delivered the opinion of the Court.
This сase involves a claim for benefits under a policy of group health insurance written by The Guardian Life Insurance Company of America (Guardian), a New York corporation licensed to do business in Maryland. The policy covers employees of Data Technology Industries, Inc. (DTI), a Maryland corporation with its principal place of business in this State. The basic issue is whether charges incurred by two DTI employees for outpatient mental health treatment — charges not covered under the terms of the Guardian policy — must nevertheless be paid by the insurer because of the provisions of Maryland Code (1957, 1979 Repl. Vol.), Art. 48A (the Insurance Code), § 477E, which mandate the inclusion of coverage for such outpatient treatment in every group health insurance policy "delivered or issued for deliverance” in Maryland. Guardian declined to pay the charges, contending that the policy was issued and delivered in Rhode Island, and consequently it was required to make payment only to the extent that the outpatient charges were covered by the benefit provisions of the policy.
1
The Maryland Insurance Commissioner, and on appeal from his ordеr, the Baltimore City Court, concluded that Guardian
I
"Group health insurance” is defined in § 471 of the Insurance Code as "that form of health insurance covering groups of persons [as thereafter defined in seven subsections] .. . and issued upon the following basis:
(1) •• •
(2) ...
(3) Under a policy issued to the trustees of a fund established by two (2) or more employers in the same or related industry .. ., which trustees shall be deemed the policyholder, to insure employees of the employers . . . .”
Section 472 requires that "[e]ach such group health insurance policy” contain a provision, among others:
"that the insurer will furnish to the policyholder for delivery to each employee or member of the insured group, a statement in summary form of the essential features of the insurance coverage of such employee or member and to whom benefits thereunder are payable.”
II
The record discloses that on March 27, 1967, a trust agreement was executed between Guardian, as settlor of the trust, and the Rhode Island Hospital Trust Company (the Bank), as trustee. The stated purpose of the agreement was to implement "a group insurance plan for the benefit of employees of employers who become participants in accordance with the terms ... [of the trust agreement] through the utilization of an insurance fund created by the participants . . . .” Article II of the trust agreement entitled "Creation of the insuranсe fund by participants,” identified the "participants” as those employers in the services industry who agreed in writing to be bound by the agreement’s provisions and who were approved by Guardian for insurance coverage under a group insurance policy "held by the trustee.” By its terms, the trust agreement required each participating employer to pay into the insurance fund, either to the trustee, or to Guardian if the trustee appointed the insurer as its collection agent, amounts sufficient to pay premiums for the insurance coverage acquired, together with an alloсable share of the trustee’s administrative charges. The agreement specified that the trustee accepted the trust in Rhode Island and that all questions pertaining to its validity, construction and administration would be determined in accordance with the law of Rhode Island. Title to the insurance fund under the agreement was vested in the
On June 1,1967, Guardian issued Group Insurance Policy No. 1 (the master policy), identifying the "policyholder” as the Bank acting as "Trustees of the Services Industry Insurance Trust Fund.” The master policy states on its cover page that it was delivered in Rhode Island and is governed by the laws of that state; that premiums are payable by the "policyholder” and that benefits are as specified "in the employer rider applicable to each participating employer”; that "[a]n eligible employer may become a participating employer by filing, through the trustees, with the home office of the insurance company, an agreement executed by the employer adopting the terms of the trust agreement and by receiving the insurance company’s approval, in writing, of its inclusion as a participating employer”; and that the employer becomes a "participating employer” in accordance with the terms of the employer rider, which forms a part of the master policy and which "contains details of the plan of insurance pertaining to the employees of ... [the] participating employer.” The master policy provides under the heading "Schedule of Insurance and Premium Rates” that "[t]his group policy, togethеr with any amendments thereto, contains all the insurance coverages which may be provided by the employer rider.” Under heading of "The Contract” the policy specifies that it, and any riders and amendments thereto, "and the application of the pol
On February 21, 1973, DTI, having been solicited by a licensed Guardian agent in Maryland, completed an application for group health insurance on a form prepared by Guardian. The application contained a section entitled "Request for Participation hi a certain trust agreement dated March 27,1967”; the "request” was addressed to the Bank as trustee. It stated that DTI was engaged in the services industry and sought approval as a participant "in the Fund established by other Employers engaged in the same industry fоr the purpose of purchasing insurance for the benefit of their employees and requests the Trustee to apply to ... Guardian ... for inclusion under the Group insurance policy(s) issued to the Trustee for the plan(s) of insurance shown in Section 1....” DTI agreed in its application, among other things, to be bound by all terms of the trust agreement, all amendments thereto, and by all provisions of the policy issued to the trustees. In a section of the application marked "Home Office use only,” appears this statement: "Policy governed by the laws of the State of Rhode Island.”
