§ 58-50A-70. Qualifications for licensure.
(a) To meet the requirements for issuance of a license under this Article and to maintain that license, a MEWA must meet all of the following criteria:
(1) The MEWA is a nonprofit organization or administered by a nonprofit organization.
(2) One of the following applies to the MEWA:
a. The MEWA is established or administered by a trade association, industry association, or professional association of employers or professionals that meets all of the following criteria:
1. The association has a constitution or bylaws.
2. The association was organized and has been maintained in good faith for a continuous period of three years for purposes other than that of obtaining or providing insurance.
b. Repealed by Session Laws 2024-57, s. 3G.1(b), effective January 1, 2025, and applicable to licenses issued under Article 50A of Chapter 58 of the General Statutes on or after that date.
c. The MEWA is established or administered by a statewide chamber of commerce or a statewide business league that meets all of the following criteria:
1. The chamber of commerce or business league has a constitution or bylaws.
2. The chamber of commerce or business league was organized and has been maintained in good faith for a continuous period of five years for purposes other than that of obtaining or providing insurance.
3. The chamber of commerce or business league is exempt from taxation by the Internal Revenue Service under section 501(c)(6) of the Internal Revenue Code.
(3) The MEWA is operated pursuant to a trust agreement by a board of trustees that has complete fiscal control over the MEWA and that is responsible for all operations of the MEWA. Except as provided in this subdivision, the trustees are required to be owners, partners, officers, directors, or employees of one or more employers participating in the MEWA. With the Commissioner's approval, an individual who is not an owner, partner, officer, director, or employee of one or more employers participating in the MEWA may serve as a trustee if that individual possesses the expertise required for the service as a trustee. A trustee shall not be an owner, officer, or employee of the administrator or service company of the MEWA. The trustees have the authority to approve applications of members for participation in the MEWA and to contract with an authorized administrator or service company to administer the operations of the MEWA.
(4) Coverage under the MEWA is not offered or advertised to the public generally.
(5) Operation of the MEWA is conducted in accordance with sound actuarial principles.
(b) Each insured shall be issued a policy, contract, certificate, summary plan description, or other evidence of the benefits and coverages provided under the MEWA plan. The evidence of benefits and coverages provided shall contain, in boldface print in a conspicuous location, the following statement: "THE BENEFITS AND COVERAGES DESCRIBED HEREIN ARE PROVIDED THROUGH A TRUST FUND ESTABLISHED BY A [name of MEWA]. EXCESS INSURANCE IS PROVIDED BY A LICENSED INSURANCE COMPANY TO COVER HIGH AMOUNT MEDICAL CLAIMS. THE TRUST FUND IS NOT SUBJECT TO ANY INSURANCE GUARANTY ASSOCIATION, ALTHOUGH THE TRUST FUND IS MONITORED BY THE NORTH CAROLINA DEPARTMENT OF INSURANCE. OTHER RELATED FINANCIAL INFORMATION IS AVAILABLE FROM YOUR EMPLOYER OR FROM THE [name of MEWA]." If applicable, the same documents shall contain, in boldface print in a conspicuous location, the following statement: "PARTICIPATING EMPLOYERS WILL BE RESPONSIBLE FOR FUNDING ALL CLAIMS INCURRED BY EMPLOYEES COVERED UNDER THE TRUST." Any statement required by this subsection is not required on identification cards issued to insureds.
(c) Each MEWA shall maintain excess insurance written by an insurer authorized to do business in this State with a retention level determined in accordance with sound actuarial principles. The excess insurance contracts must be filed with the Commissioner and contain notification provisions requiring at least 60 days' notice to the Commissioner from the insurer issuing the coverage prior to the termination or modification of the excess insurance coverage. The Commissioner may adopt rules prescribing the net retentions levels for MEWAs in accordance with the number of risks insured.
(d) Each MEWA shall establish and maintain appropriate loss reserves determined in accordance with sound actuarial principles.
(e) The Commissioner shall not grant or continue a license under this Article if the Commissioner makes any of the following determinations:
(1) A trustee, manager, or administrator of a MEWA is incompetent, untrustworthy, or so lacking in insurance expertise as to make the operations of the MEWA hazardous to the potential and existing insureds.
(2) A trustee, manager, or administrator of a MEWA has been found guilty of or has pled guilty or no contest to a felony, a crime involving moral turpitude, or a crime punishable by imprisonment of one year or more under the law of any state or country, whether or not a judgment or conviction has been entered.
(3) A trustee, manager, or administrator of a MEWA has had any type of insurance license revoked in this or any other state.
(4) To the detriment of the employers participating in the MEWA, insureds, creditors, or the public, the operations of the MEWA are characterized by the improper manipulation of assets, accounts, or excess insurance or by bad faith.
(f) All contracts between a MEWA and an administrator or service company shall be filed with the Commissioner. Any changes to these contracts shall be filed with the Commissioner in advance of their implementation.
(g) Failure to maintain compliance with the eligibility requirements established by this section is a ground for denial, suspension, or revocation of the license under this Article. (1991, c. 611, s. 1; 2019-202, ss. 2(c), 3(b); 2024-57, s. 3G.1(b).)
