By Harris H.B. No. 2006 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the regulation of multiple employer welfare 1-3 arrangements. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 2. Amend Art. 1.14-1 Sec. 2(a) 7. (ii) of the Texas 1-6 Insurance Code as follows: 1-7 "(ii) a multiple employer welfare arrangement (MEWA) which 1-8 is fully insured as defined in 29 U.S.C.A. Section 1144(b)(6) 1-9 except that the Commissioner may apply any law that regulate the 1-10 business of insurance in this state to the extent that such laws 1-11 provide (1) standards requiring maintenance of specified levels of 1-12 contributions, which any such plan, or any trust established under 1-13 such a plan, must meet in order to be considered under such law 1-14 able to pay benefits in full when due, and (2) provisions to 1-15 enforce such standards. A MEWA shall be presumed fully insured for 1-16 purposes of this subparagraph if a group master policy or insurance 1-17 is issued to the MEWA funding the benefits offered by the MEWA by a 1-18 company licensed to act as an insurer in this state and authorized 1-19 to write the line or lines of insurance contained within the group 1-20 master policy of insurance issued to the MEWA and certificates of 1-21 insurance evidencing coverage under the group master policy of 1-22 insurance are issued by the company to the individual participants 1-23 in the MEWA or if the MEWA enters into a reinsurance treaty, 2-1 contract or agreement with a company licensed to act as an insurer 2-2 in this state. The company entering into a reinsurance treaty, 2-3 contract or agreement with a MEWA is required 1) to be rated B+ or 2-4 better by Best's Insurance Reports, 2) to be possessed of at least 2-5 ten million and no/100 dollars ($10,000,000.00) of surplus in 2-6 excess of required statutory capital, 3) to have been authorized to 2-7 act as an insurer by the Texas Department of Insurance in this 2-8 state for at least ten (10) years, 4) to be possessed of assets at 2-9 least equal to reserves necessary to pay claims arising under the 2-10 reinsurance treaty, contract or agreement issued to the MEWA, 5) to 2-11 act as the administrator of claims arising under the benefit plan 2-12 sponsored by the MEWA to which the reinsurance treaty, contract or 2-13 agreement is issued, 6) to pay premium tax in accordance with Art. 2-14 4.11 of this Code on the total monetary consideration received from 2-15 the MEWA by the company for the issuance of the reinsurance treaty, 2-16 contract or agreement, and 7) include a provision in the 2-17 reinsurance treaty, contract or agreement providing that in the 2-18 event the MEWA is unable to fund a portion of any claim retained by 2-19 the MEWA, the company will provide the MEWA the funds necessary to 2-20 pay the portion of the claim retained by the MEWA which is unfunded 2-21 by the MEWA. Further, the MEWA reinsured by a reinsurance treaty, 2-22 contract or agreement issued in accordance with this subparagraph 2-23 may only solicit participation in this state in the benefit plan 2-24 offered by the MEWA through insurance agents licensed in this State 2-25 and appointed to act as an agent in this State by the company 3-1 issuing the reinsurance treaty, contract or agreement to the MEWA. 3-2 A MEWA having a group master policy of insurance issued to it or 3-3 entering into a reinsurance treaty, contract or agreement in 3-4 accordance with this subparagraph shall be considered able to pay 3-5 benefits in full when due."