| (a) Withdrawal plan. An approved PEO that undertakes
of its own initiative or is required by §13.581 or §13.582
of this title (relating to Limitation, Suspension, or Cancellation
of Certificate of Approval in Response to TDLR Action and Limitation,
Suspension, or Cancellation of Certificate of Approval in Response
to TDI Action) to terminate its health benefit plan must file a withdrawal
plan for review by the commissioner prior to terminating the plan.
The withdrawal plan must include:
(1) the approved PEO's reasons for the withdrawal;
(2) a timeline for withdrawal, including the date on
which the approved PEO intends to complete the withdrawal process;
(3) a copy of the proposed notice to be sent to client
employers and plan participants giving them at least 180 days' notice
of the plan's termination;
(4) the number and names of clients and the number
of plan participants affected by the proposed withdrawal;
(5) a procedure for handling plan participants' claims
for benefits;
(6) a procedure for identifying plan participants with
special circumstances, as defined in Insurance Code §1301.153,
concerning Continuity of Care;
(7) provisions for meeting all contractual obligations
of the approved PEO;
(8) provisions for meeting any applicable statutory
obligations; and
(9) verification of reserves to complete a solvent
resolution of the plan's obligations.
(b) Novation and resolution of plan claim obligations.
The commissioner will not grant the request of an approved PEO to
cancel its certificate of approval unless the approved PEO novates
its remaining plan obligations with an unaffiliated authorized insurer
or satisfies its remaining plan obligations under an agreement filed
with and approved in writing by the commissioner. For purposes of
this subsection, those obligations are:
(1) known claims and expenses associated with those
claims; and
(2) incurred but not reported claims and expenses associated
with those claims.
(c) Approval of withdrawal plan. Except as provided
by subsection (d) of this section, the commissioner will approve a
withdrawal plan that satisfies the requirements of subsections (a)
and (b) of this section.
(d) Modification or denial of withdrawal plan. If the
approved PEO is unable to meet its contractual and financial obligations
in a solvent and compliant manner, the commissioner will modify or
deny an approved PEO's filed withdrawal plan, and take action authorized
under Insurance Code Chapters 404, Financial Condition; 406, concerning
Special Deposits Required Under Potentially Hazardous Conditions;
441, concerning Supervision and Conservatorship; 443, concerning the
Insurer Receivership Act; or all other applicable law.
(e) Notice of modification. The commissioner will issue
a written notice to an approved PEO stating the basis for a modification
under subsection (d) of this section. If within 30 days of receiving
a notice of modification the approved PEO submits a written request
for review by the commissioner and submits additional information
that its withdrawal plan satisfies the requirements of subsections
(a) and (b) of this section, the commissioner will reconsider the
modification and give the PEO written notice of his decision.
(f) Notice of denial; State Office of Administrative
Hearings hearing request. The commissioner will issue a written notice
of denial to an approved PEO stating the basis for a denial under
subsection (d) of this section. If within 30 days of receiving the
commissioner's notice the approved PEO submits a written request for
a hearing on denial of withdrawal plan, the commissioner will file
a request to set a hearing at the State Office of Administrative Hearings
under Government Code Chapter 2001, concerning Administrative Procedure;
and Insurance Code Chapter 40, concerning Duties of State Office of
Administrative Hearings and Commissioner in Certain Proceedings; Rate
Setting Proceedings. At the hearing the approved PEO will be given
an opportunity to show compliance with this section.
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