2006-003, NH MOTOR TRANSPORT ASSOCIATION EMPLOYEE BENEFIT TRUST v. NH INSURANCE GUARANTY ASSOCIATION & a.

Association. for respondent New Hampshire Life and Health Insurance Guaranty Orr and Reno, P.A., of Concord (Lisa Snow Wade on the brief and orally),

Guaranty Association.

and Mark D. Robins orally), for respondent New Hampshire Insurance

Nixon Peabody LLP, of Manchester (John E. Friberg, Jr. & a. on the brief,

on the brief and orally), for the petitioner. Sheehan Phinney Bass + Green, P.A., of Manchester (James Q. Shirley

to press. Errors may be reported by E-mail at the following address:

NEW HAMPSHIRE INSURANCE GUARANTY ASSOCIATION & a.

page is: http://www.courts.state.nh.us/supreme. TRUST NEW HAMPSHIRE MOTOR TRANSPORT ASSOCIATION EMPLOYEE BENEFIT

No. 2006-003 editorial errors in order that corrections may be made before the opinion goes Merrimack Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New ___________________________

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as employees they have, to cover the shortfall.

p. 2 required to make additional contributions, based upon the number of

the Trust has collected from its members in a given year, the members are contribute the following year. On the other hand, if claims exceed the amount the surplus is used to reduce the amount that Trust members are required to

exceed the amount needed to cover administrative expenses and pay claims,

to a lifetime maximum of $4,875,000 per covered person. pay benefits in the first instance, subject to full reimbursement from Legion up

Trust’s administrative expenses. If, in a given year, employer contributions submitted by or on behalf of those covered by the Trust and to cover the money is deposited into a pooled account, which is used to pay claims

submitted to it. For any claim that exceeded that amount, the Trust was to

same amount per employee, regardless of their individual claim histories. The

Trust was responsible for the first $125,000 of every claim for health benefits insurance from Legion Insurance Company (Legion). Under the policy, the assume responsibility for those unpaid claims. NHIGA declined on the ground that statutory requirement, the Trust purchased a policy of specific excess loss

pays into the Trust a fixed amount per employee, and all employers pay the

entered its order of liquidation, the Trust asked both NHIGA and NHLHIGA to direct insurance. We affirm. and approved by the commissioner [of insurance].” RSA 415-E:3, III. To meet

administered by Anthem Blue Cross and Blue Shield. Each member employer members of the New Hampshire Motor Transport Association. The Trust is purpose is to provide a health care benefit program for the employees of

approximately $412,971 in unpaid claims. After the Pennsylvania court under which the Trust’s unpaid claims arose was for reinsurance rather than with a retention level determined in accordance with sound actuarial principles liquidation. When Legion was placed into rehabilitation, it owed the Trust unable to pay because the Trust itself was an insurer and because the policy Commonwealth Court, and in July 2003, that court entered an order of NHLHIGA was obligated to cover claims that the Trust’s insolvent insurer was In April 2002, Legion was placed into rehabilitation by the Pennsylvania

Retirement Income Security Act of 1983 and RSA chapter 415-E (2006). Its

By statute, “[e]ach arrangement shall maintain specific excess insurance

Guaranty Association (NHLHIGA). The trial court ruled that neither NHIGA nor

welfare arrangement (arrangement) organized under the federal Employee

Guaranty Association (NHIGA) and New Hampshire Life and Health Insurance

Court (

The facts are not in dispute. The Trust is a non-profit multiple-employer

the summary judgment motions of the respondents, New Hampshire Insurance Fitzgerald, J.) denying its motions for summary judgment and granting Association Employee Benefit Trust (Trust), appeals an order of the Superior BRODERICK, C.J. The petitioner, New Hampshire Motor Transport matters of statutory interpretation, we are the final arbiter of legislative intent

p. 3 prevents it from becoming a substitute insurer,” 404-B:2.” RSA 404-B:4. However, “[t]he statutory framework of NHIGA chapter 404-B “shall be liberally construed to effect the purpose under RSA resolve it, we must construe the term “insurer” as used in RSA 404-B:5, IV. In

association, as subrogation recoveries or otherwise,” RSA 404-B:5, IV.

assess the cost of such protection among insurers.” RSA 404-B:2. Moreover, insurer, it has no claim against NHIGA, and so we begin with that issue. To

