92162 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 

Resources Division, and should refer to 

United States and State of Washington 

v. City of Seattle, D.J. Ref. No. 90–5–1– 

1–10066. All comments must be 

submitted no later than thirty (30) days 

after the publication date of this notice. 

Comments may be submitted either by 

email or by mail: 

To submit 

comments: Send them to: 

By email ....... pubcomment-ees.enrd@

usdoj.gov. 

By mail ......... Assistant Attorney General, 

U.S. DOJ–ENRD, P.O. Box 

7611, Washington, DC 

20044–7611. 

Any comments submitted in writing 

may be filed by the United States in 

whole or in part on the public court 

docket without notice to the commenter. 

During the public comment period, 

the modification may be examined and 

downloaded at this Justice Department 

website: https://www.justice.gov/enrd/ 

consent-decrees. If you require 

assistance accessing the modification, 

you may request assistance by email or 

by mail to the addresses provided above 

for submitting comments. 

Kathryn C. Macdonald, 

Assistant Section Chief, Environmental 

Enforcement Section, Environment and 

Natural Resources Division. 

[FR Doc. 2024–27172 Filed 11–20–24; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Exemption Application No. L–12066] 

Proposed Exemption from Certain 

Prohibited Transaction Restrictions 

Involving Meta Platforms, Inc. Located 

in Menlo Park, CA 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemption. 

SUMMARY: This document provides 

notice of the pendency before the 

Department of Labor (the Department) of 

a proposed individual exemption from 

certain of the prohibited transaction 

restrictions of the Employee Retirement 

Income Security Act of 1974 (ERISA or 

the Act). If the proposed exemption is 

granted, the Meta Platforms Inc. Health 

and Welfare Benefit Plan (the Plan) 

would enter into an insurance contract 

with Prudential Life Insurance 

Company of America (Prudential). The 

contract would cover the Plan’s group 

term life insurance benefits, accidental 

death and dismemberment benefits, and 

survivor income benefits (the Covered 

Insurance). Prudential would then 

reinsure the Covered Insurance by 

entering into a reinsurance contract 

with Ekahi Insurance Company, LLC 

(Ekahi), an insurance company that is 

owned by Meta Platforms, Inc. (Meta). 

Importantly, at all times and in all 

events, Prudential would remain fully 

and completely responsible to the Plan 

with respect to the Covered Insurance, 

regardless of whether Ekahi met its 

obligations to Prudential. 

DATES: Applicability date: If granted, 

this proposed exemption will be in 

effect for the period beginning on the 

date of publication in the Federal 

Register. 

Comments due: Written comments 

and requests for a public hearing on the 

proposed exemption should be 

submitted to the Department by January 

21, 2025. 

ADDRESSES: All written comments and 

requests for a hearing should be sent to 

the Employee Benefits Security 

Administration (EBSA), Office of 

Exemption Determinations, Attention: 

Application No. L–12066, via email to eOED@dol.gov or online through https:// 

www.regulations.gov. Any such 

comments or requests should be sent by 

the end of the scheduled comment 

period. The application for exemption 

and the comments received will be 

available for public inspection in the 

Public Disclosure Room of the 

Employee Benefits Security 

Administration, U.S. Department of 

Labor, Room N–1515, 200 Constitution 

Avenue NW, Washington, DC 20210 

((202) 693–8673). See SUPPLEMENTARY

INFORMATION below for additional 

information regarding comments. 

FOR FURTHER INFORMATION CONTACT: 

Nicholas Schroth of the Department at 

(202) 693–8571. (This is not a toll-free 

number.) 

SUPPLEMENTARY INFORMATION: 

Comments 

1. Persons are encouraged to submit 

all comments electronically and not to 

follow with paper copies. Comments 

should state the nature of the person’s 

interest in the proposed exemption and 

the manner in which the person would 

be adversely affected by the exemption, 

if granted. Any person who may be 

adversely affected by an exemption can 

request that the Department holds a 

hearing on the exemption. A request for 

a hearing must state: (1) the name, 

address, telephone number, and email 

address of the person making the 

request; (2) the nature of the person’s 

interest in the exemption and the 

manner in which the person would be 

adversely affected by the exemption; 

and (3) a statement of the issues to be 

addressed and a general description of 

the evidence to be presented at the 

hearing. The Department will grant a 

request for a hearing made in 

accordance with the requirements above 

where a hearing is necessary to fully 

explore material factual issues 

identified by the person requesting the 

hearing. A notice of such hearing shall 

be published by the Department in the 

Federal Register. The Department may 

decline to hold a hearing if: (1) the 

request for the hearing does not meet 

the requirements above; (2) the only 

issues identified for exploration at the 

hearing are matters of law; or (3) the 

factual issues identified can be fully 

explored through the submission of 

evidence in written (including 

electronic) form. 

2. WARNING: All comments received 

will be included in the public record 

without change and may be made 

available online at https://

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be confidential or other 

information whose disclosure is 

restricted by statute. If you submit a 

comment, EBSA recommends that you 

include your name and other contact 

information in the body of your 

comment, but DO NOT submit 

information that you consider to be 

confidential, or otherwise protected 

(such as a Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. However, if 

EBSA cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EBSA might not be 

able to consider your comment. 

Additionally, the https://

www.regulations.gov website is an 

‘‘anonymous access’’ system, which 

means EBSA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an email directly 

to EBSA without going through https:// 

www.regulations.gov, your email 

address will be automatically captured 

and included as part of the comment 

that is placed in the public record and 

made available on the internet. 

Background 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the 

Employee Retirement Income Security 

Act of 1974, as amended (ERISA), and 

in accordance with the procedures set 


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1This proposed exemption does not provide 

relief from the requirements of, or specific sections 

of, any law not noted above. Accordingly, the 

Applicant is responsible for ensuring compliance 

with any other laws applicable to the transactions 

described herein. 

2The Department notes that the Independent 

Fiduciary’s annual written report is essential to the 

Department’s tentative finding that the exemption 

will be in the interest and protective of the Plan and 

its participants and beneficiaries. The Independent 

Fiduciary must clearly, prudently and loyally 

determine whether Meta and its affiliates have 

complied with each term and condition of the 

exemption and include its finding in the report. The 

relief provided in the exemption is conditioned 

upon the independent fiduciary’s compliance with 

this requirement. 

3The Department notes that availability of the 

exemption is subject to the express condition that 

the material facts and representations contained in 

application L–12066 are true and complete, and 

accurately describe all material terms of the 

transactions covered by the exemption. If there is 

any material change in a transaction covered by the 

exemption, or in a material fact or representation 

described in the application, the exemption will 

cease to apply as of the date of such change. 

4Hawaii state law 19 section 431:19–101. 

5The Applicant represents that the use of an 

incorporated protected cell to conduct reinsurance 

operations as described herein has no effect on the 

parties’ adherence to the conditions for exemptive 

relief. 

6Hawaii state law 19 section 431:19–101. 

forth in 29 CFR part 2570, subpart B (75 

FR 66637, 66644, October 27, 2011).1 As 

described in more detail below, the 

proposed exemption would allow the 

Meta Platforms Inc. Health and Welfare 

Benefit Plan (the Plan), which is 

sponsored by Meta Platforms, Inc. 

(Meta) to enter into an insurance 

contract with Prudential Life Insurance 

Company of America, an unrelated Arated insurance company (hereafter 

referred to as Prudential or the Fronting 

Insurer). Contemporaneously, the 

Fronting Insurer would enter into a 

reinsurance contract (collectively, the 

Reinsurance Arrangement), with Ekahi 

Insurance Company, LLC (Ekahi), a 

captive insurer that is owned by Meta. 

Under the Reinsurance Arrangement, 

Ekahi would reinsure the Plan’s risks 

related to providing group term life 

insurance benefits, accidental death and 

dismemberment (AD&D) benefits, and 

survivor income benefits. Importantly, 

the Fronting Insurer (or any successor 

fronting insurer) would remain fully 

responsible for these risks in the event 

that Ekahi does not fulfill its contractual 

obligations to the Fronting Insurer. 

Meta Platforms, Inc. (Meta), through 

its ownership of Ekahi, is expected to 

receive a benefit from the Reinsurance 

Arrangement. To ensure that most of the 

financial benefits from the arrangement 

are passed through to the Plan and its 

participants and beneficiaries, this 

proposed exemption would require 

Meta to fund certain new Plan benefit 

enhancements. Specifically, the 

financial benefit that Ekahi or a related 

party (including Meta) receives directly 

or indirectly from the Reinsurance 

Arrangement must be less than the 

value of the enhanced financial benefits 

to the Plan and its participants and 

beneficiaries. Accordingly, for every 

dollar of financial benefits that the 

Reinsurance Arrangement is expected to 

generate, the Plan, its participants and 

beneficiaries must receive at least 51 

cents on the dollar and, Ekahi and 

related parties may not receive more 

than 49 cents. Furthermore, Ekahi and 

related parties may not offset the 

enhanced financial benefits, directly or 

indirectly, by reducing other plan 

benefits or other compensation to the 

Plan’s participants or beneficiaries. 

This proposed exemption also would 

require Meta to delegate fiduciary 

oversight of the Reinsurance 

Arrangement to a qualified fiduciary 

that is independent of Meta and its 

affiliates (the Independent Fiduciary). 

The Independent Fiduciary would be 

required to approve the Reinsurance 

Arrangement in advance, ensure that the 

Reinsurance Arrangement is in the 

interest and protective of the Plan and 

its participants and beneficiaries at all 

times, submit annual and five-year 

‘‘look-back’’ reports to the Department, 

and ensure that all of exemption’s 

conditions are met.2

Summary of Facts and 

Representations 3

The Parties 

1. Meta. Meta is a multinational 

technology company headquartered in 

Melo Park, California. 

2. The Plan. The Plan is sponsored by 

Meta and provides health, dental, 

vision, temporary disability insurance 

for accidents and sickness, prepaid legal 

services, long-term disability, death 

benefits, basic employee term life 

coverage, basic AD&D coverage, 

employee survivor benefits life 

coverage, supplemental employee term 

coverage, dependent term life insurance 

(spouse or domestic partner), and 

dependent term life insurance 

(children). As of December 31, 2020, the 

Plan covered more than 45,714 

participants. 

3. Prudential Life Insurance Company 

of America. The Plan’s benefits are 

insured by Prudential Life Insurance 

Company of America, which received 

an ‘‘A+’’ financial strength rating from 

A. M. Best Company (A. M. Best) as of 

December 15, 2022. Prudential is 

unrelated to Meta and, per the 

conditions of the exemption, must 

remain so throughout the duration of 

the Reinsurance Arrangement. 