Guardian issued аn "Employer Rider” to DTI, effective June 1, 1973, setting forth the details of the plan of group health insurance which DTI had selected. The rider identified the "policyholder” as the trustee of the insurance
Ill
Upon Guardian’s refusal to pay the Foundation for outpatient mental health treatment rendered to the DTI employees, the Foundation filed a complaint with the Maryland Insurance Commissioner. It claimed that Guardian’s limited outpatient benefits did not comply with the mandated coverage provisions of § 477E of the Insurance Code which were applicable to policies of group health insurance "delivered or issued for deliverance” to any person in this State. Guardian defended the claim on the ground that the coverage afforded to DTI’s employees was based upon a policy issued to "trustees of a fund established by two (2) or more employers in the same or related industry,” as authorized by § 471 (3); that this section provided that the "trustees shall be deemed the policyholder”; that because the policy was delivered to the trustees in Rhode Island, it was not "delivered or issued for deliverance” in Maryland, and therefore the mandated coverage provisions of § 477E had no application to the Guardian policy.
At the evidentiary hearing before the Commissioner, the testimony of Robert Dobbins, Vice Prеsident of Guardian, was introduced. He indicated that Guardian had been writing group coverage in the form of multiple employer trust policies since 1964; that Guardian maintains 26 such trust plans throughout the country, with Rhode Island Hospital Trust Company acting as trustee in each instance "because of [its] expertise in handling trusts”; and that in Maryland approximately 376 employers obtained coverage
Dobbins testified that the master policy is not delivered to the participating employer, but only to the trustee as the policyholder. According to Dobbins, an employer receives only a "participation rider,” which he referred to as the "policy” for the participating employer. He acknowledged that the benefits and coverages are set forth in the employer rider which is in effect tailored to meet the needs of each individual employer.
Dobbins admitted that the trustee in the present cаse performs no administrative duty other than to serve as the holder of the master policy, for which it receives $450 annually. He stated that the trustee appointed Guardian as its collection agent and that all premiums are paid by the employers directly to the insurer. Dobbins acknowledged that Guardian’s "in house” documents and internal memos indicate that DTI, and not the trustee, was the "policyholder” of Group Policy G-22970-I, which was delivered in Maryland. He stated, however, that the terminology used in these internal documents was not an accurate reflection of what actually oсcurred because the master policy, which is controlling, was not issued or delivered in Maryland, but in Rhode Island.
On appeal, the Baltimore City Court (Greenfeld, J.) concluded that the trust and trust fund were illusory because the trustee’s only function was to hold the master policy, while Guardian solicited the employers, issued the employer riders, billed for and collected the premiums, and handled all inquiries and claims — that "[a]ll of the work attendant to the insurance is done exclusively by Guardian.” The court said that the legislature, in enacting § 471 (3), did not intend "to permit the creation of a totally non-functioning trust as a means to avoid regulation by the State insurance commissioner.” It stated:
"The preferred status given to multiple employer group health insurance trusts but not to other multiple employer group health insurance plans which also use a master policy device clearly indicates a legislative intent that the trustee plan must be one of substance rather than form.”
IV
In urging reversal of the judgment below, Guardian places reliance upon cases which espouse the gеneral principle that the law governing a contract of group health insurance is that of the state where the master policy is delivered.
See, e.g., Boseman
v.
Connecticut General Life Ins. Co.,
"the written instrument in which the contract of insurance is set forth, and includes all clauses, riders, endorsements and papers attached thereto or made a part thereof.”