“any amount due any reinsurer, insurer, insurance pool, or underwriting

the Life & Health Guaranty Act.

because of the insolvency of an insurer . . . and to provide an association to The Trust conceded at oral argument that if we determine it to be an

and all parties moved for summary judgment. 408-B:5, II(b)(2). The trial court agreed. This appeal followed.

to pay only “covered claims,” RSA 404-B:8, I(a)-(b), a category that excludes limited in a variety of ways, see id. at 598-99. For example, NHIGA is obligated Assoc., 151 N.H. 590, 598 (2004), and the protection provided by NHIGA is

delay in payment and to avoid financial loss to claimants or policyholders payment of covered claims under certain insurance policies to avoid excessive chapter 408-B (2006). The Trust then filed a declaratory judgment petition, from a policy of reinsurance, thus excluding them from coverage under RSA The purpose of the Guaranty Act is “to provide a mechanism for the

amounts due an insurer. The trial court agreed. Legion were not “covered claims” under RSA 404-B:5, IV because they were for under the Guaranty Act by RSA 404-B:3; and (2) the Trust’s claims against begin with the Trust’s arguments for coverage from NHIGA under the Guaranty Belanger v. MMG Ins. Co., 153 N.H. 584, 586 (2006). Like the trial court, we We review the trial court’s application of the law to the facts de novo.

Health Insurance Guaranty Association Act (Life & Health Guaranty Act), RSA had no obligation to cover the Legion policy because the Trust’s claims arose insurance plan is not a covered product” under the New Hampshire Life and In its motion for summary judgment, NHLHIGA argued, inter alia, that it health insurance, and NHLHIGA declined on the ground that “a stop-loss group

the Legion policy was not direct insurance, and is thus excluded from coverage In its motion for summary judgment, NHIGA argued, inter alia, that: (1)

RSA chapter 404-B (2006), does not provide coverage for policies of life and that the New Hampshire Insurance Guaranty Association Act (Guaranty Act), p. 4 Trust is an insurer. Whether or not the Trust is an insurance company, it does

members of the public; we are faced with the broader question of whether the

engaged in the business of insurance.

the Trust is an insurance company properly qualified to sell policies to premium taxes, and the like. However, the question before us is not whether with the National Association of Insurance Commissioners, payment of

employees of its members, the Trust has been deemed by the legislature to be Thus, with regard to the Trust’s core function, providing health benefits to the shall be deemed to be engaged in the business of insurance.” RSA 415-A:1, I.

it is not subject, such as licensure by the insurance department, registration

collecting contributions from its members and paying claims out of those

accident and health insurance, “multiple-employer welfare arrangements . . .

number of statutory requirements pertaining to insurance companies to which

Trust insures its members’ employees against the risk of illness and injury by we ascribe to them their plain and ordinary meaning. fact, does not define the term “insurer.” When statutory terms are undefined,

out of which losses are paid,” purposes of RSA chapter 415-A (2006), which pertains to standards for

To support its argument that it is not an insurer, the Trust identifies a

concur with the trial court’s determination that the Trust is an insurer. The aid us in construing the term “insurer” in RSA 404-B:5, IV. The statute, in

members of a large group and employing a system of equitable contributions purpose of offering or providing health benefits.” RSA 415-E:1, I. For the regulated under RSA chapter 415-E and are “established or maintained for the Trust’s operations as an arrangement. Arrangements such as the Trust are Our conclusion is consistent with the statutory scheme governing the

the operation of the Trust and the common definition of the term “insurer,” we Act rather than to potential recipients of payments from NHIGA, they do not id. Based upon the stipulated facts concerning

“a device for the elimination or reduction of an economic risk common to all or damage by a contingent event (as death, fire, accident, or sickness),” id., and of “insurance” includes both “the action or process of insuring . . . against loss International Dictionary 1173 (unabridged ed. 2002). The common definition that contracts to indemnify another by way of insurance.” Webster’s Third New Nottingham, 153 N.H. 539, 553 (2006). In common usage, an “insurer” is “one

providers of insurance whose policyholders might be protected by the Guaranty insurer,” see RSA 404-B:5, V-VI, but because those definitions pertain to Chapter 404-B defines the terms “insolvent insurer” and “member