4. Honu. Honu Insurance Company, 

LLC (Honu) was organized on December 

1, 2020, as a wholly-owned subsidiary 

of Meta. On December 22, 2020, the 

State of Hawaii Department of 

Commerce and Consumer Affairs’ 

Insurance Division Hawaii (hereafter 

referred to as Hawaii) issued Honu a 

certificate of authority to transact 

business as a pure captive insurance 

company. Under Hawaii state law, a 

pure captive insurance company is a 

captive insurance company that only 

insures or reinsures risks of its parent 

and affiliated entities or of a controlled 

unaffiliated business.4 On May 10, 2022, 

Hawaii approved Honu’s conversion 

from a pure captive insurance company 

to a sponsor captive insurance company 

and allowed the establishment of a 

protected cell, called Ekahi Insurance 

Company, LLC, to operate as a cell 

company sponsored by Honu.5 In turn, 

Hawaii state law generally provides that 

a sponsor captive insurance company is 

a captive insurance company if: (1) its 

minimum required capital and surplus 

is provided by one or more sponsors; (2) 

it is formed or licensed under Hawaii 

state law; (3) it insures the risks only of 

its participants through separate 

participant contracts; and (4) it may 

fund its liability to each participant 

through one or more protected cells.6

5. Ekahi. Ekahi Insurance Company, 

LLC (Ekahi) is a wholly-owned 

subsidiary of Meta. Presently, Ekahi 

reinsures employee benefits for Meta’s 

international benefit plans, and Meta 

intends to expand its global benefits 

program by using Ekahi as its reinsurer 

for its domestic benefits as well. The 

Applicant states that, as a protected cell 

of a captive insurance company, Ekahi 

is a separate juridical entity (e.g., a 

corporation or an LLC) formed under 

the captive insurance company laws of 

a state and has no responsibility for the 

liabilities of other cells that may be 

formed within such captive insurance 

company. The juridical entity formed as 

a cell has all of the characteristics of any 

such entity, e.g., in the case of a 

corporate cell it has articles of 

incorporation. 

The Reinsurance Arrangement 

6. Meta intends to utilize Ekahi to 

reinsure the following Plan benefits: 

basic employee term life coverage, basic 

accidental death and dismemberment 

coverage, employee survivor benefits 

coverage, supplemental employee term 

coverage, dependent term life insurance 

(spouse or domestic partner), dependent 

term life insurance (children) 


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7Meta represents, based on information from 

Milliman and Willis Towers Watson, that Ekahi’s 

projected net premiums in the first year from the 

Reinsurance Arrangement will be $33.5 million 

from the Fronting Insurer and $0 in investment 

income. Meta further represents that Ekahi’s 

projected expenses from the Reinsurance 

Arrangement in the first year will be $22.3 million 

in claims incurred, $3.8 million in underwriting 

expenses, $200,000 in general and administrative 

expenses, and $1.5 million in taxes. Resulting in a 

first-year projected benefit of approximately $5.7 

million to Ekahi. 

8This includes any benefit to Meta or a related 

party arising from a further diversification of 

Ekahi’s risks in connection with the addition of the 

Plan’s employee benefit insurable risks to Ekahi’s 

other insurable risks, or arising from an additional 

tax benefit, for example, due to a change in 

circumstances or law permitting a deduction for 

Meta’s reinsurance of its own corporate risks 

through Ekahi. 9The Department retains the right to propose a 

revocation or amendment to the exemption if it is 

unable to confirm the reliability of the underlying 

financial data supporting the Independent 

Fiduciary’s ‘‘look-back’’ findings. The Department 

notes that its failure to revoke an exemption is not 

an endorsement or conclusion that the conditions 

of the exemption are met. 

(hereinafter collectively referred to as 

the Reinsured Benefits). 

7. The Reinsurance Arrangement 

would be structured as follows: (a) the 

Plan would enter into an insurance 

arrangement with Prudential to insure 

the Plan’s risks; and (b) Prudential 

would enter into a reinsurance 

agreement with Ekahi in reliance on 

Honu’s license, whereby Ekahi would 

reinsure 100 percent of the Plan’s risks 

relating to the Reinsured Benefits. 

8. In general terms, the Plan would 

make premium payments to Prudential, 

and Prudential would make 

corresponding payments to Ekahi in an 

amount less than the premiums it is 

paid by the Plan. The amount that 

Prudential retains from the Plan’s 

premium payment is a negotiated fee, 

while the amounts Prudential pays to 

Ekahi is Ekahi’s premium for reinsuring 

the Plan’s risks. The reinsurance 

agreement between Prudential and 

Ekahi would be ‘‘indemnity only,’’ 

which means that Prudential would 

maintain the responsibility to pay 

benefit claims to participants and 

beneficiaries in the event Ekahi does not 

satisfy any of its contractual obligations 

to Prudential under the Reinsurance 

Arrangement for any reason. 

9. In this Reinsurance Arrangement, 

Prudential is known as the ‘‘Fronting 

Insurer,’’ and Ekahi is known as the 

‘‘Captive Insurer.’’ Administration of the 

claims under the Plan will be performed 

directly by Prudential as the direct 

insurer of the Plan, and Prudential will 

remain directly liable to the participants 

for administration and payment of 

claims under the Plan. Prudential would 

pay all claims under its insurance 

contract with the Plan and seek 

reimbursement for its proportionate 

share of claims payments from Ekahi 

under the Reinsurance Arrangement. 

Ekahi would be bound by Prudential’s 

claims handling decisions under the 

Plan and not have direct contact with 

participants, make direct payments to 

participants, or have responsibility for 

the benefit determinations. Under the 

terms of the Reinsurance Arrangement, 

Ekahi’s reinsurance obligations to 

Prudential would be secured with 

collateral (i.e. a letter of credit or funds 

in a trust account), but Prudential 

would assume ultimate financial 

liability for payment of the Plan’s 

benefit claims in the event Ekahi is 

unable to satisfy its obligations to 

Prudential. 

Benefit to Meta 

10. The Applicant states that Ekahi 

(and Meta indirectly) expects to receive 

a $5,775,000 total benefit in the first 

year of the Reinsurance Arrangement.7

The Department is basing the issuance 

of this proposed exemption based on the 

premise that this $5,775,000 amount 

would reflect the entire direct and 

indirect benefit (including non-net 

income direct or indirect benefits) that 

is expected to be generated from the 

Reinsurance Arrangement. The total 

benefit may increase or decrease from 

year to year, and will reflect a number 

of factors, including the amount of 

claims incurred, reserves set aside for 

claims, expenses, taxes, etc. but the total 

net benefit would not include expenses 

for the enhanced benefits or other 

payments required to be made by Meta 

to or on behalf of participants under the 

exemption. 

This proposed exemption would 

require the qualified independent 

fiduciary to review the Reinsurance 

Arrangement, and to confirm and 

quantify all the benefits generated from 

the Reinsurance Arrangement, such as a 

benefit from a further diversification of 

Ekahi’s risks or tax benefit from the 

reinsurance of corporate risks through a 

captive reinsurance company. Under the 

terms of the exemption, for every dollar 

of net financial benefits that the 

Reinsurance Arrangement is expected to 

generate, the Plan and its participants 

and beneficiaries must receive at least 

51 cents on the dollar and, Ekahi and 

related parties must not receive more 

than 49 cents. 

Department’s Note: The Department 

developed this proposed exemption 

based on the Applicant’s representation 

that Meta, and all related parties 

directly and indirectly related to Meta 

are not expected to receive any benefit 

from the Reinsurance Arrangement 

other than the benefit described herein 

(which must be offset in the manner 

discussed below), which must be 

verified annually by an Independent 

Fiduciary. If Meta or a related party 

directly or indirectly receive any other 

benefit from the captive reinsurance 

arrangement, the benefit must be 

quantified by the Independent Fiduciary 

and included in the Primary Benefit 

Test described below.8 Consistent with 

this condition, the proposed exemption 

would expressly prohibit Meta (or a 

related entity) from, among other things: 

(1) using any participant-related data or 

information that is generated by (or 

derived from) the Reinsurance 

Arrangement in any manner that 

benefits Meta or a related entity; or (2) 

transferring any portion of Ekahi’s 

reserves that is attributable to Plan 

participants’ portion of the Reinsured 

Benefits premiums to Meta or to a 

related entity. 

Benefit to the Plan 

11. Under the proposed exemption, 

Meta would be required to satisfy the 

‘‘Primary Benefit Test’’ as a condition 

for exemptive relief. In other words, for 

every dollar of net financial benefits that 

the Reinsurance Arrangement is 

expected to generate for Meta and its 

related parties, the Plan, its participants 

and beneficiaries must receive at least 

51 cents on the dollar, and Meta and 

related parties may not receive more 

than 49 cents. As described above, in 

the initial year of this proposed 

transaction, Ekahi is estimated to realize 

a benefit (after taxes) increase of 

$5,775,000. At the same time, according 

to the Applicant, Meta would provide 

an immediate and objectively 

determined estimated benefit in the 

form of enhanced benefits to Plan 

participants in the amount of 

$3,854,000.9 In other words, 66.7% of 

the $5,775,000 benefit received by Meta 

will be passed on to Plan participants in 

the form of benefit enhancements worth 

$3,854,000. As discussed in further 

detail below, Meta must pay all costs 

associated with providing the benefit 

enhancements. The cost for providing 

the benefit enhancements cannot be 

factored into the Primary Benefit Test. 

Department’s Note: Both the benefit 

and the cost to Meta from the 

Reinsurance Arrangement are based on 

projections. Therefore, the exemption 

would require the Independent 

Fiduciary to look back over successive 

five-year periods to determine whether 

the Primary Benefit Test has been met 

based on actual results. If the 

Independent Fiduciary finds that the 


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10Under the Plan, the participant’s basic life 

insurance benefit is equal to 300% of their annual 

earnings (as defined in the Plan) up to a maximum 

of $2,000,000. 

11Under the Plan, a participant may enroll in 

supplemental life insurance coverage in an amount 

equal to 100% to 800% of their annual earnings (as 

defined in the Plan) up to a maximum of 

$2,500,000. 

12According to the Applicant, evidence of 

insurability is not required for an individual to 

become insured under the portability option. 

However, if the individual submits such evidence 

and Prudential decides the evidence is satisfactory, 

the individual will pay lower premium rates. 

13As with the above, the Applicant states that, if 

the individual submits acceptable evidence of 

insurability, the individual will pay lower premium 

rates. 

14The Plan’s AD&D death benefit is equal to 

100% of a participant’s basic life insurance benefit. 

Primary Benefit Test has not been met 

during a prior five-year period, Meta 

must immediately implement a 

prospective reduction to the 

participants’ portion of the Plan 

premiums in an amount that is 

sufficient to make up for the shortfall. 

