Notice2022-19000
Exemption From Certain Prohibited Transaction Restrictions Involving Comcast Corporation (Comcast or the Applicant) Located in Philadelphia, PA
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 2, 2022
Issuing agencies
Labor DepartmentEmployee Benefits Security Administration
Abstract
This document contains a notice of exemption issued by the Department of Labor (the Department) from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). Under the exemption, the Comcast Corporation Comprehensive Health and Welfare Benefit Plan (the Plan) will enter into an insurance contract with an unrelated A-rated insurance company (the Fronting Insurer) that will, in turn, enter into a reinsurance contract with One Belmont Insurance Company (One Belmont), an affiliate of Comcast (the Reinsurance Arrangement). Under the Reinsurance Arrangement, One Belmont will reinsure the Plan's risks.
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 170 (Friday, September 2, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 170 (Friday, September 2, 2022)]
[Notices]
[Pages 54264-54269]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-19000]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Prohibited Transaction Exemption 2022-03; Exemption Application No. L-
12021]
Exemption From Certain Prohibited Transaction Restrictions
Involving Comcast Corporation (Comcast or the Applicant) Located in
Philadelphia, PA
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of exemption.
-----------------------------------------------------------------------
SUMMARY: This document contains a notice of exemption issued by the
Department of Labor (the Department) from certain of the prohibited
transaction restrictions of the Employee Retirement Income Security Act
of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986
(the Code). Under the exemption, the Comcast Corporation Comprehensive
Health and Welfare Benefit Plan (the Plan) will enter into an insurance
contract with an unrelated A-rated insurance company (the Fronting
Insurer) that will, in turn, enter into a reinsurance contract with One
Belmont Insurance Company (One Belmont), an affiliate of Comcast (the
Reinsurance Arrangement). Under the Reinsurance Arrangement, One
Belmont will reinsure the Plan's risks.
FOR FURTHER INFORMATION CONTACT: Mrs. Blessed Chuksorji-Keefe of the
Department at (202) 693-8567. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: On September 20, 2021, the Department
published a notice of proposed exemption in the Federal Register at 86
FR 52217, permitting: (1) the reinsurance of risks; and (2) the receipt
of premiums by One Belmont in connection with insurance contracts sold
by Prudential Insurance Company (Prudential), or any successor Fronting
Insurer, to provide group term life insurance benefits to participants
in the life insurance component (the Life Insurance Component) of the
Plan.
This exemption provides only the relief specified in the text of
the exemption. It provides no relief from violations of any law other
the prohibited transaction provisions of ERISA expressly stated herein.
The Department makes the requisite findings under ERISA Section
408(a) based on adherence to all of the conditions of the exemption.
Accordingly, affected parties should be aware that the conditions
incorporated in this exemption are, taken as a whole, necessary for the
Department to grant the relief requested by the Applicant. Absent these
or similar conditions, the Department would not have granted this
exemption.
The Applicant requested an individual exemption pursuant to ERISA
section 408(a) in accordance with the procedures set forth in 29 CFR
part 2570, subpart B (76 FR 66637, 66644, October 27, 2011).
Written Comments
In the proposed exemption, the Department invited all interested
persons to submit written comments and/or requests for a public hearing
with respect to the notice of proposed exemption. All comments and
requests for a hearing were due to the Department by November 4, 2021.
The Department received one written comment from the Applicant,\1\
discussed below, and three written comments from members of the public.
Two of the public commenters were against the proposed exemption and
shared the same general concern that the exemption would allow Comcast
to own or control the entities that provide healthcare services to its
employees.\2\ The other public commenter expressed a view that was
unrelated to the substance of the proposed exemption. The Department
did not receive any requests for a public hearing from any of the
commenters.
---------------------------------------------------------------------------
\1\ At the Department's request, the Applicant submitted an
additional written submission clarifying its comment letter.
\2\ The Department notes that Prudential, the ``fronting''
insurer, is unrelated to Comcast and its affiliates. The Department
has clarified section III(l) of this exemption to expressly provide
that, consistent with the Department's intent, each ``fronting''
insurer may not be owned or controlled, in whole or in part, by
Comcast.
