| (a) Annual recalculation. An approved PEO must recalculate
the required amount of its letter of credit every year, not later
than 60 days after negotiating the plan's stop-loss insurance agreement
for the current plan year, using the formula stated in §13.562(b)
of this title (relating to Deposit or Letter of Credit Required).
(b) Changes to letter of credit.
(1) If a letter of credit is not renewed or replaced,
the commissioner must not be prevented from withdrawing the balance
of the letter of credit and placing that sum in trust to secure continuing
obligations until the commissioner has received a renewal letter of
credit or an acceptable substitute.
(2) If a letter of credit is not renewed or replaced,
or if it is suspended, the approved PEO and the issuing qualified
financial institution must give the commissioner immediate notice
of the nonrenewal, replacement, or suspension.
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