North Dakota Administrative Code
Title 45 - Insurance, Commissioner of
Article 45-06 - Accident and Health Insurance
Chapter 45-06-14 - Multiple Employer Welfare Arrangements
Section 45-06-14-11 - Premiums, cashflow, and dividends

Universal Citation: ND Admin Code ยง 45-06-14-11

Current through Supplement No. 394, October, 2024

1. Minimum annual premium. A multiple employer welfare arrangement must have and maintain an annual premium volume of no less than three hundred thousand dollars. A multiple employer welfare arrangement or prospective multiple employer welfare arrangement may apply to the commissioner for a reduction of the minimum annual premium requirement, stating the amount of reduction and the reasons supporting the request. The commissioner must act on the application within sixty days after receipt. The multiple employer welfare arrangement must demonstrate that the lesser premium volume would not compromise its financial integrity and stability.

2. Monitoring premium volume. A multiple employer welfare arrangement must monitor its premium volume. If annual premium is more than three hundred thousand dollars but less than four hundred thousand dollars, or less than one hundred thirty-three percent of the amount approved pursuant to subsection 1, the multiple employer welfare arrangement must notify the commissioner at monthly intervals of the then-current annualized premium volume, until the annualized volume exceeds four hundred thousand dollars. "Annualized premium volume" means the gross premiums written for the previous twelve months. If premium decreases to an annualized volume of less than three hundred thousand dollars, or a lesser amount if approved pursuant to subsection 1, the multiple employer welfare arrangement must notify the commissioner:

a. Of its intent to end its self-funding authority; or

b. Of its proposal for restoring compliance with subsection 1. If the proposal is unlikely, in the commissioner's judgment, to restore compliance with subsection 1 within ninety days, or if after ninety days the multiple employer welfare arrangement continues to be out of compliance, the commissioner may revoke the multiple employer welfare arrangement's self-funding authority.

3. Surplus or stop-loss advancement. To maintain its financial integrity, a multiple employer welfare arrangement must either:

a. Establish and maintain a surplus consisting of funds contributed by members and the multiple employer welfare arrangement's retained earnings sufficient to pay claims as they occur; or

b. Negotiate a stop-loss insurance policy requiring the insurer to advance funds to the multiple employer welfare arrangement if the multiple employer welfare arrangement's policy limits have been or are likely to be exceeded. The funds may be considered an advance against the insurer's potential liability for the policy period.

4. New multiple employer welfare arrangement deposit premium. As a condition for authorization to self-fund, a prospective multiple employer welfare arrangement must submit evidence that an initial premium payment has been made.

a. The initial premium payment must be no less than ten percent of the combined initial members' first-year premium. If the initial payment is less than one hundred percent of the initial members' first-year premium, the remainder of the initial members' first-year premium must be paid in six or more equal installments at equal intervals throughout the year.

b. A prospective multiple employer welfare arrangement may apply to the commissioner for reduction of the initial premium deposit requirement, stating the payment schedule requested and the reasons supporting the request. The commissioner may approve the applications within sixty days after receipt if the multiple employer welfare arrangement has demonstrated that the proposed payment schedule would not compromise its ability to pay large claims promptly during its first year of operation. The commissioner may consider arrangements the multiple employer welfare arrangement has made under subsection 3 in evaluating the application.

5. Premium payments. A multiple employer welfare arrangement must promptly take appropriate action to collect premiums, assessments, or penalties that are past due. Collection costs are the obligation of the delinquent member.

6. Dividend procedures. A multiple employer welfare arrangement may declare and pay a dividend or distribution from its surplus only if:

a. The dividend will not impair the multiple employer welfare arrangement's surplus; and

b. The multiple employer welfare arrangement does not have an outstanding loan or an outstanding advancement from a stop-loss carrier.

General Authority: NDCC 28-32-02

Law Implemented: NDCC 26.1-01-07.4, 26.1-07.1

Disclaimer: These regulations may not be the most recent version. North Dakota may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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