---------------------------------------------------------------------------
Comments From the Applicant
I. Reinsurance Benefit
The Applicant notes that footnote 16 of the Summary of Facts and
Representations states: ``According to the Applicants, Prudential has
agreed to reduce the Plan's basic life insurance premiums by $375,000
in return for transferring the Plan's basic life insurance risks to One
Belmont. The result is a cost savings to Comcast since Comcast pays
100% of these premiums.''
The Applicant now represents, however, that, upon further review,
the Reinsurance Arrangement will not result in Prudential reducing the
premium amounts charged to Comcast for the Life Insurance Component.
Those premium amounts are expected to remain the same. The current
rates are guaranteed through December 31, 2023, as part of a three-year
guarantee period. The Plan has negotiated three-year guarantee periods
for several years.
Department's Note: Although Comcast will not save $375,000 per year
in Plan premium payments, as originally expected, Comcast now expects
One Belmont will instead receive approximately $375,000 in additional
earned income per year from the captive arrangement. Under the terms of
the exemption, the net result is the same: Plan participants must
receive all the financial benefits that Comcast derives from the
arrangement. This includes, as described in Section III(a) of the
exemption, any premium savings to Comcast from the captive reinsurance
arrangement, as well as any additional earned income to One Belmont
from the arrangement.
[[Page 54265]]
Comcast requests that the references throughout the exemption be
modified to reflect ``expected earned income'' or ``earned income''
rather than ``premium reduction'' or ``savings.''
Department's Response: The Department declines to revise the
operative language of the exemption as requested. The terms ``earned
income'' or ``expected earned income'' do not accurately describe the
exemption's expressed intent to ensure that all benefits generated from
the captive arrangement, not just additional earned income, inure to
the benefit of Plan participants. Consistent with this intent, the
Department has changed the term ``savings'' to ``benefits'' in Section
III(a) and deleted the reference to ``savings'' in Section III(g)(9)
(for consistency).
Further, the Department has not changed the term ``premium
reduction'' to ``earned income'' ``or expected earned income.'' The
term ``premium reduction,'' as used in the exemption, describes the
requirement that Comcast must reduce the participants' portion of the
premium for the dental component of the Plan by at least $375,000 each
year the reinsurance arrangement is in effect. In this context, the
term ``premium reduction'' more accurately describes the Department's
intent than ``earned income'' or ``expected earned income.''
II. Five-Year or Three-Year Look Back Proposal
Section III(a) of the proposal states that: ``In the initial year
and each subsequent year of the captive reinsurance arrangement, the
participants' portion of the premium for the dental component of the
Plan (the Dental Component) must be reduced by at least $375,000. If
Comcast's savings from the captive reinsurance arrangement are greater
than $375,000 in any year, Comcast must reduce the participants'
portion of the Dental Component's premium by that greater amount in the
next subsequent year. If Comcast or any of its affiliates ultimately
receive some other benefit in connection with the captive insurance
arrangement, such as a tax reduction or a profit or any benefit arising
from a further diversification of One Belmont's risks in connection
with adding the Plan-related insurance risks to One Belmont's other
risks, participants in the Dental Component must receive an additional
corresponding dollar-for-dollar reduction to their portion of the
Dental Component's premiums in the subsequent year.''
Comcast requests that this section be modified to allow for a five-
year look-back in which to calculate and apply any additional earned
income over $1,875,000 to reduce the dental premiums (i.e., any amount
above the $375,000 per year over a five-year period that Comcast is
already expected to receive from the arrangement and required to pass
on to participants in the form of reduced premiums). Comcast states
that it is ``concerned that the current structure of the proposed
exemption, which could involve adjustments to participant contribution
amounts each year, introduces the potential for significant
fluctuations in participant dental premium amounts over time.'' Comcast
states that such a period will help it ``smooth fluctuations in
participant contribution amounts over time.''
Comcast requests that if the Department is not agreeable to a five-
year lookback period, the exemption be modified to allow for a three-
year rolling lookback period. Comcast states that a three-year rolling
lookback would allow Comcast to assess over a three-year period whether
any additional earnings above $125,000 (the $375,000 guaranteed minimum
amount over a three-year period) must be credited against participant
contributions on an annual basis (subject to the timing request
discussed below). Comcast argues that this three-year rolling lookback
would mitigate any significant lag between the calculation of the extra
earning income and crediting the earnings against participant
contributions to the Dental Component and this methodology will allow
Comcast to achieve more consistent pricing to soften the impact of
fluctuations on participant contributions.
