June 15, 2005, Introduced by Reps. Steil, Green, Jones, Caul, Mortimer, Pastor, Booher, Gosselin, Ward, Nofs, Newell, Condino, LaJoy, Stahl, Stakoe, Vander Veen, Palmer, Hansen, Moolenaar, Pearce and Farhat and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 7011 (MCL 500.7011), as amended by 1999 PA 82.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 7011. The commissioner shall not issue a certificate of
authority to a MEWA unless all of the following conditions have
been met:
(a) The commissioner is satisfied that:
(i) The employers in the MEWA are members of an association or
group of 2 or more businesses or entities that are in the same
trade or industry or same type of service, including closely
related businesses that provide support, services, or supplies
primarily to that trade, service, or industry.
(ii) The association or group of employers in the MEWA is
engaged in substantial activity for its members other than
sponsorship of an employee welfare benefit plan.
(iii) The association or group of employers in the MEWA has been
in existence for a period of not less than 2 years. This
subparagraph does not apply to an association or group of employers
that is composed of all municipal corporations. As used in this
subparagraph, "municipal corporation" means that term as defined in
section 1 of 1951 PA 35, MCL 124.1.
(iv) The employee welfare benefit plan of the association or
group is controlled and sponsored directly by participating
employers or employee members, or both.
(v) The MEWA has within its own organization adequate
facilities and competent personnel to service the employee benefit
plan or has contracted with an authorized third party administrator
to provide services. A third party administrator contracting with a
MEWA pursuant to this subparagraph shall deliver a fidelity bond to
the MEWA in an amount approved by the commissioner to protect
against the misappropriation or misuse of any money handled by the
third party administrator.
(b) The MEWA has applications from not less than 2 employers
and will provide similar benefits for not less than 200 separate
participating employees. The annual gross premiums of or
contributions to the plan will be not less than $20,000.00 for a
plan that provides only vision benefits, $75,000.00 for a plan that
provides only dental benefits, and $200,000.00 for all other plans.
(c) The MEWA possesses a written commitment, binder, or policy
for excess loss insurance issued by an insurer authorized to do
business in this state, in an amount approved by the commissioner.
The binder or policy shall provide not less than 30 days' notice of
cancellation to the commissioner.
(d) The MEWA has established a procedure, to the satisfaction
of the commissioner, for handling claims for benefits in the event
of dissolution of the MEWA.
(e) The MEWA has delivered to the commissioner a bond,
deposit, or security for the protection of subscribers as the
commissioner requires.