1 STATE OF OKLAHOMA
1
2 1st Session of the 59th Legislature (2023)
2
3 SENATE BILL 553 By: Montgomery
3
4
4
5
5
6 AS INTRODUCED
6
7 An Act relating to the Third-party Administrator Act;
7 amending 36 O.S. 2021, Section 1450, which relates to
8 licensure; removing requirement for certain applicant
8 to submit certain documentation; requiring certain
9 applications and fees to be submitted and paid
9 electronically; requiring renewal fee prior to
10 reinstatement of certain license; providing renewal
10 procedure for certain expired license; requiring
11 certain report from expired licensees; conforming
11 language; requiring certain updates to administrator
12 information by certain date; requiring certain
12 administrator respond to certain inquiries by certain
13 date; and providing an effective date.
13
14
14
15
15
16 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
16
17 SECTION 1. AMENDATORY 36 O.S. 2021, Section 1450, is
17
18 amended to read as follows:
18
19 Section 1450. A. No person shall act as or present himself or
19
20 herself to be an administrator, as defined by the provisions of the
20
21 Third-party Administrator Act, in this state, unless the person
21
22 holds a valid license as an administrator which is issued by the
22
23 Insurance Commissioner.
23
24
24
Req. No. 401 Page 1
 1 B. An administrator shall not be eligible for a nonresident
1
2 administrator license under this section if the administrator does
2
3 not hold a home state certificate of authority or license in a state
3
4 that has adopted the Third-party Administrator Act or that applies
4
5 substantially similar provisions as are contained in the Third-party
5
6 Administrator Act to that administrator. If the Third-party
6
7 Administrator Act in the administrator’s home state does not extend
7
8 to stop-loss insurance, but if the home state otherwise applies
8
9 substantially similar provisions as are contained in the Third-party
9
10 Administrator Act to that administrator, then that omission shall
10
11 not operate to disqualify the administrator from receiving a
11
12 nonresident administrator license in this state.
12
13 1. “Home state” means the United States jurisdiction that has
13
14 adopted the Third-party Administrator Act or a substantially similar
14
15 law governing third-party administrators and which has been
15
16 designated by the administrator as its principal regulator. The
16
17 administrator may designate either its state of incorporation or its
17
18 principal place of business within the United States if that
18
19 jurisdiction has adopted the Third-party Administrator Act or a
19
20 substantially similar law governing third-party administrators. If
20
21 neither the administrator’s state of incorporation nor its principal
21
22 place of business within the United States has adopted the Third-
22
23 party Administrator Act or a substantially similar law governing
23
24 third-party administrators, then the third-party administrator shall
24
Req. No. 401 Page 2
 1 designate a United States jurisdiction in which it does business and
1
2 which has adopted the Third-party Administrator Act or a
2
3 substantially similar law governing third-party administrators. For
3
4 purposes of this paragraph, “United States jurisdiction” means the
4
5 District of Columbia or a state or territory of the United States.
5
6 2. “Nonresident administrator” means a person who is applying
6
7 for licensure or is licensed in any state other than the
7
8 administrator’s home state.
8
9 C. In the case of a partnership which has been licensed, each
9
10 general partner shall be licensed and shall qualify therefore as
10
11 though an individual licensee. The Commissioner shall charge a full
11
12 additional license fee and a separate license shall be issued for
12
13 each individual so named in such a the license. The partnership
13
14 shall notify the Commissioner within thirty (30) days if any
14
15 individual licensed on its behalf has been terminated, or is no
15
16 longer associated with or employed by the partnership. Any person
16
17 making application as an administrator or currently licensed as an
17
18 administrator under the Third-party Administrators Act shall provide
18
19 a National Association of Insurance Commissioner (NAIC) Biographical
19
20 Affidavit and a comprehensive review of the background report by an
20
21 independent third-party NAIC-approved vendor as required for
21
22 domestic insurers pursuant to the insurance laws of this state.
22
23 D. An application for an administrator’s license shall be in a
23
24 form prescribed by the Commissioner and shall be accompanied by a
24
Req. No. 401 Page 3
 1 fee of One Hundred Dollars ($100.00). The application shall be
1
2 filed and the fee shall be paid electronically in a form and manner
2
3 prescribed by the Commissioner. This fee shall not be refundable if
3
4 the application is denied or refused for any reason by either the
4
5 applicant or the Commissioner.
5
6 E. The administrator’s license shall continue in force no
6
7 longer than twelve (12) months from the original month of issuance.