Rochester v. Corpening, 153 N.H. 571, 573 (2006). the context of the overall statutory scheme and not in isolation. City of Warden, N.H. State Prison, 153 N.H. 603, 605 (2006). We interpret statutes in as expressed in the words of the statute considered as a whole. Debonis v. the actual amount of the covered claim, p. 5 I(a); and (3) limit the amount of NHIGA’s obligation to $300,000, regardless of

include. function to add provisions to the statute that the legislature did not see fit to required to purchase excess insurance, but it was not, and it is not our

and arising within 30 days after the determination of insolvency,” RSA 404-B:8,

drafted to exclude payments of amounts due insurers except for arrangements

obligation to “covered claims existing prior to the determination of insolvency the definition of “covered claim,” RSA 404-B:5, IV; (2) generally limit NHIGA’s amounts due to reinsurers, insurance pools, or underwriting associations from

fairness, it has little support in the Act itself. RSA 404-B:5, IV could have been initial appeal, implicating, as it does, notions of equity and fundamental not to enjoy the protection of the Guaranty Act. While that argument has an Compensation Self-Insurance Group v. Property & Casualty Insurance 437 N.W.2d 909 (Iowa 1989), and Maryland Motor Truck Assoc. Workers’ out of character with the provisions of RSA chapter 404-B that: (1) exclude Contractors Workers’ Compensation Group v. Iowa Insurance Guaranty Assoc., The Trust devotes considerable attention to two out-of-state cases, Iowa

by which it is funded.” Benson, 151 N.H. at 598. provides is limited based upon its status as a nonprofit entity and the method

blanket accident or health insurance,”

implausible that the legislature intended for arrangements such as the Trust

“insurer” that places the burden of Legion’s insolvency upon the Trust is not

Nottingham, 153 N.H. at 546. Moreover, a construction of the term

417-E applicable to “each insurer that issues or renews any policy of group or

insurer for purposes of RSA 417-E:1 (1998). insure themselves are required by statute to purchase excess insurance, it is The Trust further argues that because arrangements that do not fully

Marshall qualified that term. IV does not qualify the term “insurer” in the same way as the statute in 18. Marshall is inapplicable to our analysis in this case because RSA 404-B:5, add words to the statute that the legislature did see fit to include. renew any policies of group or blanket accident or health insurance, id. at 217not payments due licensed insurers or insurance companies, and we will not omitted), and our decision was based upon the fact that KSC did not issue or the purposes of RSA 404-B:5, IV. That statute bars payments due insurers, id. at 217 (quotation and citation

However, the statutory language we construed in that case made RSA chapter

(KSC), which maintained a self-funded employee benefit plan, was not an College, 147 N.H. 215 (2001). In that case, we held that Keene State College The Trust also relies upon our opinion in Marshall v. Keene State

Debonis, 153 N.H. at 605.

that is sufficient, under our plain-meaning analysis, to make it an insurer for insure the employees of its members against the risk of illness and injury, and said, based upon p. 6 coverage against their own risks of illness and injury, the most that can be

statutory language reasonably allows. our power to liberally construe a statute extends only to the extent that the

an employer’s participating in an arrangement to provide its employees with in favor of NHIGA.

certain limitations, the persons specified in RSA 408-B:5, I against failure in

provision. We are, of course, obligated to follow that statutory mandate, but

employers self-insuring against the risk of workers’ compensation claims and for the purposes of RSA 404-B:5, IV, we affirm its grant of summary judgment

The purpose of the Life & Health Guaranty Act “is to protect, subject to

Trust’s reliance upon RSA 404-B:4, the Guaranty Act’s liberal construction II

self-insurance group, does not provide coverage for its own risks. members’ employees. Given the fundamental difference between one or more Because the trial court correctly determined that the Trust is an insurer insured against is not any risk of a Trust member, but rather the risks of the employee who suffers a work related injury”). Here, by contrast, the risk determination that the Trust is not an insurer. Hampshire law were to follow (1999). In this case, the statutory language does not reasonably allow the members’ employees, would clearly qualify as an insurer. But if New

We conclude our discussion of the Guaranty Act by addressing the

determinative of the status of the Trust, which, unlike a workers’ compensation compensation self-insurance group not to be an insurer, that would not be personal liability for workers’ compensation benefits that would be due to an Iowa Contractors, and consider a workers’

group as an insurer, then the Trust, which provides coverage for the risks of its New Hampshire law were to regard a workers’ compensation self-insurance