Department's Response: The Department declines to make either of
the Applicant's requested revisions. The Department developed the
conditions of the exemption to ensure that participants will benefit
from all earned income and other benefits that are generated by the
reinsurance arrangement. A five or three-year period is excessive for
participants to receive additional premium reductions. Among other
things, a multi-year period would deprive Plan participants who leave
Comcast's employment before the end of the period of the benefits of
further premium reduction. Consistent with this view, the exemption
requires Comcast to calculate One Belmont's earned income from the
reinsurance arrangement on an annual basis. However, the Department
acknowledges that Comcast may have legitimate concerns regarding the
amount of time it needs to properly reduce participants' premium
payments by such amount and has agreed to additional timing
considerations, as discussed immediately below.
III. Timing of Use of Benefits and Independent Fiduciary Report
Comcast represents that it is not feasible for the Independent
Fiduciary to provide their review of the documents within six months
after the end of the prior year. The Applicant also claims that
applying the extra earned income (amounts above the guaranteed
$375,000) to offset the Dental premiums for the immediately subsequent
plan year (which is a calendar year) may be very difficult because of
the time it takes for the insurance carrier to report year-end
information and for the Independent Fiduciary to calculate the earned
income to be applied to the Dental premium. The Applicant points to
timing constraints that may make it difficult to share the extra earned
income in the next year as required by the proposed exemption. In
particular, the Applicant states that the experience results for the
life insurance for the prior year are provided in May/June of the
subsequent year; final premium and employee contribution rates are set
no later than the end of July; One Belmont receives its audited
financial statement in mid-July, at the earliest, and therefore the
Independent Fiduciary cannot begin review until mid-July or later. The
Applicant claims these timing constraints will make it impossible to
apply any additional earnings above $375,000 against participant
contributions for the following Plan year in a process overseen by the
Independent Fiduciary.
The Applicant therefore requests that the Independent Fiduciary be
required to complete its report within one year after the 12-month
period to which it relates and submit the report to the Department
within four months thereafter.
Department's Response: Section III(a) of the exemption has been
revised to: (a) reflect a two-year ``make whole'' period; (b) require
the Plan to receive interest on amounts Comcast owes the Plan at a rate
equal to underpayments established in Internal Revenue Code section
6621(b); and (c) more clearly describes the term ``benefits.''
Section III(a) now reads, ``In the initial year and each subsequent
year of the captive reinsurance arrangement, the participant's portion
of the premium for the dental component of the Plan (the Dental
Component) must be reduced by at least $375,000. The Independent
Fiduciary must determine whether Comcast earned a financial
[[Page 54266]]
benefit in excess of $375,000 per year and must report its
determination as part of the Independent Fiduciary's annual report.
Benefits include, but are not limited to, increased earned income,
increased savings, a tax reduction or a profit or any benefit arising
from a further diversification of One Belmont's risks in connection
with adding Plan-related insurance risks to One Belmont's other risks.
If Comcast's benefit from the arrangement exceeds $375,000 per year in
any year (the Excess Benefit), Comcast must further reduce the
participants' portion of the dental component of the Plan's (the Dental
Plan's) premium no later than two years after the end of the year in
which the Excess Benefit was earned by an amount that is at least equal
to the Excess Benefit plus an additional payment of interest on the
Excess Benefit at the Code's federal underpayment rate established in
Internal Revenue Code section 6621(b). The interest on the Excess
Benefit must be calculated for the period from the end of the plan year
the Excess Benefit was earned through the start of the Plan year in
which the Excess Benefit is applied to reduce the participants' portion
of the Dental Plan's premiums. The premium reduction must benefit all
Dental Plan participants equally and must be verified by the
Independent Fiduciary.''
The Department is not persuaded that the Independent Fiduciary
needs four additional months to submit its completed report to the
Department, and so has not made the requested revision.
