Section 500.822. Maintenance of excess loss insurance policies with specific retention amount; maintenance of aggregate excess loss insurance; expiration dates of multiple excess loss insurance policies.

All of the following requirements are applicable to a MEWA which seeks authorization in this state or which has authorization to  operate in this state:

(a)   A MEWA shall submit, for approval by the commissioner, a policy or policies of specific excess loss insurance, as required by section 7011(c) of the code.

(b)  Except as provided in subdivision (c) of this rule, a MEWA shall demonstrate to the commissioner  that   the   proposed    specific   retention amount would not be detrimental to the

solvency and stability  of  the  MEWA, considering the plan's  past  and  expected  experience, size,  reserves, contribution rates, and proposed excess rates.

(c)    A MEWA which submits a policy for excess loss insurance  with   a specific retention level of not more than $25,000.00 shall not be required to meet the requirements set forth in subdivision (b) of this rule.

(d)  A MEWA shall not change the retention level for a  specific  excess policy without the prior written approval of the insurance  commissioner.

(e)   A MEWA shall not be required to purchase an aggregate   excess  loss policy unless the commissioner determines that coverage is necessary. The determination shall be based upon the financial solvency and stability of the MEWA, considering the plan's past and expected experience,  size, reserves, expenses, and  contribution   rates.  An  aggregate  excess loss policy purchased by a MEWA shall provide for the insurer to assume  all liability in excess of an annual aggregate attachment point.

(f)   If more than 1  excess  loss  insurance   policy  is  obtained  in fulfillment of the excess loss requirements, the  policy  expiration   dates shall be the same.

History: 1990 AACS.