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 45-06-14-15 - Financial integrity

1. Fidelity bond. All contractors and individuals who handle multiple employer welfare arrangement funds or who will have access to multiple employer welfare arrangement funds, including board members, must be covered by a fidelity bond providing standard fidelity coverage, including coverage against dishonesty, theft, forgery, alteration, misplacement, or mysterious and unexplainable disappearance. The amount of coverage for each occurrence must be at least three hundred thousand dollars. The multiple employer welfare arrangement must purchase a fidelity bond covering the required contractors and individuals, or submit separate proof of coverage for all required contractors and individuals not covered under the plan's bond.

2. Integrity of assets. A multiple employer welfare arrangement's assets may not be:

3. Sources and uses of funds. A multiple employer welfare arrangement may expend funds for payment of losses and expenses and for other costs similar to those incurred by insurers under conventional insurance policies in North Dakota. Except as provided in subdivision b of subsection 3 of section 45-06-14-11, a multiple employer welfare arrangement may not borrow money or issue debt instruments. A multiple employer welfare arrangement may bring legal suits to collect delinquent debts. A multiple employer welfare arrangement may not obtain funds through subrogation of the rights of covered persons. A multiple employer welfare arrangement may receive funds only from:

4. Separate accounts. A multiple employer welfare arrangement may establish separate accounts for the payment of claims or certain types of expenses. These accounts must be used only by the service company, its authorized subcontractors, or the financial administrator, as appropriate to the account's purpose. The amount in a special account may not exceed an amount reasonably sufficient to pay the claims or expenses for which it is established.

5. Investments. A multiple employer welfare arrangement's investments are subject to North Dakota Century Code chapter 26.1-05, as regards both permitted and prohibited investments, maturities, and depositories. In addition, a multiple employer welfare arrangement may not invest in securities or debt of a member, or a member's parent, subsidiary, or affiliate, or any person or entity under contract with the multiple employer welfare arrangement.

6. Monitoring financial condition. The board must monitor the multiple employer welfare arrangement's revenues, expenses, and losses and evaluate its current and expected financial condition. The board must maintain the multiple employer welfare arrangement's sound financial condition at all times. The board may adjust premium rates, underwriting standards, dividend rates, expulsion standards, and invoke other powers granted in this chapter and the bylaws. If the commissioner determines that the board's actions are inadequate to maintain the multiple employer welfare arrangement's sound financial condition, the commissioner may order an increase in the premium rates, revoke the multiple employer welfare arrangement's self-funding authority, order that an assessment be levied against the members, or take other appropriate action.