Purpose

The Insurance Department has become aware that certain health benefit arrangements have been transacting unauthorized insurance in this state with the assistance and through the professional services of persons licensed by the Department. In many cases these arrangements claim that state insurance laws and regulations applicable to the entity are preempted by the federal Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. Licensees apparently have believed that they can provide professional services to such arrangements under a claimed ERISA preemption. Often, such arrangements are singularly referred to as a multiple employer welfare arrangement ("MEWA"). However, recent advisory opinions from the U.S. Department of Labor have made it clear that the ERISA preemption claims of many of these arrangements are false and that state insurance laws and regulations, including state laws related to the transaction of unauthorized insurance, are fully applicable to many arrangements that have claimed ERISA preemption. The purpose of this regulation is to require licensed agents, brokers, and insurers to submit information to the Insurance Department prior to assisting in any way the transaction of insurance by certain types of multiple employer arrangements identified in this regulation. These reports will help the Department identify unauthorized insurance arrangements so that they can protect themselves from potential liability for assisting in the transaction of unauthorized insurance.