IV. Dental Premium Split
In paragraph 7 of the Summary of Facts and Representations, the
Department stated: ``In no event may the reduction in the participants'
portion of the Dental Component's premium be less than the amount
Comcast or any of its affiliates ultimately benefits from the captive
reinsurance arrangement. Further, Comcast must continue to contribute
no less than 60% of the Dental Component's premiums after the captive
reinsurance arrangement takes effect.''
In its comment letter, Comcast requests that the Department not
require a specific level of premium split for the Dental Component.
Comcast argues that locking-in the split between employer and employee
premium contribution amounts is unnecessary to make the captive
reinsurance arrangement protective of the participants and in their
best interest. Comcast claims that such a requirement would severely
constrain future offerings under the Dental Component and deter
Comcast, as settlor, from offering options that otherwise provide
greater benefits even though employees would be willing to pay more for
those benefits.
Comcast notes that its application stated that the dental payment
percentage split between Comcast and its employees was
``approximately'' 60/40. Comcast explains that the Plan offers three
different dental benefit options with three different premium splits.
Comcast employees are offered a Dental Maintenance Organization (DMO)
option and a Preferred Provider Organization (PPO) option while NBCU
(Comcast's affiliate) employees are offered only a PPO dental option.
Comcast states that because its primary goal is keeping the dollar
amount of employee contributions consistent across the two companies,
the Company contribution varies between 55% and 62%.
Comcast urged the Department to rely on the Independent Fiduciary's
annual review to evaluate compliance with the exemption.
Department's Response: The Department is revising the exemption by
removing the requirement that Comcast maintain a specific level of
premium contribution to the dental component. However, the Department
remains concerned that the value of the benefits provided to the Dental
Component through the captive reinsurance arrangement could be lessened
through offsetting reductions to other benefits provided to Comcast's
employees.
The Department notes that it is the responsibility of the
Independent Fiduciary to monitor, enforce, and ensure compliance with
all the conditions of the exemption. This includes Section III(k) of
the exemption, which provides that, ``Comcast will not evade the
condition in Section III(a) by offsetting or reducing any benefits
provided to Comcast employees to defray the costs, expenses, or
obligations of complying with this exemption.''
To that end, Section III(g)(8) of the exemption has been revised to
require the Independent Fiduciary to specifically confirm in its annual
report whether Section III(k) has been met and to describe the steps it
took in reaching this confirmation.
V. Commission
Section III(b) of the proposed exemption states that: ``No
commissions are paid by the Plan with respect to the direct sale of
such contracts or the reinsurance thereof . . .''
Comcast clarified in its comment letter ``that Prudential does pay
a supplemental commission in connection with the sale of the direct
life insurance coverage and will continue to pay this supplemental
commission as reflected on the Plan's Form 5500. The cost of this
supplemental commission is wholly borne by Prudential and the Plan
itself does not pay any separate commission in connection with the
purchase of the direct insurance and does not pay a commission in
connection with the reinsurance coverage either.''
Department's Response: The Department notes Comcast's
clarification. Comcast's Form 5500 lists the commission recipient as
``American Benefits & Compensation Systems, Inc.'' located in New York,
NY. Prudential confirmed that ``this continues to be the entity to whom
the commission is payable and that it believes Alliant owns the
entity.''
VI. Status of One Belmont as a Comcast Affiliate
The Department noted in paragraph 1 of the Summary of Facts and
Representations of the proposed exemption that ``Comcast wholly owns
One Belmont Insurance Company. . . .'' In its comment letter, Comcast
stated that it ``is more accurate to state that One Belmont is a wholly
owned subsidiary of Comcast Corporation.''
The Department has made certain other minor changes to the wording
of the exemption, including renumbering some of the exemption's
sections, for clarity and consistency.
The complete application file (L-12021) is available for public
inspection in the Public Disclosure Room of the Employee Benefits
Security Administration, Room N-1515, U.S. Department of Labor, 200
Constitution Avenue NW, Washington, DC 20210. For a more complete
statement of the facts and representations supporting the Department's
decision to grant this exemption, refer to the notice of proposed
exemption published on September 20, 2021, at 86 FR 52217.
Accordingly, after considering the entire record developed in
connection with the Applicant's exemption application and comment
letter, the Department has determined to grant the exemption described
below.
