Stop-loss insurance

1. Purchase. A multiple employer welfare arrangement may purchase stop-loss insurance to cover a portion of its losses. If a stop-loss insurance policy is terminated or modified causing a violation of subsection 2, or otherwise compromising the multiple employer welfare arrangement's financial integrity, the multiple employer welfare arrangement must notify the commissioner prior to the termination or modification. The multiple employer welfare arrangement must inform the commissioner of corrective action that will be taken to maintain the multiple employer welfare arrangement's financial integrity. 2. Required stop-loss coverage. A multiple employer welfare arrangement may not retain liability on any one incident of more than ten percent of its annual premium volume during the most recent fund year, plus twenty percent of its surplus. A multiple employer welfare arrangement with less than one year's experience must use the multiple employer welfare arrangement's estimated premium volume during the first full fund year. The multiple employer welfare arrangement must purchase stop-loss insurance for liability exposure. The stop-loss carrier must be licensed to do business in North Dakota. 3. Return of liability. Liability transferred to an insurer under subsection 2 may not be directly or indirectly returned to a multiple employer welfare arrangement or a member.