SENATE BILL NO. 442


   March 16, 1999, Introduced by Senator SIKKEMA and referred to 
        the Committee on Health Policy.



        A bill to amend 1956 PA 218, entitled

   "The insurance code of 1956,"

   by amending sections 7011 and 7060 (MCL 500.7011 and 500.7060),

   as added by 1986 PA 121.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 7011.  The commissioner shall not issue a certificate

 2    of authority to a MEWA unless all of the following conditions

 3    have been met:

 4         (a) The commissioner is satisfied that:

 5         (i) The employers in the MEWA are members of an
             association

 6    or group of  5  2 or more businesses  which
              OR ENTITIES THAT are

 7    in the same trade, SERVICE, or industry, including closely

 8    related businesses  which  THAT provide support,
             services, or

 9    supplies primarily to that trade, SERVICE, or industry.




   02944'99                                                 DKH
           
                                   2

 1         (ii) The association or group of employers in the MEWA
             is

 2    engaged in substantial activity for its members other than

 3    sponsorship of an employee welfare benefit plan.

 4         (iii) The association or group of employers in the MEWA
             has

 5    been in existence for a period of not less than 2 years.

 6         (iv) The employee welfare benefit plan of the
             association or

 7    group is controlled and sponsored directly by participating

 8    employers or employee members, or both.

 9         (v) The MEWA has within its own organization adequate
             facil-

10    ities and competent personnel to service the employee benefit

11    plan or has contracted with an authorized third party administra-

12    tor to provide  such  services.  A third party
             administrator con-

13    tracting with a MEWA pursuant to this subparagraph shall deliver

14    a fidelity bond to the MEWA IN AN AMOUNT APPROVED BY THE

15    COMMISSIONER to protect against the misappropriation or misuse of

16    any money handled by the third party administrator.  in an
             amount

17     approved by the commissioner. 

18         (b) The MEWA has applications from not less than  5
              2

19    employers and will provide similar benefits for not less than 200

20    separate participating employees.  The annual gross premiums of

21    or contributions to the plan will be not less than $20,000.00 for

22    a plan that provides only vision benefits, $75,000.00 for a plan

23    that provides only dental benefits, and $200,000.00 for all other

24    plans.

25         (c) The MEWA possesses a written commitment, binder, or

26    policy for excess loss insurance issued by an insurer authorized

27    to do business in this state, in an amount approved by the



   02944'99

                                   3

 1    commissioner.  Such  THE binder or policy shall
             provide not less

 2    than 30 days' notice of cancellation to the commissioner.

 3         (d) The MEWA has established a procedure, to the satisfac-

 4    tion of the commissioner, for handling claims for benefits in the

 5    event of dissolution of the MEWA.

 6         (e) The MEWA has delivered to the commissioner  such
              A

 7    bond, deposit, or security for the protection of subscribers as

 8    the commissioner requires.

 9         Sec. 7060.  A MEWA transacting business in this state

10     shall  IS also  be  subject to
             the following additional sections

11    and chapters of this  code  ACT, as applicable, in
             the same

12    manner as an insurer authorized to transact insurance in this

13    state:

14         (a) Sections 240(1)(c), (d), (h), and (j).

15         (b) Chapter 12.

16         (c) Chapter 20.

17         (d) Chapter 22.

18         (e) Chapter 34.

19         (f) Chapter 36.

20         (g) Chapter 44.

21         (h) Chapter  78  81.















   02944'99          Final page.                            DKH