Third-Party Administrators (TPA)
Regulations 36 § 1441 to 1452.
Disclaimer: The following is an overview of the laws pertaining to the requirements for an entity to administer premium collection &/or adjust or settle claims for life, health, annuity &/or stop loss coverage for an insurance carrier or trust issuing contracts of insurance in Oklahoma. Refer to the OSCN webpage to research all the statues.
Applicability 36 O.S. § 1441.1.
The provisions of Section 1441 et seq. of this title shall not apply to administrators of group self-insurance associations created pursuant to Section 103 of Title 85A of the Oklahoma Statutes regulated under the Oklahoma Workers’ Compensation Commission (an Oklahoma State agency at https://www.ok.gov/wcc/).
Definitions 36 O.S. § 1442 and 1450.
“Administrator” means any person who collects premiums for an insurer or trust or who adjusts or settles claims for an insurer or trust, in connection with life or health insurance coverage, annuities or employee benefit stop loss in this state, but shall not include any person who collects premiums or who adjusts or settles claims under the following circumstances:
- any employer on behalf of the employees of that employer or the employees of one or more subsidiary or affiliated corporations of that employer,
- a union on behalf of its members,
- an insurance company which is licensed to transact insurance business in this state,
- a wholly owned subsidiary of an entity which is subject to the jurisdiction of the Insurance Commissioner,
- an insurance company acting as an insurer with respect to a policy lawfully issued and delivered by said company in and pursuant to the laws of this state,
- a hospital, medical, dental, or optometric service corporation or a health care service organization, including their agents, authorized by the Commissioner to issue contracts in this state pursuant to the provisions of the Oklahoma Insurance Code when engaged in the performance of their duties,
- a life or disability agent or broker who is licensed in this state and whose activities are limited exclusively to the sale of insurance,
- an adjuster licensed in this state for the kinds of business for which he is acting as an adjuster,
- a creditor insuring a debt between the creditor and its debtors on behalf of said creditor’s debtors,
- a financial institution which is subject to supervision or examination by federal or state banking authorities,
- a company which issues credit cards and advances credit for and collects premiums or charges from its credit card holders who have authorized said collection, if the company does not adjust or settle claims,
- a person who adjusts or settles claims in the normal course of practice or employment as an attorney-at-law and who does not collect charges or premiums in connection with life or health insurance coverage or annuities,
- any workers’ compensation trust, or
- a trust providing benefits to the employees of any political subdivision of a city, county or the state; and
“Trust” means any trust other than those exempted in paragraph 1 of this section which engages in the business of making contracts of insurance.
“Home state” means the United States jurisdiction that has adopted the TPA Act or a substantially similar law governing third-party administrators, and which has been designated by the administrator as its principal regulator. The administrator may designate either its state of incorporation or its principal place of business within the United States if that jurisdiction has adopted the TPA Act or a substantially similar law governing third-party administrators. If neither the administrator’s state of incorporation nor its principal place of business within the United States has adopted the TPA Act or a substantially similar law governing TPAs, then the TPA shall designate a United States jurisdiction in which it does business and which has adopted the TPA Act or a substantially similar law governing third-party administrators. For purposes of this paragraph, “United States jurisdiction” means the District of Columbia or a state or territory of the United States.
“Nonresident administrator” means a person who is applying for licensure or is licensed in any state other than the administrator’s home state.
$100.00 Annual license fee (non-refundable)
Cycle – Annual on the last day of the issue month
*90 Day Reinstatement – A license that expires for failure to submit a renewal application may be reinstated within ninety (90) days after the expiration date by electronically submitting a fee in an amount of Two Hundred Dollars ($200.00) in a form and manner prescribed by the Commissioner and any other transaction or other fee deemed necessary by the Commissioner.
*Expired more than 90 days – all applications received after the license has expired for more than ninety (90) days shall include a detailed report of administrator services provided in this state during the period of expired licensure. Complete the Activity Attestation form from the expiration date through the date a complete, executed, initial application is submitted via OPTins.
Surety Bond 36 O.S. § 1448.
Administrator shall file with the Insurance Commissioner and thereafter keep in effect if the license remains in effect, a surety bond in an amount not less than Ten Thousand Dollars ($10,000.00) made payable to the People of Oklahoma.
In no event shall the cumulative liability of the Surety be more than the penal sum of the bond. In no event shall the Surety cancel the bond without first giving thirty (30) days’ written notice to the principal and the Insurance Commissioner.
OAC 365:25-3-12 (f) Bond Amount
The bond required by Section 1448 shall be set by the Insurance Commissioner but shall be no less than the following amounts as reported in the annual report of the third party administrator for the immediately preceding calendar year:
- For $1,000,000 and above in premiums collected or claims paid, whichever is higher – $40,000 bond required
- For $500,000 to $999,999 in premiums collected or claims paid, whichever is higher – $35,000 bond required
- For $250,000 to $499,999 in premiums collected or claims paid, whichever is higher – $30,000 bond required
- For $100,000 to $249,999 in premiums collected or claims paid, whichever is higher – $25,000 bond required
- For $75,000 to $99,999 in premiums collected or claims paid, whichever is higher – $20,000 bond required
- For $50,000 to 74,999 in premiums collected or claims paid, whichever is higher – $15,000 bond required
- For $49,999 or less in premiums collected or claims paid, whichever is higher – $10,000 bond required.