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under ERISA Section 408(a) does not relieve a fiduciary or other party
in interest from certain requirements of other ERISA provisions,
including any prohibited transaction provisions to which the
[[Page 54267]]
exemption does not apply and the general fiduciary responsibility
provisions of ERISA Section 404, which, among other things, require a
fiduciary to discharge his or her duties respecting the plan solely in
the interest of the plan's participants and beneficiaries and in a
prudent fashion in accordance with ERISA Section 404(a)(1)(B).
(2) As required by ERISA Section 408(a), the Department hereby
finds that the exemption is: (a) administratively feasible; (b) in the
interests of affected plans and of their participants and
beneficiaries; and (c) protective of the rights of participants and
beneficiaries of such plans.
(3) This exemption is supplemental to, and not in derogation of,
any other ERISA provisions, including statutory or administrative
exemptions and transitional rules. Furthermore, the fact that a
transaction is subject to an administrative or statutory exemption is
not dispositive of determining whether the transaction is in fact a
prohibited transaction.
(4) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describe all material terms of the transactions
that are the subject of the exemption.
Accordingly, the following exemption is granted under the authority
of ERISA Section 408(a), and in accordance with the procedures set
forth in 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 27,
2011):
Exemption
Section I. Definitions
(a) An ``affiliate'' of Comcast Corporation or One Belmont
includes: (1) Any person or entity who controls Comcast or One Belmont
or is controlled by or under common control with Comcast or One
Belmont; (2) Any officer, director, employee, relative, or partner with
respect to Comcast or One Belmont; and (3) Any corporation or
partnership of which the person in (2) of this paragraph is an officer,
director, partner, or employee;
(b) The term ``control'' means the power to exercise a controlling
influence over the management or policies of a person other than an
individual;
(c) The term ``Independent Fiduciary'' means a person who:
(1) Is not an affiliate of Comcast or One Belmont and does not hold
an ownership interest in Comcast or One Belmont or their affiliates;
(2) Is not a fiduciary with respect to the Plan before its
appointment to serve as the Independent Fiduciary;
(3) Has acknowledged in writing that it:
(i) is a fiduciary with respect to the Plan and has agreed not to
participate in any decision regarding any transaction in which it has
an interest that might affect its best judgment as a fiduciary; and
(ii) has appropriate technical training or experience to perform
the services contemplated by the exemption;
(4) has not entered into any agreement or instrument that violates
the prohibitions on exculpatory provisions in ERISA section 410 or the
Department's regulations relating to indemnification of fiduciaries at
29 CFR 2509.75-4.
(5) For purposes of this definition, no organization or individual
may serve as Independent Fiduciary for any fiscal year if the gross
income received by such organization or individual from Comcast, One
Belmont, or their affiliates for that fiscal year exceeds two percent
(2%) of such organization's or individual's gross income from all
sources for the prior fiscal year. This provision also applies to a
partnership or corporation of which such organization or individual is
an officer, director, or 10 percent (10%) or more partner or
shareholder, and includes as gross income amounts received as
compensation for services provided as an independent fiduciary under
any prohibited transaction exemption granted by the Department; and
(6) No organization or individual that is an Independent Fiduciary
and no partnership or corporation of which such organization or
individual is an officer, director, or ten percent (10%) or more
partner or shareholder may acquire any property from, sell any property
to, or borrow any funds from Comcast, One Belmont, or their affiliates
while serving as an Independent Fiduciary. This prohibition will
continue for a period of six months after: (i) the party ceases to be
an Independent Fiduciary; and/or (ii) the Independent Fiduciary
negotiates any transaction on behalf of the Plan during the period that
the organization or individual serves as an Independent Fiduciary.
Section II. Covered Transactions
The restrictions of ERISA Sections 406(a)(1)(D) and 406(b)(1) will
not apply to: (1) the reinsurance of risks; and (2) the receipt of
premiums therefrom by One Belmont in connection with insurance
contracts sold by Prudential (or any successor Fronting Insurer meeting
the requirements of this exemption) to provide group term life
insurance benefits to Plan participants in the Life Insurance Component
of the Plan. In order to receive such relief, the conditions in Section
II must be met in conformance with the definitions set forth in Section
I.
