(a) Each multiple-employer welfare arrangement transacting business in this state shall file annually with the commissioner statements and reports described in paragraphs (1) and (2) of this subsection, as follow:      
        (1) within 90 days of the end of the MEWA's fiscal year, financial statements audited by a certified public accountant; and        
          (2) within 90 days of the end of the MEWA's fiscal year, an actuarial opinion prepared and certified by an actuary who is not an employee of the multiple-employer welfare arrangement and who is a fellow of the Society of Actuaries, a member of the American Academy of Actuaries, or an enrolled actuary under the Employee Retirement Income Security Act of 1974 (29 United States Code §1241 and §1242). The actuarial opinion shall include:                      (A) a description of the actuarial soundness of the multiple-employer welfare arrangement, including any recommended actions thatthe multiple-employer welfare arrangement should take to improve its actuarial soundness;                          (B) the recommended amount of cash reserves the multiple-employer welfare arrangement should maintain which shall not be less than the greater of 20% of the total contributions in the preceding plan year or 20% of the total estimated contributions for the current plan year;                              (C) a calculation of cash reserves with proper actuarial regard for known claims, paid and outstanding, a history of incurred by not reported claims, claims handling expenses, unearned premium, an estimate for bad debts, a trend factor, and a margin for error; and                                  (D) the recommended level of specific and aggregate stop-loss insurance the multiple-employer welfare arrangement should maintain.                  
                    (b) The cash reserves required by the Insurance Code, Chapter 3, Subchapter I, and these sections shall be maintained in cash or federally guaranteed obligationsof less than five-year maturity that have a fixed or recoverable principal amount or such other investments as the commissioner has authorized by rule.                    
                      (c) The commissioner shall review the statements and reports required by subsection (a) of this section. The commissioner shall automatically renew a multiple-employer welfare arrangement's certificate of authority unless the commissioner finds that the multiple-employer welfare arrangement does not meet the requirements of the Insurance Code, Chapter 3, Subchapter I, and these sections.                      
                        (d) On a finding of good cause, the commissioner may order an actuarial review of a multiple-employer welfare arrangement in addition to the actuarial opinion required by the Insurance Code, Article 3.95-8(a)(2). The cost of any such additional actuarial review shall be paid by the multiple-employer welfare arrangement.                       
     Source Note:        The provisions of this §7.1912 adopted to be effective May 27, 1994, 19 TexReg 3686.