APPLICATION FOR INITIAL CERTIFICATE OF AUTHORITY.

(a) A person who wants to establish an employee welfare benefit plan that is a multiple employer welfare arrangement must apply for an initial certificate of authority on an application form prescribed by the commissioner.

(b) The application form must be completed and submitted along with all information required by the commissioner, including:

(1) a copy of each organizational document;

(2) current financial statements of the arrangement;

(3) a fully detailed statement indicating the plan under which the arrangement proposes to transact business;

(4) an initial actuarial opinion in compliance with the requirements of Section 846.153(a)(2) and subject to Section 846.157(b); and

(5) demonstration by the applicant that the arrangement is in compliance with all applicable federal and state laws, as determined by the commissioner.

(c) The application must be accompanied by proof of a fidelity bond that:

(1) protects against acts of fraud or dishonesty in servicing the multiple employer welfare arrangement;

(2) covers each person responsible for servicing the employee welfare benefit plan; and

(3) is in an amount equal to the greater of 10 percent of the premiums and contributions received by the arrangement or 10 percent of the benefits paid, during the preceding calendar year, with a minimum of $10,000 and a maximum of $500,000.

(d) A third-party administrator licensed to engage in business in this state is not required to submit a fidelity bond under Subsection (c).

(e) The commissioner shall promptly examine the application and documents submitted by the applicant and may:

(1) conduct any investigation that the commissioner considers necessary; and

(2) examine under oath any person interested in or connected with the multiple employer welfare arrangement.