Section III. Conditions
(a) In the initial year and each subsequent year of the captive
reinsurance arrangement, the participant's portion of the premium for
the dental component of the Plan (the Dental Component) must be reduced
by at least $375,000, with no offset or reduction to other benefits
Comcast provides to its employees. The Independent Fiduciary must
determine whether Comcast Corporation (including One Belmont and any
affiliate or any person or entity related to Comcast Corporation
(hereinafter, collectively, Comcast) earned a financial benefit in
excess of $375,000 per year and must report its determination as part
of the Independent Fiduciary's annual report. Financial benefits
include, but are not limited to, increased earned income, increased
savings, a tax reduction or a profit or any benefit arising from a
further diversification of One Belmont's risks in connection with
adding Plan-related insurance risks to One Belmont's other risks. If
Comcast's benefit from the arrangement exceeds $375,000 per year in any
year (the Excess Benefit), Comcast must further reduce the
participants' portion of the dental component of the Plan's (the Dental
Plan's) premium no later than two years after end of the year in which
the Excess Benefit was earned, by an amount that is at least equal to
the Excess Benefit, plus an additional interest payment on the Excess
Benefit at the Internal Revenue Code's federal underpayment rate
established in Code section 6621(b). The interest on the Excess Benefit
must be calculated for the period from the end of the Plan year the
Excess Benefit was earned through the start of the plan year in which
the Excess Benefit is applied to participant dental premiums. The
premium reduction must benefit all Dental Plan participants equally and
must be verified by the Independent Fiduciary.
(b) No commissions are paid by the Plan with respect to the direct
sale of such contracts or the reinsurance thereof;
(c) In the initial year and in subsequent years of coverage
provided by a Fronting Insurer, the formulae used by the Fronting
Insurer to calculate premiums must be similar to formulae used by other
insurers providing comparable life insurance coverage under similar
programs that are not
[[Page 54268]]
captive reinsured. Furthermore, the premium charges calculated in
accordance with the formulae must be reasonable and must be comparable
to the premiums charged by the Fronting Insurer and its competitors
with the same or a better financial strength rating providing the same
coverage under comparable programs that are not captive reinsured;
(d) Comcast is solely and fully responsible for funding One
Belmont's reserves with respect to the reinsurance arrangement covered
by this exemption;
(e) One Belmont:
(1) Is a party in interest with respect to the Plan by reason of a
stock or partnership affiliation with Comcast that is described in
ERISA section 3(14)(E) or (G); \3\
---------------------------------------------------------------------------
\3\ Under ERISA section 3(14)(G), a corporation is a ``party in
interest'' with respect to an employee benefit plan if 50 percent or
more of the combined voting power of all classes of the
corporation's stock entitled to vote, or the total value of shares
of all classes of stock of the corporation, is owned by an employer
any of whose employees are covered by the employee benefit plan.
---------------------------------------------------------------------------
(2) Is licensed to sell insurance or conduct reinsurance operations
in at least one State as such term is defined in ERISA section 3(10);
(3) Has obtained a Certificate of Authority from the state of
Vermont, its domiciliary state, that has neither been revoked nor
suspended;
(4) (A) Has undergone and shall continue to undergo an examination
by an independent certified public accountant for its last completed
taxable year immediately before the taxable year of the reinsurance
transaction covered by this exemption; or
(B) Has undergone a financial examination (within the meaning of
the law of Vermont) by the Commissioner of Banking, Insurance,
Securities and Health Care Administration of the State of Vermont
within five (5) years before the end of the year preceding the year in
which the reinsurance transaction occurred; and
(5) Is licensed to conduct reinsurance transactions under Vermont
law, which requires an actuarial review of reserves to be conducted
annually by an independent firm of actuaries and reported to the
appropriate regulatory authority;
(f) The Plan retained and will continue to retain an independent,
qualified fiduciary or successor to such fiduciary, as defined in
Section I(c), (the Independent Fiduciary) to analyze the transactions
covered by this exemption, and render an opinion that all of the
requirements of this exemption have been satisfied;
(g) The Independent Fiduciary must:
(1) In full accordance with its obligations of prudence and loyalty
under ERISA sections 404(a)(1)(A) and (B), (i) review the terms of the
