Stop-Loss Policies are 'Reinsurance' Under Texas Law, Court Rules

AUSTIN, Texas - Under Texas law, stop-loss policies sold to self-funded employee benefit plans are "reinsurance" and the self-funded plans are "insurers," therefore the companies selling the stop-loss policies were not required to pay certain fees to the state insurance department, a Texas appellate court has ruled. American National Insurance Co., et al. v. Texas Department of Insurance, et al., No. 03-08-00535 (Texas Ct. App., 3rd Dist.).

In reversing a trial court ruling, the Texas Third District Court of Appeals ruled on Dec. 16 that under former Article 3.10(a) of the Texas Insurance Code, self-funded plans may buy reinsurance like …