afelony, a crime involving moral turpitude, or a crime punishable byimprisonment of one year or more under the law of any state or country, whetheror not a judgment or conviction has been entered; that any trustee, manager, oradministrator has had any type of insurance license revoked in this or anyother state; or that the business operations of the MEWA are or have beencharacterized, to the detriment of the employers participating in the MEWA, ofpersons receiving benefits from the MEWA, or of creditors or the public, by theimproper manipulation of assets, accounts, or excess insurance or by bad faith.
(f) To qualify for andretain a license, a MEWA shall file all contracts with administrators orservice companies with the Commissioner, and report any changes to suchcontracts to the Commissioner in advance of their implementation.
(g) Failure to maintaincompliance with the eligibility requirements established by this section is aground for denial, suspension, or revocation of the license of a MEWA. (1991,c. 611, s. 1.)
