Texas High Court Upturns Stop-Loss Insurance Classification

Law360, New York (May 18, 2012, 4:18 PM EDT) -- The Texas Supreme Court on Friday reversed a lower court ruling on backstop insurance, finding that stop-loss insurance sold to a self-funded employee health benefit plan is not reinsurance, but rather direct insurance subject to state regulation.

The high court reversed a 2009 Texas appeals court ruling in favor of American National Insurance Co. and American National Life Insurance Co. of Texas, which had found that self-funded benefit plans were insurers and that their purchase of stop-loss insurance could be considered reinsurance and was thus exempt...
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