The reduction in participants’ 

premiums should be allocated equally 

across all Plan participant contributions 

toward premiums for Plan benefits, 

regardless of whether the respective 

benefits were reinsured by Ekahi. The 

amount of the prospective reduction 

would be required to include an 

additional payment of interest on the 

shortfall, at the Code’s federal 

underpayment rate set forth in Code 

section 6621(b). Further, Meta would be 

prohibited from reducing any benefits 

provided to Plan participants and 

beneficiaries in connection with its 

implementation of the captive 

reinsurance arrangement. Finally, if the 

Plan’s total annual participant 

premiums for all Plan benefits are 

insufficient to make up the shortfall, 

Meta would be required to make up the 

remaining shortfall by increasing the 

value of enhanced benefits to all 

participants in a monetary value equal 

to the remaining shortfall. These 

additional enhanced benefits would be 

valued by an actuary and approved in 

writing by the Independent Fiduciary. 

Description of Plan Benefit 

Enhancements 

12. In order to satisfy the Primary 

Benefit Test, Meta would be required to 

fund the following Plan benefit 

enhancements (Benefit Enhancements): 

a. Removal of Age Reduction Clause 

Enhancement. The Applicant represents 

that currently basic life insurance, 

optional employee term life coverage, 

optional dependents term life coverage, 

and AD&D benefits have an age 

reduction schedule that reduces a 

participant or beneficiary’s benefit 

based on the age of the participant. 

Under this schedule, the amount of the 

participant or beneficiary’s life 

insurance coverage is reduced from 

100% to 65% when the participant 

reaches the age of 65 and is further 

reduced from 65% to 50% when the 

participant reaches the age of 70. 

The proposed exemption would 

require the removal of the age reduction 

clause for the Plan’s basic life insurance 

benefits, optional life insurance 

coverages and AD&D benefits at no 

additional cost. Under the Removal of 

age reduction clause enhancement, the 

insured would no longer incur 

reductions to the policy’s insurance 

amount when they reach the ages of 65 

and 70. 

b. Enhanced Basic Life Insurance 

Benefit. The Plan’s current basic 

employee term life insurance benefit 

contains an accelerated benefit option 

for qualified terminal illnesses. This 

option allows the payout to the 

participant of 90% of the amount of life 

insurance coverage on the participant’s 

life up to $500,000 before the insured’s 

death.10 If the participant is also 

enrolled in supplemental employee 

term coverage and the accelerated 

payment from the basic life insurance 

did not amount to at least $500,000, 

90% of the amount of the supplemental 

employee term coverage would be 

accelerated until both the basic life 

insurance and the supplemental life 

insurance accumulated to $500,000.11

Under this proposed exemption, the 

Enhanced Basic Life Insurance Benefit 

would increase the accelerated 

insurance payout from 90% to 100% of 

the total amount of coverage up to 

$1,000,000. If the participant is also 

enrolled in supplemental employee 

term coverage and the accelerated 

payment from the basic life insurance 

did not amount to at least $1,000,000, 

100% of the supplemental employee 

term coverage would be accelerated 

until both the basic life insurance and 

the supplemental life insurance 

accumulated to $1,000,000. 

c. Enhanced Basic Life Insurance 

Benefit Portability. Currently, the Plan 

also does not have a portability option 

for its basic life insurance benefit. 

Under the proposed exemption, the Plan 

would provide an enhanced benefit to 

basic life insurance that adds a 

portability option to participants. This 

portability option would allow 

participants to retain coverage without 

regard to their medical conditions when 

they leave Meta’s employment. 

Terminated participants would be 

required to pay premiums for coverage, 

and the premium rates may be higher 

for coverage than the employer’s current 

premium rate.12

d. The Enhanced Accidental Death & 

Dismemberment Benefit Portability 

(AD&D). The Plan offers Accidental 

Death & Dismemberment benefits to 

participants. Currently, this benefit ends 

when a participant’s employment with 

Meta ends. If the exemption is granted, 

Meta will provide a portability 

enhancement that allows participants to 

retain coverage without regard to their 

medical conditions after their 

employment with Meta ends. 

Terminated participants would be 

required to pay premiums for coverage, 

and the premium rates may be higher 

for coverage than the employer’s current 

premium rate.13

e. The Enhanced AD&D Benefit 

Waiver of Premium. Currently, AD&D 

coverage does not include a waiver of 

premium option which grants a waiver 

of AD&D premiums for death benefits 

until the age of 65 for qualifying 

disabled participants that no longer 

work for Meta. If the exemption is 

granted, the Plan benefit would be 

enhanced by allowing former employee 

participants a cessation of premium 

payments and a continuation of death 

benefit coverage for one year, which 

may be renewed on an annual basis up 

to age 65 if the disabled individual is 

determined to continue to be Totally 

Disabled (as defined in the Plan). 

f. The Enhanced AD&D Benefit 

Bereavement Counseling. Currently, the 

Plan’s AD&D benefits do not include 

bereavement and trauma counselling. If 

the exemption is granted, the Plan 

would pay 100% of the cost for 52 

sessions of bereavement and trauma 

counselling relating to AD&D claims up 

to $150 per session that are held within 

a year of the loss. 

g. The Enhanced AD&D Benefit 

Tuition Payments. Currently, the Plan’s 

AD&D benefits do not include benefits 

related to paying a dependent child’s 

tuition upon the death of the 

participant. If the exemption is granted, 

the Plan would pay an annual amount 

equal to the lesser of (1) the actual 

annual amount of the dependent child’s 

tuition (exclusive of room and board); 

(2) 10% of the participant’s AD&D death 

benefit,14 or (3) $25,000. This benefit 

would be payable annually for up to 4 

consecutive years, but not beyond the 

date the child reaches age 26. 

h. The Enhanced AD&D Benefit 

Childcare Payments. Currently, the 

Plan’s AD&D benefits do not include 

benefits related to paying for the 

childcare expenses of a deceased 

participant. If the exemption is granted, 

the Plan would pay childcare expenses 

for qualifying dependent children of a 


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15As defined in the Plan’s policy. 

16An individual’s AD&D benefit under the Plan 

is equal to a percentage of a participant’s basic life 

insurance benefit that depends on the particular 

loss or injury. For example, in the event of a 

participant’s loss of sight in one eye, they would 

receive 50% of their basic life insurance benefit. 

17The Department notes that, pursuant to section 

406(b) of ERISA ‘‘a fiduciary may not use the 

authority, control, or responsibility which makes 

such person a fiduciary to cause a plan to pay an 

additional fee to such fiduciary (or to a person in 

which such fiduciary has an interest which may 

affect the exercise of such fiduciary’s best judgment 

as a fiduciary) to provide a service. Nor may a 

fiduciary use such authority, control, or 

responsibility to cause a plan to enter into a 

transaction involving plan assets whereby such 

fiduciary (or a person in which such fiduciary has 

an interest which may affect the exercise of such 

fiduciary’s best judgment as a fiduciary) will 

receive consideration from a third party in 

connection with such transaction. A person in 

which a fiduciary has an interest which may affect 

the exercise of such fiduciary’s best judgment as a 

fiduciary includes, for example, a person who is a 

party in interest by reason of a relationship to such 

fiduciary described in section 3(14)(E), (F), (G), (H), 

or (I).’’ DOL Regulation 29 CFR 2550.408b-2. Ekahi, 

a party in interest by reason of a relationship to 

Meta described in section 3(14)(G) of ERISA, is an 

entity in which Meta has an interest that may affect 

the exercise of Meta’s best judgment as a fiduciary 

of the Plan. 

qualifying deceased participant in an 

annual amount equal to the lesser of: (1) 

the actual cost charged by the relevant 

Child Care Center 15 per year, (2) 10% of 

the deceased participant’s AD&D death 

benefit, or (3) $24,000. This benefit is 

payable annually for a maximum of four 

consecutive years, but not beyond the 

date the child reaches age 13. If there is 

no dependent child eligible for this 

benefit, a benefit of $1,000 would be 

paid. 

i. Enhanced AD&D Benefit Funeral 

Reimbursement. Currently, the Plan’s 

AD&D benefits do not provide a funeral 

expense reimbursement to beneficiaries 

with AD&D claims. If the exemption is 

granted, the Plan would pay for funeral 

expenses in an amount equal to the 

lesser of: (1) the actual amount of the 

Funeral Expenses, (2) 10% of the 

amount of the deceased participant’s 

AD&D death benefit, or (3) $20,000. 

j. Enhanced AD&D Benefit 

Rehabilitation Payments. Currently, the 

Plan’s AD&D benefits do not include 

benefits relating to monthly 

rehabilitation payments. If the 

exemption is granted, the Plan would 

make a monthly payment equal to the 

lesser of (1) 5% of the amount of the 

participant’s relevant AD&D benefit 16

and (2) $500 for rehabilitation expenses 

for a maximum of 12 consecutive 

months. 

k. Enhanced AD&D Benefit 

Supplemental Mortgage Payment. 

Currently, the Plan’s AD&D benefits 

provide a $1,000 supplemental monthly 

mortgage payment to the spouse or 

domestic partner of a deceased 

participant for up to 12 consecutive 

months. The benefit is paid until the 

first of the following events occur: (1) 

the spouse or domestic partner dies; (2) 

the mortgage is paid in full; (3) the 

house subject to the mortgage is sold; or 

(4) the benefit has been paid for12 

consecutive months. If the exemption is 

granted, the Plan would increase this 

benefit from $1,000 per month to $2,000 

per month. 

l. Enhanced Survivor Income Benefit. 

Currently, the Plan offers a monthly 

survivor income benefit to an 

employee’s spouse or domestic partner 

equal to 50% of the participant’s 

monthly earnings up to a maximum of 

$12,500 per month. The benefit is paid 

continuously until the earlier of (1) 10 

years from date of the insured’s death, 

(2) the spouse or domestic partner’s 

attainment of age 67, or (3) the spouse 

or domestic partner’s death, but in any 

event it is to be provided for a minimum 

of at least 3 years. If the exemption is 

granted, the survivor income benefit 

would be increased to 60% of the 

employee’s monthly earnings for a 

monthly maximum of $15,000. 

m. Enhanced Benefits Education 

Program. Currently, the Plan does not 

offer a benefits education program. If the 

exemption is granted, the Plan would 

provide a benefits education program 

offering the following benefits Life@

Benefits concierge services for Plan 

benefits and well-being resources. 

• EstateGuidance—estate planning 

concierge services. 

• ComPsych—funeral concierge 

services. 

• GuidanceResources—employee 

assistance program (EAP) services, 

financial information resources, legal 

resources, and online informational 

resources. 

• International Medical Group Travel 

Assistance Services—travel support 

services, e.g., medical assistance, 

emergency medical transport, and 

security services. 

