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."