License Requirements 36 O.S. § 1450.
No person shall act as or present himself or herself to be an administrator, as defined by the provisions of the Third-party Administrator Act, in this state, unless the person holds a valid license as an administrator which is issued by the Insurance Commissioner.
Non-resident License – administrator is required to hold a home state certificate of authority or license in a state that has adopted the TPA Act or that applies substantially similar provisions as are contained in the TPA Act to that administrator. If the TPA Act in the administrator’s home state does not extend to stop-loss insurance, but if the home state otherwise applies substantially similar provisions as are contained in the TPA Act to that administrator, then that omission shall not operate to disqualify the administrator from receiving a nonresident administrator license in this state.
Partnership – each general partner shall be licensed and shall qualify as though an individual licensee.
- A full additional license fee and a separate license shall be issued for each individual so named in such a license.
- The partnership shall notify the Commissioner within thirty (30) days if any individual licensed on its behalf has been terminated or is no longer associated with or employed by the partnership.
- Any person making application as an administrator or currently licensed as an administrator under the TPA Act shall provide a National Association of Insurance Commissioner (NAIC) Biographical Affidavit and a comprehensive review of the background report by an independent third-party NAIC-approved vendor as required for domestic insurers pursuant to the insurance laws of this state. *The independent third-party background check will no longer be required for applications submitted after 11/1/2023.
Self-reporting Actions – The administrator shall report to the OID any administrative or criminal action taken against the administrator in another jurisdiction or by another governmental agency in this state within thirty (30) calendar days of the final disposition of the matter. This report shall include:
- a copy of the order
- consent to order
- copy of any payment required because of the administrative or criminal action
- other relevant legal documents
NAIC Biographical Affidavit – TPA initial applicants or within (30) days of a change for a licensed TPA shall submit a current National Association of Insurance Commissioners (NAIC) Biographical Affidavits and independent third-party background reports from a NAIC-approved vendor on behalf of all officers, directors and key managerial personnel of the TPA, and individuals with a ten percent (10%) or more beneficial ownership in the TPA and the TPA’s ultimate controlling person (affiant) as required for insurers pursuant to the laws of this state. A new biographical affidavit is required within thirty (30) days of a change for a licensed TPA.
Independent third-party background reports may be mailed to the OID or email a password protected file to RIS@oid.ok.gov. *The independent third-party background check will no longer be required for applications submitted after 11/1/2023.
Annual Report 36 O.S. § 1452.
On or before June 1 of each year all licensed administrators shall file an annual report for the previous calendar year.
- Annual report with accumulated year-to-date premiums collected or claims paid of Fifty Thousand Dollars ($50,000.00) or more, whichever is greater, shall have been reviewed by a certified public accountant who shall be independent of the administrator.
- The report shall be subscribed and sworn to by the president and attested to by the secretary or other proper officers substantiating that the information contained in the report is true and factual concerning each of the plans they administer which are governed pursuant to the provisions of the TPA Act.
- The report shall include the
- name and address of each fund
- A statement of fund equity
- paid claims by the covered unit
- the accumulated year-to-date paid claims
- the year-to-date reserve status.
Failure of any TPA to execute and file the annual reports as required by this section shall constitute cause, after notice and opportunity for hearing, for censure, suspension, or revocation of administrator licensure to transact business in this state, or a civil penalty of not less than One Hundred Dollars ($100.00) or more than One Thousand Dollars ($1,000.00) for each occurrence, or both censure, suspension, or revocation and civil penalty.
Waiver for no business or activity in the past calendar year – If a licensed administrator has not administered any insurance plans or business in the past calendar year and no funds are under the licensed administrator’s oversight and administration, then the licensed administrator may apply for waiver of the annual report. The waiver application must be submitted via OPTins no later than April 1st on the form prescribed by the Commissioner.
*Name or Contact Change Information 36 O.S. § 1450 (J).
Each administrator shall electronically submit, in a form and manner prescribed by the Commissioner, any change of legal business name, “doing business as” or assumed name, address, service agent contacts information, or contact email address, and any necessary fees within thirty (30) days after the change occurred. Any submission of a change under this subsection that is received more than thirty (30) days after the change occurred shall be accompanied by a fee of Fifty Dollars ($50.00). The fee must be paid online by clicking on Pay a Violation.
*Days to respond 36 O.S. § 1450 (K).
Upon receipt of any inquiry from the Insurance Commissioner, a licensed administrator shall furnish the Commissioner with an adequate response to the inquiry within twenty (20) days from receipt of the inquiry.
Third-Party Administrator Licensing Information
Third-Party Administrator Application Instructions
Third-Party Application Requirement Checklists
Third-Party Administrator Bond Form
Third-Party Administrator License Renewal Instructions (for license renewal only)
Third-Party Administrator License Surrender Form
Third-Party Administrator Name Change Form
Statutes and Rules