ERISA Analysis and Request for Relief 

13. The Applicant requests an 

exemption from ERISA sections 406(a) 

and 406(b) with respect to the 

Reinsurance Arrangement. In this 

regard, Meta is a party in interest with 

respect to the Plan pursuant to ERISA 

section 3(14)(C), because it is an 

employer whose employees are covered 

by the Plan. In addition, the captive 

reinsurer, Ekahi, is a party in interest 

with respect to the Plan pursuant to 

ERISA section 3(14)(G) because it is 

wholly owned by Meta. 

14. ERISA section 406(a) prohibits a 

wide variety of transactions between 

plans and parties in interest. For 

example, ERISA section 406(a)(1)(D) 

prohibits a plan fiduciary from causing 

a plan to engage in a transaction if it 

knows or should know that such 

transaction constitutes a direct or 

indirect transfer to or use by or for the 

benefit of a party in interest, of the 

assets of the plan. The Reinsurance 

Arrangement would violate ERISA 

section 406(a)(1)(D), because the 

Fronting Insurer’s payment of premiums 

to the Captive would constitute the 

indirect transfer of Plan assets to Ekahi, 

a party in interest with respect to the 

Plan. 

15. ERISA section 406(b)(1) prohibits 

a fiduciary from dealing with plan 

assets in its own interest or for its own 

account, and ERISA section 406(b)(3) 

prohibits a fiduciary from receiving any 

consideration for the fiduciary’s 

personal account from any party dealing 

with the plan in connection with a 

transaction involving the plan. The 

Reinsurance Arrangement would violate 

ERISA sections 406(b)(1) and 406(b)(3), 

because the plan fiduciary would cause 

Plan premiums to be paid to Prudential 

with knowledge that Ekahi, an entity 

owned 100% by Meta, would ultimately 

receive compensation as a result.17

16. Therefore, subject to the parties’ 

adherence to the conditions described 

herein, the Department is proposing an 

exemption from ERISA sections 

406(a)(1)(D) and 406(b)(1) and (3) for (a) 

the reinsurance of risks; and (b) the 

receipt of premiums, by Ekahi, in 

connection with insurance contracts 

sold by Prudential (or any successor 

fronting insurer) to the Plan in order to 

provide basic life insurance benefits, 

AD&D benefits, and survivor income 

benefits to Plan participants and 

beneficiaries. 

The Independent Fiduciary 

17. Kathleen Ely, FSA, MAAA, a 

Consulting Actuary with Milliman of 

Windsor, Connecticut will serve as the 

Plan’s qualified independent fiduciary 

(the Independent Fiduciary or 

Milliman) with respect to the 

Reinsurance Arrangement. Ms. Ely 

represents that she and Milliman are 

independent of all parties associated 

with the Reinsurance Arrangement, 

including Meta, Ekahi, and the Plan. In 

this regard, Ms. Ely represents that she 

and Milliman do not have: (a) an 

interest in any party involved in the 

Reinsurance Arrangement; (b) an 

ownership interest in Meta, Ekahi, or 

Prudential (nor are they directly or 

indirectly, controlled by, or under 

common control with them); and (c) any 

economic stake or financial interest that 


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18Under the exemption, the gross income 

Milliman receives from Meta, Honu, Ekahi and 

Prudential in a fiscal year must not exceed two 

percent of Milliman’s gross annual income from all 

sources for that year. 

19ERISA section 410 provides, in part, that 

‘‘except as provided in ERISA sections 405(b)(1) 

and 405(d), any provision in an agreement or 

instrument which purports to relieve a fiduciary 

from responsibility or liability for any 

responsibility, obligation, or duty under this part 

[meaning part 4 of title I of ERISA] shall be void 

as against public policy.’’ 

20Considering that some of the documents 

reviewed by the Independent Fiduciary were draft 

documents and/or documents that are no longer 

current, this proposed exemption requires the 

Independent Fiduciary to re-validate its findings by: 

reviewing the final terms of the exemption; 

obtaining and reviewing all current objective, 

reliable, third-party documentation necessary to 

make the determinations required of the 

Independent Fiduciary under the exemption; and 

confirming in writing that all of the exemption 

terms and conditions have been met (or, due to 

timing requirements, can reasonably be expected to 

be met consistent with the terms of this proposed 

exemption). The Independent Fiduciary must send 

this written confirmation to the Department’s Office 

Continued 

is contingent upon the implementation 

of the Reinsurance Arrangement. 

18. Milliman represents that its only 

financial interest related to the 

Reinsurance Arrangement is in the 

express fees paid for their work as an 

Independent Fiduciary. Ms. Ely 

represents that Milliman’s gross income 

received from Meta, Honu, Ekahi, 

Prudential, and the Plan is less than 0.1 

percent of Milliman’s gross annual 

income from all sources.18 As a 

condition of the exemption, neither Ms. 

Ely nor Milliman may enter into any 

agreement or instrument that violates 

ERISA section 410 or section 2509.75– 

4 of the Department’s regulations.19

Furthermore, the exemption would 

prohibit the Independent Fiduciary 

from entering into any agreement, 

arrangement, or understanding that 

includes any provision that provides for 

the direct, or indirect, indemnification 

or reimbursement of the Independent 

Fiduciary by the Plan or other party for 

any failure to adhere to its contractual 

obligations or to state or Federal laws 

applicable to the Independent 

Fiduciary’s work; or waives any rights, 

claims, or remedies of the Plan under 

ERISA, state, or Federal law against the 

Independent Fiduciary with respect to 

the transaction(s) that are the subject of 

the exemption. Any successor 

Independent Fiduciary appointed to 

represent the interests of the Plan with 

respect to the subject transaction must 

also comply with the independence 

requirements specified herein, and no 

time may elapse between the resignation 

or termination of the former 

Independent Fiduciary and the 

appointment of the successor 

Independent Fiduciary. 

19. The conditions for the exemption 

require the Independent Fiduciary to 

evaluate, monitor, and confirm whether 

or not the terms and conditions of the 

exemption have been satisfied. As 

required by the conditions for the 

exemption, Milliman represents that it 

has, among other things, in full 

accordance with its prudence and 

loyalty obligations under ERISA 

sections 404(a)(1)(A) and (B), reviewed 

a draft of Meta’s application for an 

exemption that was submitted to the 

Department and conducted extensive 

diligence reviews to determine that the 

conditions of the proposed exemption 

would be met. Milliman concluded that, 

based on its review of all relevant 

documents and evidence, all of the 

exemption’s terms and conditions can 

reasonably be expected to be met 

consistent with the terms of this 

proposed exemption. 

Department’s Note. If the Department 

grants an exemption, Milliman’s 

findings would not be current as of the 

exemption’s effective date. Therefore, as 

a condition of the exemption, Milliman 

must engage in another analysis of the 

proposed transactions in full accordance 

with ERISA Section 404(a)(1)(A) and 

(B). As part of this analysis, Milliman 

must review the terms of the exemption 

and verify that it has concluded, based 

on its review of all of the relevant 

documents and evidence, that all of the 

exemption’s terms and conditions have 

been met (or, due to timing 

requirements, can reasonably expected 

to be met consistent with the time 

requirements set forth in this proposed 

exemption)). Milliman must document 

the basis for its conclusions in a written 

report submitted to the Department’s 

Office of Exemption Determinations at 

least 30 days before the Plan engages in 

the reinsurance arrangement. The report 

must include copies of all documents 

and evidence Milliman relied on when 

conducting its review. 

20. For the duration of the 

Reinsurance Arrangement, the 

Independent Fiduciary must: (a) 

monitor, enforce and ensure compliance 

with all conditions of the exemption, 

including all conditions and obligations 

imposed on any party dealing with the 

Plan, throughout the period during 

which Ekahi’s assets are directly or 

indirectly used in connection with a 

transaction covered by the exemption; 

(b) report any instance of noncompliance immediately to the 

Department’s Office of Exemption 

Determinations; (c) monitor the 

transactions covered by the exemption 

on a continuing basis, to ensure the 

transactions remain in the interest of the 

Plan; (d) determine that the Reinsurance 

Transaction is in no way detrimental to 

the Plan and its participants and 

beneficiaries; and (e) take all 

appropriate actions to safeguard the 

interests of the Plan and its participants 

and beneficiaries. Milliman must also 

review all contracts and agreements 

(and any renewal of such contracts) 

relevant to the captive reinsurance 

arrangement and exemption. 

21. Additionally, Milliman must file 

annual certified reports with the 

Department, under penalty of perjury, 

confirming that all of the terms and 

conditions of the exemption have been 

met (including that Meta has not 

reduced or offset any participant 

benefits in relation to its 

implementation and maintenance of the 

Reinsurance Arrangement) and 

explaining the bases for that conclusion. 

22. In order to verify that Meta has 

adhered to the conditions for relief, 

Milliman must have access to all 

relevant documents and evidence. In the 

Department’s view this may include 

(but is not limited to) the captive 

insurance company’s financial 

statements, filings with regulators, 

reports and opinions of actuaries, 

reports describing utilization of 

insurance coverages, and any other 

items showing premiums, claims, 

reserves, and other relevant materials 

which in Milliman’s opinion is 

necessary to validate Meta’s adherence 

to the conditions for relief. Milliman 

must use this information to determine 

ongoing savings and any other benefits 

to the Applicants that result from the 

reinsurance transaction. In addition, 

Milliman must: (1) review all contracts 

(and any renewal of such contracts) of 

the reinsurance of risks and the receipt 

of premiums therefrom by Ekahi and 

determine that the requirements of the 

exemption continue to be satisfied; (2) 

quantify (in dollars) all benefits that 

Meta and its related parties receive from 

the proposed captive reinsurance 

arrangement; and (3) ensure that the 

Plan’s participants receive an additional 

benefit, at Meta’s expense, of an 

amount, and in the manner, required 

under the terms of the exemption. 