exemption, (ii) engage in a prudent and loyal analysis of the covered
transactions, and (iii) verify that based on its review of all relevant
documents and evidence, it has concluded that all of the exemption's
terms and conditions have been met (or can be reasonably be expected to
be met consistent with the time requirements set forth in this
exemption). This conclusion must be documented in a written report
submitted to the Department's Office of Exemption Determinations at
least 30 days before the Plan engages in a transaction covered by the
exemption. The report must include copies of each document relied on by
the Independent Fiduciary and discuss the basis for its conclusion;
(2) Monitor, enforce and ensure compliance with all conditions of
this exemption, including all conditions and obligations imposed on any
party dealing with the Plan, throughout the period during which One
Belmont's assets are directly or indirectly used in connection with a
transaction covered by this exemption;
(3) Report any instance of non-compliance immediately to the
Department's Office of Exemption Determinations;
(4) Monitor the transactions described in the exemption on a
continuing basis to ensure the transactions remain in the interest of
the Plan;
(5) Take all appropriate actions to safeguard the interests of the
Plan;
(6) Review all contracts pertaining to the Reinsurance Arrangement,
and any renewals of such contracts, to determine whether the
requirements of this exemption continue to be satisfied;
(7) Determine that the Reinsurance Arrangement is in no way
detrimental to the Plan and its participants and beneficiaries;
(8) Confirm in its annual report (and describe the steps taken to
confirm) that (i) the Plan's Dental Component has received all the
financial benefits associated with the captive reinsurance arrangement
that otherwise would have been retained by Comcast or a party related
to Comcast, and (ii) Comcast has not reduced or offset any participant
benefits in relation to its implementation and maintenance of the
reinsurance arrangement as required by section III(k), including a
reduction in premium contributions to the dental component or other
benefits Comcast provides to it employees;
(9) Provide an annual report to the Department, certifying Under
penalty of perjury that each term and condition of this exemption is
satisfied and setting forth the bases for the certification. Each
report must be completed and submitted to the Department within twelve
months after the end of the twelve-month period to which it relates
(the first twelve-month period begins on the first day of the
implementation of the captive reinsurance arrangement covered by this
exemption);
(h) Comcast and its related parties have not, and will not,
indemnify the Independent Fiduciary, in whole or in part, for
negligence and/or for any violations of state or federal law that may
be attributable to the Independent Fiduciary in performing its duties
under the captive reinsurance arrangement. In addition, no contract or
instrument will purport to waive any liability under state or federal
law for any such violations.
(i) Neither Comcast nor a related entity may use participant-
related data or information generated by, or derived from, the
Reinsurance Arrangement in a manner that benefits Comcast or a related
entity;
(j) All the facts and representations set forth in the Summary of
Facts and Representations are true and accurate;
(k) Comcast will not evade the condition in Section III(a) by
offsetting or reducing any benefits provided to Comcast employees to
defray the costs, expenses, or obligations of complying with this
exemption;
(l) The Plan will only contract with a Fronting Insurer that is
unrelated to Comcast, and that has a financial strength rating of ``A''
or better from A.M. Best. For purposes of this provision, the term
``unrelated'' means that the Fronting Insurer is not owned or
controlled by Comcast in whole or in part;
(m) The Plan must pay no more than adequate consideration with
respect to insurance that is part of the captive reinsurance
arrangement covered by the exemption;
(n) In the event a successor Independent Fiduciary is appointed to
represent the interests of the Plan with respect to the subject
transaction, no time shall elapse between the resignation or
termination of the former Independent Fiduciary and the appointment of
the successor Independent Fiduciary; and
(o) All expenses associated with the exemption and the exemption
application, including any payment to the Independent Fiduciary, must
be paid by Comcast and not the Plan.
Effective Date: This exemption will be in effect on the date that
this grant
[[Page 54269]]
notice is published in the Federal Register.
Signed at Washington, DC.
George C. Cosby,
Director, Office of Exemption Determinations, Employee Benefits
Security Administration, U.S. Department of Labor.
[FR Doc. 2022-19000 Filed 9-1-22; 8:45 am]
BILLING CODE 4510-29-P
</pre></body>
</html>Indexed from Federal Register on September 2, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.