7
8 Upon filing a renewal form prescribed by the Commissioner,
8
9 accompanied by a fee of One Hundred Dollars ($100.00), the license
9
10 may be renewed annually for a one-year term. Late application for
10
11 renewal of a license shall require a fee of double the amount of the
11
12 original license fee. The renewal shall be filed, and the fee shall
12
13 be paid electronically in a form and manner prescribed by the
13
14 Commissioner. A license that expires for failure to submit a
14
15 renewal application may be reinstated within ninety (90) days after
15
16 the expiration date by electronically submitting a fee in an amount
16
17 of Two Hundred Dollars ($200.00) in a form and manner prescribed by
17
18 the Commissioner and any other transaction or fees deemed necessary
18
19 by the Commissioner. All applications received more than ninety
19
20 (90) days following the expiration of a license shall include a
20
21 detailed report of administrator services provided in this state
21
22 during the period of expired licensure. The administrator shall
22
23 submit, together with the application for renewal, a list of the
23
24 names and addresses of the persons with whom the administrator has
24
Req. No. 401 Page 4
 1 contracted in accordance with Section 1443 of this title. The
1
2 Commissioner shall hold this information confidential except as
2
3 provided in Section 1443 of this title.
3
4 F. 1. The administrator’s license shall be issued or renewed
4
5 by the Commissioner unless, after notice and opportunity for
5
6 hearing, the Commissioner determines that the administrator is not
6
7 competent, trustworthy, or financially responsible, or has had any
7
8 insurance license denied for cause by any state, has been convicted
8
9 or has pleaded guilty or nolo contendere to any felony or to a
9
10 misdemeanor involving moral turpitude or dishonesty.
10
11 2. The administrator shall report to the Insurance Commissioner
11
12 any administrative or criminal action taken against the
12
13 administrator in another jurisdiction or by another governmental
13
14 agency in this state within thirty (30) calendar days of the final
14
15 disposition of the matter. This report shall include a copy of the
15
16 order, consent to order, copy of any payment required as a result of
16
17 the administrative or criminal action, or other relevant legal
17
18 documents.
18
19 3. Any entity making application to the Oklahoma Insurance
19
20 Department as a third-party administrator (TPA) or within thirty
20
21 (30) days of a change for a licensed TPA shall provide current
21
22 National Association of Insurance Commissioners (NAIC) Biographical
22
23 Affidavits and independent third-party background reports from a
23
24 NAIC-approved vendor on behalf of all officers, directors and key
24
Req. No. 401 Page 5
 1 managerial personnel of the TPA, and individuals with a ten percent
1
2 (10%) or more beneficial ownership in the TPA and the TPA’s ultimate
2
3 controlling person (affiant) as required for insurers pursuant to
3
4 the laws of this state.
4
5 G. After notice and opportunity for hearing, and upon
5
6 determining that the administrator has violated any of the
6
7 provisions of the Oklahoma Insurance Code or upon finding reasons
7
8 for which the issuance or nonrenewal of such license could have been
8
9 denied, the Commissioner may either suspend or revoke an
9
10 administrator’s license or assess a civil penalty of not more than
10
11 Five Thousand Dollars ($5,000.00) for each occurrence. The payment
11
12 of the penalty may be enforced in the same manner as civil judgments
12
13 may be enforced.
13
14 H. Any person who is acting as or presenting himself or herself
14
15 to be an administrator without a valid license shall be subject,
15
16 upon conviction, to a fine of not less than One Thousand Dollars
16
17 ($1,000.00) nor more than Ten Thousand Dollars ($10,000.00) for each
17
18 occurrence. This fine shall be in addition to any other penalties
18
19 which may be imposed for violations of the Oklahoma Insurance Code
19
20 or other laws of this state.
20
21 I. Except as provided for in subsections F and G of this
21
22 section, any person convicted of violating any provisions of the
22
23 Third-party Administrator Act shall be guilty of a misdemeanor and
23
24
24
Req. No. 401 Page 6
 1 shall be subject to a fine of not more than One Thousand Dollars
1
2 ($1,000.00).
2
3 J. Each administrator shall electronically submit, in a form
3
4 and manner prescribed by the Commissioner, any change of legal
4
5 business name, doing business as or assumed name, address, service
5
6 agent contact information, or contact email address, and any
6
7 necessary fees within thirty (30) days after the change occurred.
7
8 Any submission of a change under this subsection that is received
8
9 more than thirty (30) days after the change occurred shall be
9
10 accompanied by a fee of Fifty Dollars ($50.00).
10
11 K. Upon receipt of any inquiry from the Insurance Commissioner,
11
12 a licensed administrator shall furnish the Commissioner with an
12
13 adequate response to the inquiry within twenty (20) days from
13
14 receipt of the inquiry.
14
15 SECTION 2. This act shall become effective November 1, 2023.
15
16
16
17 59-1-401 RD 1/17/2023 5:36:18 PM
17
18
18
19
19
20
20
21
21
22
22
23
23
24
24
Req. No. 401 Page 7