23. Independent Fiduciary Analysis. 

Ms. Ely (the Independent Fiduciary), 

provided the Department with two 

independent fiduciary reports, dated 

November 17, 2021, and June 21, 2023, 

and two letters, dated September 15, 

2022, and December 9, 2022 

(collectively, the Milliman Reports). The 

Milliman Reports state that Ms. Ely 

reviewed the following documents: (a) a 

draft application to the Department 

requesting exemptive relief; 20 (b) group 


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of Exemption Determinations at least 30 days before 

Meta engages in the Reinsurance Arrangement. The 

confirmation must include copies of each document 

relied on by the Independent Fiduciary, and a 

description of the steps the Independent Fiduciary 

took to make its confirmation. 

insurance renewal exhibits for 2021 and 

2022 prepared by Prudential and a 

review of the 2021 renewal performed 

by Mercer; (c) a confirmation of the 

insurance coverage effective 1/1/2022 

for a guaranteed period of 24 months; 

(d) a copy of Certificate of Authority 

from the State of Hawaii Insurance 

Division authorizing Honu to transact 

the business of a captive insurance 

company in Hawaii; (e) a copy of Meta 

life insurance certificates; (f) a draft of 

reinsurance agreement between Honu 

and Prudential; (g) Ekahi’s projected 

year one financial results prepared by 

Willis Towers Watson (WTW); (h) 2020 

audited financial statements for Honu; 

(i) Meta’s declaration that no 

commissions will be paid with respect 

to the Reinsurance Arrangement; (j) 

Written confirmation from Paul McNiff 

of WTW that WTW will provide the 

actuarial review of the captive’s life 

insurance reserves after approval of the 

proposed transaction; (k) draft of the 

reinsurance treaty between Ekahi and 

Prudential; (l) 2021 audited financial 

statements for Honu (m) confirmation 

from the State of Hawaii, Department of 

Commerce & Consumer Affairs 

Insurance Division that Honu’s license 

is current and in good standing. 

24. Based on her review of the 

foregoing documents, Ms. Ely stated that 

in the initial year of this proposed 

transaction ‘‘there [would] be an 

immediate and objectively determined 

benefit available to all participants and 

beneficiaries of the Plan who [would] be 

affected by the proposed transaction.’’ 

The Milliman Reports provide 

preliminary estimates with regard to the 

costs that Meta would incur to fund the 

Benefit Enhancements, which are 

discussed below. The incremental 

additional cost would be built into the 

premiums charged by Prudential, so 

variations in the actual benefit amounts 

or the number of people who use a 

benefit will not impact the cost to 

Prudential. The cost to Meta for any 

Benefit Enhancement represents the 

corresponding incremental increase in 

premiums charged by Prudential. The 

participants would bear no portion of 

such incremental increase in premium. 

(a) Enhanced Basic Life Insurance. 

The additional cost to Meta to provide 

the Enhanced Basic Life Insurance 

would be $390,000 annually, 

representing a 3.8% increase to the 

projected annual premium of 

$10,300,000 for the non-enhanced 

benefit. 

(b) Enhanced Accidental Death and 

Dismemberment. The cost to Meta to 

provide the enhanced AD&D would be 

an additional $420,000 annually, 

representing an 8.3% increase to the 

projected annual premium of $5,100,000 

for the non-enhanced benefit. 

(c) Enhanced Survivor Income 

Benefit. The cost of the Enhanced 

Survivor Income Benefit would be an 

additional cost of $2,090,000 to Meta 

annually, representing a 20.5% increase 

to the projected annual premium of 

$10,200,000 for the non-enhanced 

benefit. 

(d) Benefits Education Program. To 

estimate the cost to Meta for the new 

Benefits Education Program, Ms. Ely 

relied on data provided by the 

respective vendors offering services in 

the program (i.e. EstateGuidance, 

ComPsych, International Medical Group 

Travel Assistance Services, and Life@

Benefits and Resources). The prices 

represent fixed costs and do not depend 

on how many employees utilize the 

program. Further, the amount charged 

will be paid by Meta and not passed on 

to participants. The estimated annual 

cost to Meta for this program is 

$954,000. 

25. The Primary Benefit Test: Based 

on the above, Ms. Ely states that a 

reasonable estimate of the expected 

annual costs for Meta to fund the 

Benefit Enhancements would be 

$3,854,000. This includes $390,000 for 

basic life insurance benefit 

enhancements; $420,000 for AD&D 

enhancements; $2,090,000 for survivor 

income benefit enhancements; and 

$954,000 for the Benefit Education 

Program. Given that Ekahi expects to 

realize an increase of $5,775,000 from 

the Reinsurance Arrangement, the 

estimated cost to Meta to fund the 

Benefit Enhancements represents 66.7 

percent of the projected benefit that 

would inure to Meta ($3,854,000/ 

$5,775,000). Thus, Ms. Ely preliminarily 

estimated that the Primary Benefit Test 

would be met in the initial year of the 

Reinsurance Arrangement. 

26. Department’s Note. Even though 

Ms. Ely’s prior findings suggest the 

conditions of the exemption would be 

met, those findings would not be 

current as of the effective date of this 

proposed exemption. Therefore, as the 

Plan’s Independent Fiduciary, Ms. Ely 

must perform an additional review and 

analysis meeting the standards of 

prudence and loyalty in ERISA Section 

404(a)(1)(A) and (B), as well as the terms 

of the exemption, and she must receive 

and review all necessary documents 

required to make her determinations 

hereunder and based on such review, 

conclude that: the majority of the net 

benefits from the proposed Reinsurance 

Arrangement can reasonably be 

expected to inure to the Plan; and all of 

the exemption’s other terms and 

conditions have been met (or, due to 

timing requirements, can reasonably be 

expected to be met consistent with the 

terms and conditions of the proposed 

exemption). This conclusion must be 

submitted to the Department’s Office of 

Exemption Determinations at least 30 

days before the Plan engages in the 

Reinsurance Arrangement. The 

conclusion must include copies of each 

document relied on by Milliman and set 

forth the steps Milliman took to make its 

confirmation. 

27. The Independent Fiduciary is also 

required to file annual certified reports 

to the Department, under penalty of 

perjury, confirming whether all terms 

and conditions of the exemption have 

been met during the year to which the 

annual report relates. The Independent 

Fiduciary must complete each report 

within six months from 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 the exemption) and submit 

it to the Department within 60 days 

thereafter. 

28. Further, the exemption requires 

the Independent Fiduciary to ‘‘look 

back’’ over successive five-year periods 

to determine whether the Primary 

Benefit Test has been met based on 

actual financial results and costs 

incurred by Meta to provide the Plan 

Benefit Enhancements, as opposed to 

the current projections. The 

Independent Fiduciary must provide the 

Department with a written report of the 

actual costs and benefits, along with the 

underlying sources for such data. The 

Department notes that this information 

would be included in the public record. 

The Department is proposing the 

exemption based on its understanding 

that the Independent Fiduciary would 

be able to quantify the necessary 

information based on reliable and 

verifiable information, including 

audited financials and information 

obtained from the unrelated Fronting 

Insurer. The Department retains the 

right to propose a revocation or 

amendment to the exemption if it is 

unable to confirm the reliability of the 

underlying financial data supporting the 

Independent Fiduciary’s ‘‘look-back’’ 

report. Any failure by the Department to 

propose a revocation or amendment to 

the exemption is not an endorsement or 

conclusion by the Department that the 


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conditions of the exemption were, in 

fact, met. 

29. Benefit Enhancements 

Adjustment. Before the end of any fiveyear period and before a ‘‘look-back’’ by 

the Independent Fiduciary, Meta may 

change Benefit Enhancements (e.g., by 

modifying existing Enhancements or 

adding new Enhancements) at its own 

expense to ensure that the Primary 

Benefit Test would be satisfied. The 

exemption requires any modification or 

new Benefit Enhancement to be: (a) 

widely available to all Plan participants 

on an equal basis; (b) approved, in 

advance, by the Independent Fiduciary, 

after the Independent Fiduciary has 

determined that each Benefit 

Enhancement is in the interest of the 

Plan’s participants and beneficiaries and 

widely available to them on an equal 

basis; and the modification otherwise 

meets the operative requirements of the 

exemption. A complete description of 

any new Benefit Enhancement and the 

Independent Fiduciary’s prior 

determination regarding why the new 

enhancement is in the interest of the 

Plan’s participants and beneficiaries 

must be included in the next annual 

Independent Fiduciary report submitted 

to the Department. 

30. Terminating the Captive 

Arrangement. If Meta terminates the 

captive reinsurance arrangement, the 

Independent Fiduciary must determine 

whether the Primary Benefit Test was 

met during the period of time between 

(1) the end of the last five-year period 

for which a Primary Benefit Test ‘‘lookback’’ determination was made by the 

Independent Fiduciary and (2) the 

termination date of the captive 

reinsurance arrangement (the Final 

Term). The Final Term may consist of 

an entire five-year period or the Final 

Term may be less than the five-year 

period if no Primary Benefit Test ‘‘lookback’’ determination has yet been made, 

depending on when Meta terminates the 

arrangement. If, based on the 

Independent Fiduciary’s ‘‘look-back,’’ 

the Primary Benefit Test was not met 

during the Final Term, Meta must 

reduce the participants’ portion of the 

Plan’s premiums in the following year 

by an amount at least equal to the 

amount by which the Final Term 

Primary Benefit Test was not met (the 

Shortfall). The premium reduction must 

benefit all plan participants equally, be 

fully implemented during the course of 

the year following the last year of the 

Final Term, and be verified by the 

Independent Fiduciary. The relief in the 

exemption will terminate at the end of 

the Final Term, as long as all Plan 

participants receive a pro-rata reduction 

in their portion of Plan premiums for all 

Plan benefits. No exemptive relief will 

be available with respect to any covered 

transaction that occurs during the Final 

Term unless and until all participants 

are given premium reductions in the 

manner described above. The premium 

reduction amounts must be verified by 

the Independent Fiduciary and reported 

to the Department as part of the 

Independent Fiduciary’s annual report. 

31. As described above, if the Plan’s 

total annual participant premium 

obligation for all Plan benefits is zero or 

cannot be reduced any more by Meta, 

Meta shall then make up the remaining 

Shortfall by increasing the value of 

Enhanced Benefits to all participants in 

an amount equal to the remaining 

Shortfall. These additional Enhanced 

Benefits must be valued by an actuary 

and approved in writing by the 

Independent Fiduciary as part of the 

Independent Fiduciary’s final written 

report. 

32. If the Shortfall is not corrected 

pursuant to the terms of this exemption, 

then exemptive relief will lapse as of the 

first day of the five-year period to which 

the Shortfall relates. 

33. Department’s Note. 

Notwithstanding a determination by the 

Independent Fiduciary that a Benefit 

Enhancement meets the terms of the 

exemption, the Department may 

propose to revoke or amend the 

exemption to the extent that, among 

other things, the Department determines 

that a Benefit Enhancement is not 

sufficiently protective or in the interest 

of the Plan and its participants and 

beneficiaries. Any failure by the 

Department to propose to modify or 

revoke the exemption is not an 

endorsement or conclusion by the 

Department that the conditions of the 

exemption were, in fact, met. 

