Deficit and assessments

1. Each current member of a multiple employer welfare arrangement is jointly and severally liable for all liabilities and expenses of the multiple employer welfare arrangement. Each past member is jointly and severally liable for all liabilities and expenses of the multiple employer welfare arrangement for three complete fund years after leaving the multiple employer welfare arrangement. After the period of continuing liability, a past member is no longer jointly and severally liable for the multiple employer welfare arrangement's liabilities and expenses, except as provided in subsection 2. 2. Runoff liability. If a multiple employer welfare arrangement's self-funding authority is ended under subsection 1 or 2 of section 45-06-14-07, members and past members continue to be jointly and severally liable for the multiple employer welfare arrangement's liabilities and expenses until final multiple employer welfare arrangements dissolution, as follows: a. All members at the termination of self-funding authority are jointly and severally liable for all multiple employer welfare arrangement liabilities and expenses until the multiple employer welfare arrangement is dissolved; and b. All past members that were jointly and severally liable under subsection 1 at the time self-funding authority is ended continue to be jointly and severally liable until the multiple employer welfare arrangement is dissolved. 3. Deficits. If at any time a multiple employer welfare arrangement's total liabilities exceed its total assets, the board must restore a positive surplus and must do so within ninety days. A deficit may be corrected using one or more of the types of assessments set forth below. A multiple employer welfare arrangement may elect to assess some but not all jointly and severally liable members and past members. The method of assessment may not arbitrarily exclude members or past members, or impose arbitrary amounts in relation to the amounts imposed on other members and past members. The bylaws may identify methods of assessment. If the board fails to do so when required, the commissioner must order an assessment to correct a deficit using the procedure described in subdivision a. a. All jointly and severally liable members and past members may be assessed proportionately to their share of the total premiums paid and owed during the assessment base period. The assessment base period at the time of a multiple employer welfare arrangement's self-funding authority ending under subsection 1 or 2 of section 45-06-14-07 is the basis of assessments until final multiple employer welfare arrangement dissolution. The assessment base period includes all completed quarters of the current fund year and the most recent three complete fund years. b. Jointly and severally liable members and past members may be assessed, whereby members and past members are assessed in proportion to the member's loss experience over the assessment base period if provided for in the bylaws. c. Jointly and severally liable members and past members may be assessed, whereby current members pay more than past members if provided for in the bylaws. d. Jointly and severally liable members and past members may be assessed whereby members belonging to the multiple employer welfare arrangement in poor loss years are assessed more than members belonging to the multiple employer welfare arrangement in better loss years if provided for in the bylaws. e. Jointly and severally liable members and past members may be assessed according to any formula stated in the bylaws, including combinations of subdivisions a to d, if the formula is consistent with the provisions of this section. 4. Assessment to increase surplus. The board may assess current members in order to increase the surplus. The assessment may be made at any time in the discretion of the board to improve the multiple employer welfare arrangement's financial strength. The assessment may be calculated using any reasonable procedure consistent with the multiple employer welfare arrangement's bylaws.