Texas Department of Insurance v. American National Insurance Co.

The issue in this appeal is whether stop-loss insurance sold to self-funded employee health-benefit plans is “direct health insurance” or “reinsurance.” The distinction is significant because direct insurance is subject to state insurance regulation, while reinsurance is not. Reinsurance is not regulated because it typically involves the reallocation of risk between two insurance companies rather than a consumer-insurance transaction. The parties to this appeal disagree about whether an employer who self funds a health-benefit plan for its employees is an “insurer” under the Texas Insurance…