Additional Representation and 

Conditions for Relief 

34. Meta represents that Ekahi, as a 

cell company, is a party in interest with 

respect to the Plan based on its 

affiliation with Meta described in ERISA 

section 3(14)(G). Ekahi must comply 

with State licensure and insurance 

regulations to sell insurance or conduct 

reinsurance operations in at least one 

State; must obtain permission from 

Hawaii to transact the business of a 

captive insurance company in Hawaii; 

must pass a financial examination by 

the Insurance Division of Hawaii within 

five years of any reinsurance transaction 

covered by the exemption; must have 

undergone a financial examination by 

an independent certified public 

accountant for the taxable year 

immediately prior to the reinsurance 

arrangement covered by the exemption, 

and must continue to undergo these 

examinations annually throughout the 

duration of the captive insurance 

arrangement. Finally, Ekahi’s 

reinsurance operations must be licensed 

by a State whose law requires an 

independent firm to conduct an 

actuarial review of Ekahi’s reserves and 

require Ekahi to report its reserves to the 

appropriate state authority on an annual 

basis. 

35. The exemption, if granted, 

requires that: (a) neither the Plan nor 

any Plan participant would pay any 

commissions with respect to the direct 

insurance agreement between Meta and 

Prudential and the reinsurance 

agreement between Prudential and 

Ekahi; (b) the formulae used by 

Prudential, or any successor insurer, to 

calculate premiums would be similar to 

the formulae used by other insurers 

providing comparable coverage under 

similar programs that are not captive 

reinsured; (c) the Plan will only contract 

with insurers with a financial strength 

rating of ‘‘A’’ or better from A. M. Best; 

(d) the Plan would pay no more than 

adequate consideration with respect to 

insurance that is part of the captive 

reinsurance arrangement covered by the 

proposed exemption and (e) the 

Reinsurance Arrangement between the 

insurer and Ekahi will be indemnity 

reinsurance only (i.e., the Fronting 

Insurer will not be relieved of any 

liability to the Plan should the reinsurer 

be unable or unwilling for any reason to 

cover any liability arising from the 

reinsurance arrangement). 

36. The exemption, if granted, would 

expressly prohibit Meta (or a related 

entity) from using any participantrelated data or information that is 

generated by (or derived from) the 

proposed captive reinsurance 

arrangement in any manner that benefits 

Meta (or a related entity). Meta could 

not reduce or offset any benefits 

provided to Plan participants and 

beneficiaries in connection with its 

implementation of the proposed captive 

reinsurance arrangement. Further, all 

expenses associated with the exemption 

and the exemption application, 

including any payment to the 

Independent Fiduciary, must be paid by 

Meta and not the Plan. 

37. If the exemption is granted, Meta 

must update the Plan’s Summary Plan 

Description (SPD) within 90 days of 

publishing the exemption and 

conspicuously disclose in the SPD the 

nature of the exemption and an 

explanation of why the underlying 

transaction is prohibited by ERISA 

Section 406. Meta shall distribute the 

revised SPD to all participants and 

beneficiaries within six months of the 


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21Specifically, ERISA section 408(a) provides 

that the Department may not grant an exemption 

unless it finds that the exemption is 

administratively feasible, in the interests of the plan 

and its participants and beneficiaries, and 

protective of the rights of the plan participants and 

beneficiaries. 

publishing of the granted exemption. 

Similarly, if the reinsurance 

arrangement is terminated, Meta must 

update the SPD accordingly and 

distribute the revised SPD within six 

months of the termination. 

38. The exemption, if granted, 

expressly requires Meta and its affiliates 

to maintain all records necessary to 

demonstrate compliance with all of the 

conditions of the exemption for a period 

of six years from the date of any 

prohibited transaction for which the 

exemption provides relief and to 

produce such records within 30 days in 

the event that the Department makes a 

request. 

The Department’s Findings 

39. The Department has the authority 

under ERISA section 408(a) of ERISA to 

grant exemptions from the prohibition 

transaction provisions of ERISA section 

406 if the Department finds that the 

transaction is in the interest and 

protective of the rights of the affected 

plan and its participants and 

beneficiaries and is administratively 

feasible.21 The Departments findings 

required under ERISA section 408(a) are 

discussed below. 

40. The Proposed Exemption is 

‘‘Protective of the Plan.’’ The 

Department has tentatively determined 

that the proposed exemption is 

protective of the rights of Plan 

participants and beneficiaries. In 

addition to the requirements described 

above, no commissions would be paid 

by the Plan with respect to the sale of 

any third-party insurance contract and/ 

or any reinsurance contract, and Meta 

will only contract with insurers with a 

financial strength rating of ‘‘A’’ or better 

from A.M. Best Company or an 

equivalent rating from another rating 

company. 

41. Under the terms of this proposed 

exemption, the Independent Fiduciary 

must review the Reinsurance 

Arrangement, determine and confirm 

the total benefit derived by Meta and 

related parties from the Reinsurance 

Arrangement, and validate that (a) for 

every dollar of net financial benefits that 

the Reinsurance Arrangement generated, 

the Plan, its participants and 

beneficiaries received at least 51 cents 

on the dollar, and Ekahi and related 

parties did not receive more than 49 

cents; (b) the Reinsurance Arrangement 

created real and substantial additional 

benefits for the Plan and its participants; 

and (c) the Reinsurance Arrangement 

did not result in an offset or reduction 

in participants’ other benefits and was 

otherwise consistent with ERISA. 

42. Ms. Ely has confirmed that: (i) she 

has the requisite knowledge regarding 

the Reinsurance Arrangement and 

ERISA to fulfill her duties under ERISA 

section 404 as a prudent and 

independent plan fiduciary; (ii) she will 

monitor the Reinsurance Arrangement 

throughout the duration of the 

exemption; and (iii) the Reinsurance 

Arrangement is consistent with ERISA, 

including the prudence and loyalty 

provisions of ERISA section 404. 

43. The proposed exemption would 

require the independent fiduciary, Ms. 

Ely, to file annual certified reports to the 

Department, under penalty of perjury, 

confirming whether all terms and 

conditions of the exemption have been 

met. She must complete each report 

within six months from the end of the 

12-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 the exemption) and submit 

it to the Department within 60 days 

thereafter. 

44. The Proposed Exemption is ‘‘In 

the Interest of the Plan.’’The 

Department has tentatively determined 

that the proposed exemption would be 

in the interest of the Plan and its 

participants and beneficiaries. Among 

other things, the proposed exemption 

requires that for every dollar of net 

financial benefits that the Reinsurance 

Arrangement is expected to generate, 

the Plan, its participants and 

beneficiaries must receive at least 51 

cents on the dollar, and Ekahi and 

related parties must not receive more 

than 49 cents. 

45. The Proposed Exemption is 

‘‘Administratively Feasible.’’The 

Department has tentatively determined 

that the proposed exemption would be 

administratively feasible, because the 

proposed reinsurance arrangement is 

subject to robust annual reviews by the 

Independent Fiduciary, Ms. Ely, or a 

subsequent qualified independent 

fiduciary, that must be submitted to the 

Department’s Office of Exemption 

Determinations. The exemption also 

requires Meta and its subsidiaries to 

maintain all records necessary to 

demonstrate the conditions have been 

satisfied and provide these documents 

to the Department within 30 days of the 

Department’s request. 

Summary 

46. Based on the conditions that are 

included in this proposed exemption, 

the Department has tentatively 

determined that the relief sought by the 

Applicant would satisfy the statutory 

requirements for an individual 

exemption under ERISA section 408(a). 

Notice to Interested Persons 

Persons who may be interested in the 

publication of this notice in the Federal 

Register include Plan participants and 

beneficiaries. The Applicant will 

provide notification to such interested 

persons via U.S. Postal Service first 

class mail and/or in accordance with the 

Department’s Regulations governing 

electronic disclosures in 29 CFR 

2520.104b-1(c) within twenty-eight (28) 

calendar days after the publication date 

of the Notice in the Federal Register. 

Such mailing will contain a copy of the 

Notice as it appears in the Federal 

Register on the date of publication and 

a copy of the Supplemental Statement 

required, by 29 CFR 2570.43(a)(2), 

which will advise interested persons of 

their right to comment on the proposed 

exemption and request a hearing. The 

Department must receive all written 

comments and requests for a hearing no 

later than fifty-eight (58) days after the 

date the Notice is published in the 

Federal Register. All comments will be 

made available to the public. 

Warning: If you submit a comment, 

EBSA recommends that you include 

your name and other contact 

information in the body of your 

comment, but DO NOT submit 

information that you consider to be 

confidential, or otherwise protected 

(such as Social Security number or an 

unlisted phone number) or confidential 

business information that you do not 

want publicly disclosed. All comments 

may be posted on the internet and can 

be retrieved by most internet search 

engines. 

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 other provisions of ERISA, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of ERISA 

section 404, which, among other things, 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

ERISA section 404(a)(1)(B); 

(2) Before an exemption may be 

granted under ERISA section 408(a), the 


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Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemption, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of ERISA, 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 whether the 

transaction is in fact a prohibited 

transaction; and 

(4) The proposed exemption, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in the 

application are true and complete, and 

that the application accurately describes 

all material terms of the transaction 

which is the subject of the exemption. 

Proposed Exemption 

The Department is considering 

granting this proposed exemption under 

the authority of ERISA section 408(a), 

and in accordance with the procedures 

set forth in 29 CFR part 2570, subpart 

B (75 FR 66637, 66644, October 27, 

2011)). 

Section I. Definitions 

(a) An ‘‘affiliate’’ of Meta, Honu, or 

Ekahi includes: (1) Any person or entity 

who controls Meta, Honu, or Ekahi or is 

controlled by or under common control 

with Meta, Honu, or Ekahi; (2) Any 

officer, director, employee, relative, or 

partner with respect to Meta, Honu, or 

Ekahi; and (3) Any corporation or 

partnership of which the person in (2) 

of this paragraph is an officer, director, 

partner, or employee. 

(b) ‘‘Benefit Enhancements’’ means 

the following Plan benefit 

enhancements, unless adjusted 

consistent with the terms of the 

exemption: 

(1) Removal of Age Reduction Clause 

Enhancement. At no additional cost to 

the Plan’s participants and beneficiaries, 

the Plan’s age reduction clause 

applicable to the Plan’s basic life 

insurance benefits, optional life 

insurance coverages and accidental 

death and dismemberment (AD&D) 

benefits will be removed. Under this 

enhancement, the insured will no longer 

incur a reduction in the amount of 

coverage from 100% to 65% at the age 

of 65; and no longer incur a reduction 

in the amount of coverage from 65% to 

50% at the age of 70. 

(2) Enhanced Basic Life Insurance 

Benefit. The Enhanced Basic Life 

Insurance Benefit would increase the 

accelerated insurance payout for 

qualified terminal illnesses from 90% to 

100% of the policy’s coverage amount 

(up to $1,000,000) before the insured’s 

death. Additionally, the participant or 

beneficiary would receive an increased 

payout if the accelerated payment is less 

than $1,000,000 and he or she is also 

enrolled in supplemental life insurance. 