The lower court was also wrong, Guardian argues, in concluding that the trust was illusory because the trustee’s only duty was to hold the master policy in Rhode Island. Guardian contends that nowhere in the provisions of § 471 (3) is there any requirement that the trustee perform any particular duties. Guardian argues that to engraft any such requirement upon the statutory language, as was done by the lower court, violates the rule of statutory construction that inhibits courts from inserting language into a statute to make it express an intention not in accord with the literal meaning of the enactment. Guardian maintains that the lower court improperly viewed multiple employer trusts as a suspect form of coverage, notwithstanding their explicit approval in § 471 (3). Guardian acted pursuant to the provisions of § 471 (3), it claims, not to avoid state regulation but rather in full compliance with it.
Guardian contends that the different wording of these Subtitle 26 sections clearly demonstrates the legislative intention to limit the availability of mandated benefits in some instances but not in others, based upon,
inter alia,
where the policy, or certificate, was delivered or to whom the
V
Guardian’s arguments, although well constructed and well presented, cannot prevail on the record in this case. Simрly because a multiple employer trust is eligible for group health insurance under § 471 (3), and an out-of-state entity is authorized by that section to act in a trust capacity as the policyholder, is not alone determinative of whether, in the contemplation of the Insurance Code, the trust is one of substance or whether the policy issued to the trustee on behalf of the insured parties was "delivered” or "issued” for delivery in this State. As we have said countless times, the cardinal rule of statutory construction is to ascertain and carry out the legislative intention.
Vallario
v.
State Roads Comm’n,
As previously indicated, the public policy of this State, as set forth in § 377A of the Insurance Code, prohibits the delivery in Maryland of any health insurance policy which contains a provision that the policy is governed by the laws of another state or that the insured’s rights and obligations are governed by other than the laws of Maryland. Manifestly, this clear expression of the public policy of the State wаs designed to protect Maryland citizens in their dealings with insurance companies. In light of this policy, we think it self-evident that the legislature did not intend in § 471 (3) to sanction a practice by insurance companies which would permit foreign rather than Maryland law to govern group health contracts written for Maryland employers and insuring Maryland employees by the simple expedient of having the master policy delivered to an out-of-state entity functioning, in effect, as the agent or alter ego of the insurance company itself.
That which necessarily is implicit in a statute is as much a part of it as that which is expressed.
Williams and Ful wood v. Director,
It is conceded that Rhode Island has no laws applicable to or regulatory of group health insurance contracts. This fact, rather than the claimed "expertise” of the Rhode Island trustee, seemingly dictated the insurer’s unilateral choice of the trustee, since Guardian admits that the trustee performs no administrative functions beyond acting as the recipient of the master policy. In effect, therefore, the trustee is little more than a "maildrop” in furtherance of a marketing device contrived by Guardian, of no benefit to the participating employers for whom the trust was established. The trust, therefore, is essentially one in name only, an artifice which serves no legitimate purpose in reducing the cost of administering the insurance plan for the participating employer because Guardian itself performs all the administrative duties, including by delegation from the trustee, the collection of all premiums for inclusion in the trust fund. In actuality, because Guardian itself is in total control of the trust and trust fund, the trustee is, at best, an entity without substance and cannot therefore function as the "policyholder” under the provisions of § 471 (3).
The master policy was initially delivered to the Rhode Island trustee in 1967. That document merely listed the available benefits offered by the insurer, together with the general terms and conditions upon which the insurance could be obtained by participating employers. In its original form, therefore, the master policy did not insure anyone, not being within the definition of "insurance” as set forth in § 2 of the Insurance Code, i.e.:
" 'Insurance’ is a contract whereby one undertakes to indemnify another or pay or provide a specified or determinable amount or benefit upon determinable contingencies.”
Judgment affirmed, with costs.
Notes
. Section 477E then required outpatient benefits for mental health treatment to be provided "at a rate which is not less than 50 percent of the benefits which the policy provides for other types of illness.” The Guardian policy did not comply with this minimum coverage standard.
. Section 378 of the Insurance Code provides:
"Any insurance policy, rider, or endorsement hereafter issued and otherwise valid which contains any condition or provision not in compliance with the requirements of this article, shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this article.”