Iowa Contractors and Maryland Motor Truck is as follows: If

“[a]n employer obtains workers’ compensation insurance . . . in order to avoid Jennings v. Liberty Mut. Ins. Co., 144 N.H. 559, 561 (1999) (explaining that 437 N.W.2d at 917; see Maryland Motor Truck, 871 A.2d at 591; see also Kingtheir own “risks of adverse workers’ compensation claims,” Iowa Contractors, insurance groups, composed of employers, that protected their members from Both Iowa Contractors and Maryland Motor Truck involved self-

follow, we find neither opinion particularly instructive. Maryland Motor Truck and the parties’ arguments over which case we should the better reasoned opinion. Notwithstanding the trial court’s reliance upon an insurer. The respondents, in turn, contend that Maryland Motor Truck is Contractors rather than Maryland Motor Truck and hold that the Trust is not Guaranty Corp., 871 A.2d 590 (Md. 2005), arguing that we should follow Iowa direct health insurance policy.

p. 7 received health insurance under the plan). Trust’s direct risk of claims against it in excess of $125,000. policy, Legion insured the Trust. The risk the policy insured against was the

its definition of “health insurance.” However, that definition is expressly

benefited plan itself and only indirectly benefited plan participants who

Legion issued the Trust was not a direct health insurance policy. Under that

suffered by the Trust’s members’ employees, but because the Trust itself was chapter. course, claims against the Trust necessarily arise from illness or injury contracts issued by member insurers, except as limited by this participants, who were insured by the plan, not by the excess loss carrier). Of RSA chapter 404-G:2, VII (2006) includes “group excess loss insurance” within group policies and contracts, and for unallocated annuity The Trust argues that its Legion policy was health insurance because

preemption context, that employee benefit plan’s excess loss insurance directly Council, 623 F. Supp. 1154, 1157 (D. Me. 1985) (explaining, in ERISA insurance,” we have no difficulty concluding that the specific excess loss policy See Cuttle v. Federal Employees Metal Trades

loss insurance was not health insurance and provided no coverage to plan supplemental policies or contracts, for certificates under direct (explaining, in ERISA preemption context, that employee benefit plan’s excess & Commercial Workers v. Pacyga, 801 F.2d 1157, 1161-62 (9th Cir. 1986)

RSA 408-B:5, II(a). While chapter 408-B does not define the term “health NHLHIGA provides coverage for direct health insurance policies. See

obligated to cover its claims under that policy. suggested in its rejection letter and argued in its brief, then NHLHIGA is Act is that if its Legion policy was a policy of health insurance, as NHIGA in paragraph I for direct, non-group life, health, annuity, and The Trust’s only argument for coverage under the Life & Health Guaranty

cover the Trust’s unpaid claims against Legion because excess loss insurance purpose under RSA 408-B:2.” RSA 408-B:3. According to the coverage and the Life & Health Guaranty Act is to “be liberally construed to effect the RSA 408-B:5, II(a). NHLHIGA contends, inter alia, that it was not obligated to that issued the policies or contracts.” RSA 408-B:2, I. Like the Guaranty Act,

This chapter shall provide coverage to the persons specified

policies . . . because of the impairment or insolvency of the member insurer the performance of contractual obligations, under life and health insurance p. 8 8

DALIANIS, DUGGAN, GALWAY and HICKS, JJ., concurred.

judgment in favor of NHLHIGA. the Life & Health Guaranty Act, we affirm the trial court’s grant of summary Because the Trust’s Legion policy was not a form of insurance covered by

words.”). and presume that the legislature did not enact superfluous or redundant (2002) (“When construing a statute, we must give effect to all words in a statute Winnacunnett Coop. Sch. Dist. v. Town of Seabrook, 14 p. 8 8 N.H. 519, 525-26 us the authority to ignore the legislature’s use of the term “direct,” see see RSA 408-B:5, II(a), and the Act’s liberal construction mandate does not give is the only kind of health insurance covered by the Life & Health Guaranty Act, properly considered health insurance, it is not direct health insurance, which limited to chapter 404-G, see RSA 404-G:2. Even if excess loss insurance is