(3) Enhanced Basic Life Insurance 

Benefit Portability. The enhancement 

would add a portability option for its 

basic life insurance benefit which 

allows participants to obtain another 

Basic Life Insurance Benefit upon 

termination of coverage under the Plan. 

This benefit will be provided without 

regard to participants’ medical 

condition, although they may be 

required to pay higher rates for the 

insurance. 

(4) The Enhanced Accidental Death & 

Dismemberment Benefits (AD&D 

Benefits). (i) The first Enhanced AD&D 

Benefit would add a portability 

enhancement to the Plan that will allow 

participants to pay for a new AD&D 

policy after their employment with Meta 

ends. The insurance would be issued 

without regard to participants’ medical 

conditions but may be offered at higher 

rates. 

(ii) The second Enhanced AD&D 

Benefit would add a new waiver of 

premium enhancement allowing 

qualified disabled former employees a 

waiver of premiums and a continuation 

of death benefit coverage for their AD&D 

coverage while such benefit is extended 

as a result of their total disability (as 

defined in the Plan). 

(iii) The third Enhanced AD&D 

Benefit provides for bereavement and 

trauma counseling sessions after a 

participant experiences a qualifying 

loss. The benefit would pay 100% of the 

cost up to $150 per session for 52 

counseling sessions that are held within 

a year of the loss. 

(iv) The fourth Enhanced AD&D 

Benefit would pay a qualifying 

dependent’s tuition upon the death of a 

participant. This enhancement will 

require the Plan to pay an annual 

amount equal to the lesser of (1) the 

actual annual amount of the dependent 

child’s tuition (exclusive of room and 

board); (2) 10% of the participant’s 

AD&D death benefit; or (3) $25,000. This 

benefit is payable annually for up to 4 

consecutive years, but not beyond the 

date the child reaches age 26. 

(v) The fifth Enhanced AD&D Benefit 

would add the benefit of paying for the 

childcare expenses of a deceased 

participant. If the exemption is granted, 

the Plan will pay an annual amount 

equal to the lesser of: (1) the actual cost 

charged by the relevant Child Care 

Center per year; (2) 10% of the deceased 

participant’s AD&D death benefit; or (3) 

$24,000. The benefit is payable annually 

for a maximum of consecutive years, but 

not beyond the date the child reaches 

age 13. If there is no dependent child 

eligible for this benefit, a benefit of 

$1,000 would be paid. 

(vi) The sixth Enhanced AD&D 

Benefit will pay for qualifying deceased 

persons’ funeral expenses in an amount 

equal to the lesser of: (1) the amount of 

the Funeral Expenses, (2) 10% of the 

amount of the deceased participant’s 

AD&D death benefit, or (3) $20,000. 

(vii) The seventh Enhanced AD&D 

Benefit would add monthly 

rehabilitation payments. The Plan 

would make a monthly payment equal 

to the lesser of (1) five percent of the 

amount of the participant’s relevant 

AD&D benefit and (2) $500 for 

rehabilitation expenses for a maximum 

of 12 consecutive months. 

(viii) The eighth Enhanced AD&D 

Benefit will pay a $2,000 per month 

supplemental monthly mortgage 

payment to the spouse or domestic 

partners of a deceased participant’s 

mortgage until the first of the following 

occurs: (1) the spouse or domestic 

partner dies; (2) the mortgage is paid in 

full; (3) the house subject to the 

mortgage is sold; or (4) the benefit has 

been paid for 12 consecutive months. 

(5) Enhanced Survivor Income 

Benefit. The monthly survivor income 

benefit offered to an employee’s spouse 

or domestic partner will be increased to 

60% of the employee’s monthly 

earnings up to a monthly maximum of 

$15,000, from the current 50% of 

monthly earnings up to a maximum of 

$12,500 per month. 

(6) Benefits Education Program. The 

Plan will offer a new Benefits Education 

Program that will include the following 

components: 

• Life@Benefits service through 

PartnerComm, Inc. 

• EstateGuidance Program. 

• ComPsych Final Arrangements 

Service 

• GuidanceResources Program. 

• International Medical Group Travel 

Assistance Services (IMG Travel). 

(c) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual. 

(d) ‘‘Ekahi’’ means Ekahi Insurance 

Company, LLC, a wholly-owned 

subsidiary of Meta certified by the State 

of Hawaii to operate as a captive 

insurance cell company sponsored by 

Honu. 


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(e) ‘‘Fronting Insurer’’ means 

Prudential or the successor third-party 

insurance company that insures certain 

of the Plan’s risks, and then enters into 

a reinsurance agreement with Ekahi for 

such risks. 

(f) ‘‘Honu’’ means Honu Insurance 

Company, LLC, a wholly-owned 

subsidiary of Meta certified by the State 

of Hawaii to transact business as a 

sponsor captive insurance company. 

(g) ‘‘Independent Fiduciary’’ means 

Ms. Ely of Milliman or a successor 

Independent Fiduciary that is appointed 

to represent the interests of the Plan 

with respect to the subject transaction, 

provided that such person: 

(1) Is not Meta or an affiliate of Meta, 

Honu or Ekahi and does not hold an 

ownership interest in Meta, Honu, Ekahi 

or their affiliates; 

(2) Was not a fiduciary with respect 

to the Plan before its appointment to 

serve as the Independent Fiduciary; 

(3) Has acknowledged in writing that: 

(i) It is a fiduciary and has agreed not 

to participate in any decision with 

respect to 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) 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 

Meta, Honu, or Ekahi, or their affiliates 

for that fiscal year exceeds two percent 

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 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; 

(5) 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 or more 

partner or shareholder may acquire any 

property from, sell any property to, or 

borrow any funds from Meta, Honu, or 

Ekahi, or their affiliates while the 

individual serves as an Independent 

Fiduciary. This prohibition must 

continue for a period of six months after 

either (1) the party ceases to be an 

Independent Fiduciary or (2) the 

Independent Fiduciary negotiates on 

behalf of the Plan during the period that 

such organization or the individual 

serves as an Independent Fiduciary; and 

(6) In the event a successor 

Independent Fiduciary is appointed to 

represent the interests of the Plan with 

respect to the subject transaction, no 

time should elapse between the 

resignation or termination of the former 

Independent Fiduciary and the 

appointment of the successor 

Independent Fiduciary. 

(h) ‘‘Meta’’ means Meta Platforms, Inc. 

(i) ‘‘Plan’’ means the Meta Platforms 

Inc. Health and Welfare Benefit Plan. 

(j) ‘‘Prudential’’ means the Prudential 

Life Insurance Company of America. 

Section II. Covered Transactions 

The exemption would provide relief 

from the prohibited transactions 

provisions of ERISA sections 

406(a)(1)(D), and 406(b)(1) and (b)(3), 

with respect to: (1) the reinsurance of 

risks; and (2) the receipt of premiums, 

by Ekahi, in connection with insurance 

contracts sold by Prudential (or any 

successor Fronting Insurer) to provide 

basic life insurance benefits, AD&D 

benefits, and survivor income benefits 

to Plan participants and beneficiaries. In 

order to receive such relief, the 

conditions in Section III must be met in 

conformance with the definitions set 

forth in Section I. 

Section III. Conditions 

(a) Meta must improve the Plan with 

Benefit Enhancements that are funded 

solely by Meta in accordance with (1) 

through (5) below; 

(1) For every dollar of net financial 

benefits that the Reinsurance 

Arrangement is expected to generate, 

the Plan, its participants and 

beneficiaries must receive at least 51 

cents on the dollar and, Ekahi and 

related parties must not receive more 

than 49 cents, as may be adjusted under 

condition (p) below (the Primary Benefit 

Test); 

(2) The Independent Fiduciary must 

determine whether the Primary Benefit 

Test has been met with respect to each 

successive five-year period covered by 

the exemption. The Independent 

Fiduciary must report its determinations 

as part of the Independent Fiduciary’s 

next annual report. For purposes of the 

initial five-year period, the Independent 

Fiduciary may test only the costs and 

benefits that inure to Meta and/or 

parties directly or indirectly related to 

Meta during years two through five of 

the initial five-year period; 

(3)(A) If the Primary Benefit Test has 

not been met with respect to a five-year 

period, Meta must reduce the 

participants’ portion of the Plan’s 

premium in the next consecutive year 

by an amount that is at least equal to the 

amount by which the prior five-year 

Primary Benefit Test was not met, plus 

an additional payment of interest on the 

shortfall, at the Code’s federal 

underpayment rate set forth in Code 

section 6621(b) (such amount, as 

increased by interest, is referred to as 

the ‘‘Shortfall’’). The reduction in 

participants’ premiums should be 

allocated equally across all Plan 

participant contributions toward 

premiums for Plan benefits, regardless 

of whether the respective benefits were 

reinsured by Ekahi. The premium 

reduction must be fully implemented 

during the course of the year following 

the last year of the five-year period to 

which it relates, and be verified by the 

Independent Fiduciary; 

(B) if the Plan’s total annual 

participant premiums for all Plan 

benefits are less than the Shortfall in the 

year following the aforementioned fiveyear period, Meta shall eliminate all 

annual participant contribution 

premiums toward all Plan benefits to 

cover as much of the Shortfall as 

possible. Meta shall then make up the 

remaining Shortfall by increasing the 

value of enhanced benefits to all 

participants in a monetary value equal 

to the remaining Shortfall. These 

additional enhanced benefits must be 

valued by an actuary and approved in 

writing by the Independent Fiduciary; 

(4) If the captive reinsurance 

arrangement is terminated, the 

Independent Fiduciary must determine 

whether the Primary Benefit Test was 

met during the period of time between 

(A) the end of the last five-year period 

for which a Primary Benefit Test 

determination was made by the 

Independent Fiduciary, or if no Primary 

Benefit Test determination has yet been 

made, the beginning of the captive 

reinsurance arrangement, and (B) the 

termination date of the captive 

reinsurance arrangement (the Final 

Term). If the Primary Benefit Test was 

not met during the Final Term, Meta 

must address the Shortfall in 

accordance with Section III(a)(3)(A)–(B) 

above. Relief in the exemption does not 

extend to prohibited transactions 

described in the exemption that occur 

during the Final Term unless the 

requirements in Section III(a)(1) through 

(3) have been met with respect to such 

Final Term. Furthermore, the 

Independent Fiduciary must ensure 

Meta’s obligations under Section 

III(a)(3)(A)–(B) were properly 

implemented to address the Shortfall, 

notwithstanding that the captive 

reinsurance arrangement has already 

been terminated; and 


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(5) If the Shortfall is not corrected 

pursuant to the terms of this exemption, 

then this exemption’s relief will lapse as 

of the first day of the five-year period to 

which the Shortfall relates. 

