Michigan Laws 500.7020 – Issuance of policies by MEWA; premium or premium deposit; contingent premium; restoration of cash reserves
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(1) The policies issued by the MEWA shall provide for a premium or premium deposit payable in cash and, except as herein provided, for a contingent premium at least equal to 1 month‘s premium or premium deposit, which may be prefunded, and in no event shall a member be liable for a greater amount than the premium or premium deposit expressed in the policy.
(2) The MEWA may issue its policy without a contingent premium when it has cash reserves as provided in section 7040.
Terms Used In Michigan Laws 500.7020
- Cash reserves: means federally guaranteed obligations that have a fixed recoverable principal amount or an irrevocable and unconditional letter of credit. See Michigan Laws 500.7001
- Commissioner: means the director. See Michigan Laws 500.102
- MEWA: means that term as defined in section 3 of the employee retirement income security act of 1974, Public Law 93-406, 88 Stat. See Michigan Laws 500.7001
- month: means a calendar month; the word "year" a calendar year; and the word "year" alone shall be equivalent to the words "year of our Lord". See Michigan Laws 8.3j
(3) If at any time the cash reserves are less than the requirement of section 7040, the MEWA shall immediately collect upon policies with a contingent premium a sufficient proportionate part thereof to restore the cash reserves, provided no member shall be liable for any part of the contingent premium in excess of the amount demanded within 1 year after the termination of the policy. The commissioner may by written order direct that proceedings to restore the reserves be deferred during the time fixed in the order.