(b) The Plan must pay no 

commissions with respect to its 

purchase of insurance contracts to 

provide the benefits which are reinsured 

under the exemption, or with respect to 

the reinsurance of such contracts; 

(c) In each year of coverage provided 

by a Fronting Insurer, the formulae used 

by the Fronting Insurer to calculate 

premiums will be similar to formulae 

used by other insurers providing 

comparable life insurance coverage 

under similar programs. Furthermore, 

the premium charges calculated in 

accordance with the formulae will be 

reasonable and 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) No amount of Ekahi’s reserves that 

are attributable to premiums paid for 

Plan benefits may be transferred to Meta 

or a related party; 

(e) Ekahi, the captive reinsurer, must: 

(1) Be a party in interest with respect 

to the Plan based on its affiliation with 

Meta that is described in ERISA section 

3(14)(G); 

(2) Be licensed to sell insurance or 

conduct reinsurance operations, or be a 

cell corporation that is legally allowed 

to rely on the license of a sponsoring 

captive insurance company, in at least 

one state, as such term is defined in 

ERISA section 3(10); 

(3) Have obtained a Certificate of 

Authority from the state of Hawaii 

authorizing Ekahi to transact the 

business of a captive insurance 

company in Hawaii or legally rely on a 

sponsoring captive insurance company’s 

valid Certificate of Authority from the 

state of Hawaii authorizing Ekahi to 

transact the business of a captive 

insurance company in Hawaii. Such 

certificate must not have been revoked 

or suspended; 

(4)(A) Undergo and pass a financial 

examination (within the meaning of the 

law of its domiciliary state, Hawaii) by 

the Insurance Division of Hawaii within 

five years of the year in which the 

reinsurance transaction occurred; and 

(B) Have undergone, and 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 Arrangement covered 

by the exemption; and 

(5) Be licensed to conduct reinsurance 

transactions or legally rely on a 

sponsoring captive insurance company’s 

license to conduct reinsurance 

transactions by a state whose law 

requires that an actuarial review of 

reserves 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(d), (the 

Independent Fiduciary) to analyze the 

transactions covered by the exemption, 

and render an opinion that the 

requirements of the exemption have 

been satisfied; 

(g) The Independent Fiduciary must: 

(1) In compliance with the fiduciary 

obligations of prudence and loyalty 

under ERISA Sections 404(a)(1)(A) and 

(B), review the terms of the exemption, 

engage in a prudent and loyal analysis 

of the covered transactions, and 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, 

due to timing requirements, can 

reasonably be expected to be met 

consistent with the terms of this 

proposed 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 bases for its 

conclusion; 

(2) Monitor, enforce and ensure 

compliance with all conditions of the 

exemption including all conditions and 

obligations imposed on any party 

dealing with the Plan, throughout the 

period during which Ekahi’s assets are 

directly or indirectly used in connection 

with a transaction covered by the 

exemption; 

(3) Report any instance of noncompliance 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, its 

participants and beneficiaries; 

(6) Review all contracts pertaining to 

the Reinsurance Arrangement, and any 

renewals of such contracts, to determine 

whether the requirements of this 

proposed exemption and the terms of 

Benefit Enhancements continue to be 

satisfied; 

(7) Determine that the Reinsurance 

Arrangement is in no way detrimental to 

the Plan and its participants and 

beneficiaries; 

(8) Provide an annual report to the 

Department, under penalty of perjury, 

certifying that each term and condition 

of the exemption is satisfied and setting 

forth the bases for the certification. Each 

report must be completed within six 

months after the end of the twelvemonth 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 the exemption) and 

submitted to the Department within 60 

days thereafter. The relevant report 

must include all of the objective data 

necessary to demonstrate that the 

Primary Benefit Test has been met; and 

(9) Confirm in its annual report (and 

describe the steps taken to confirm) that 

Meta has not reduced or offset any 

participant benefits in relation to its 

implementation and maintenance of the 

captive reinsurance arrangement as 

required by paragraph (k) below; 

(h) The Independent Fiduciary must 

not (1) enter into any agreement or 

instrument that violates ERISA section 

410 or section 2509.75–4 of the 

Department’s regulations, or (2) enter 

into any agreement, arrangement, or 

understanding that includes any 

provision that provides for the direct, or 

indirect, indemnification or 

reimbursement of the Independent 

Fiduciary by the Plan or other party for 

any failure to adhere to its contractual 

obligations or to state or Federal laws 

applicable to the Independent 

Fiduciary’s work, or waives any rights, 

claims, or remedies of the Plan under 

ERISA, state, or Federal law against the 

Independent Fiduciary with respect to 

the transaction(s) that are the subject of 

the exemption; 

(i) Neither Meta nor any affiliate may 

use participant-related data or 

information generated by, or derived 

from, the Reinsurance Arrangement in a 

manner that benefits Meta or any 

affiliated entity; 

(j) All the facts and representations set 

forth in the Summary of Facts and 

Representation must be true and 

accurate; 

(k) Meta will not offset or reduce any 

benefits provided to Plan participants 

and beneficiaries in connection with its 

implementation of the captive 

reinsurance arrangement in order to 

defray the costs, expenses, or 

obligations of complying with the 

exemption; 


lotter on DSK11XQN23PROD with NOTICES1
92174 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 

(l) The Plan will only contract with a 

Fronting Insurer that is unrelated to 

Meta or any of its affiliates, 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 Meta or any of 

its affiliates in whole or in part; 

(m) The Plan pays no more than 

adequate consideration with respect to 

insurance that is part of the captive 

reinsurance arrangement covered by the 

proposed 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; 

(o) All expenses associated with the 

exemption and the exemption 

application, including any payment to 

the Independent Fiduciary, must be 

paid by Meta and not the Plan; 

(p) Meta may adjust the Benefit 

Enhancements to the Plan at any time, 

if such adjustment is approved in 

advance by the Independent Fiduciary 

after the Independent Fiduciary first 

determines that each adjusted Benefit 

Enhancement is in the interest of the 

Plan’s participants and beneficiaries and 

available to them on an equal basis. The 

cost incurred by Meta to fund the 

Benefit Enhancement may be used to 

determine whether the Primary Benefit 

Test has been met, but may not be 

considered to address a Shortfall if the 

Primary Benefit Test has not been met 

with respect to a five-year period, unless 

in accordance with Section III(a)(3)(A)- 

(B). A complete description of any new 

Benefit Enhancements and the 

Independent Fiduciary’s rationale and 

determinations regarding such 

enhancements must be included in the 

next Independent Fiduciary report 

submitted to the Department; 

(q) The Reinsurance Arrangement 

between Ekahi and Prudential or any 

successor Fronting Insurer must be 

indemnity insurance only. The 

arrangement must not relieve a Fronting 

Insurer from any responsibility or 

liability to the Plan, including liability 

that would result if Ekahi fails to meet 

any of its contractual obligations to 

Prudential or any successor Fronting 

Insurer under the Reinsurance 

Arrangement. Further, the executed 

reinsurance contract between the 

Fronting Insurer and Ekahi will 

expressly state (by rider, addendum, 

amendment, etc.) that, in the event that 

Ekahi is insolvent, unable or unwilling 

to pay any claims, or otherwise 

prevented from paying any claims, the 

Fronting Insurer remains solely 

obligated to pay any claim properly 

incurred by the Plan and its participants 

and beneficiaries; 

(r) If the exemption is granted, the 

Plan document and Summary Plan 

Description (SPD) will be revised within 

90 days after the final exemption is 

published in the Federal Register to 

include a summary of the reinsurance 

arrangement, an explanation why the 

arrangement constitutes a transaction 

prohibited by ERISA (including an 

explanation of why Ekahi is a party in 

interest). The revision must also state 

that the Plan is currently relying on an 

individual prohibited transaction 

exemption granted by the U.S. 

Department of Labor. The revision to the 

Plan and SPD must be conspicuously 

displayed and not contained in a 

footnote. The Plan Administrator must 

distribute the updated SPD to all Plan 

participants within six months of the 

publishing of the granted exemption. 

(s) If the Reinsurance Arrangement is 

terminated the Plan Administrator will 

revise and update the SPD accordingly. 

The Plan Administrator will then 

distribute the updated SPD to all Plan 

participants within six months of the 

termination of the Reinsurance 

Arrangement. 

(t) Meta, and its affiliates, must 

maintain all the records necessary to 

demonstrate the conditions of the 

exemption have been met with respect 

to all the prohibited transactions 

described in this exemption, for a 

period of six years from the date of any 

prohibited transaction for which the 

exemption provides relief. Meta must 

provide these records to the Department 

within 30 days from the date the 

Department requests these records. 

Applicability Date: This exemption 

will be in effect for the period beginning 

on the date of publication in the Federal 

Register. 

Signed at Washington, DC, this this 15th 

day of November 2024. 

George Christopher Cosby, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2024–27260 Filed 11–20–24; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Agency Information Collection 

Activities; Submission for OMB 

Review; Comment Request; Definition 

and Requirements for a Nationally 

Recognized Testing Laboratory 

ACTION: Notice of availability; request 

for comments. 

SUMMARY: The Department of Labor 

(DOL) is submitting this Occupational 

Safety & Health Administration (OSHA)- 

sponsored information collection 

request (ICR) to the Office of 

Management and Budget (OMB) for 

review and approval in accordance with 

the Paperwork Reduction Act of 1995 

(PRA). Public comments on the ICR are 

invited. 

DATES: The OMB will consider all 

written comments that the agency 

receives on or before December 23, 

2024. 

ADDRESSES: Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to www.reginfo.gov/public/do/ 

PRAMain. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. 

FOR FURTHER INFORMATION CONTACT: 

Nicole Bouchet by telephone at 202– 

693–0213, or by email at DOL_PRA_

PUBLIC@dol.gov. 

SUPPLEMENTARY INFORMATION: A number 

of standards issued by the OSHA 

contain requirements for equipment, 

products, or materials. These standards 

often specify that employers use only 

equipment, products, or material tested 

or approved by a Nationally Recognized 

Testing Laboratory. This requirement 

ensures that employers use safe 

equipment, products, or materials in 

complying with the standards. 

Accordingly, OSHA promulgated the 

regulation 29 CFR 1910.7, ‘‘Definition 

and Requirements for a Nationally 

Recognized Testing Laboratory.’’ The 

Regulation specifies procedures that 

organizations must follow to apply for, 

and to maintain, OSHA’s recognition to 

test and certify equipment, products, or 

material for this purpose. For additional 

substantive information about this ICR, 

see the related notice published in the 

Federal Register on August 1, 2024 (89 

FR 62803). 

Comments are invited on: (1) whether 

the collection of information is 

necessary for the proper performance of 

the functions of the Department, 

including whether the information will 


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