*ES0003.1*
March 25, 2025
ENGROSSED
SENATE BILL No. 3
_____
DIGEST OF SB 3 (Updated March 25, 2025 1:52 pm - DI 141)
Citations Affected: IC 27-1.
Synopsis: Fiduciary duty in health plan administration. Provides that
any third party administrator or pharmacy benefit manager acting on
behalf of a plan sponsor owes a fiduciary duty to the plan sponsor.
Effective: July 1, 2025.
Busch, Charbonneau, Garten,
Johnson T, Randolph Lonnie M
(HOUSE SPONSORS — CARBAUGH, CAMPBELL)
January 14, 2025, read first time and referred to Committee on Health and Provider
Services.
January 29, 2025, amended, reported favorably — Do Pass.
February 13, 2025, read second time, ordered engrossed. Engrossed.
February 17, 2025, read third time, passed. Yeas 47, nays 0.
HOUSE ACTION
March 3, 2025, read first time and referred to Committee on Insurance.
March 25, 2025, amended, reported — Do Pass.
ES 3—LS 6336/DI 141 March 25, 2025
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
ENGROSSED
SENATE BILL No. 3
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 27-1-25.5 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]:
4 Chapter 25.5. Fiduciary Duties
5 Sec. 1. As used in this chapter, "fiduciary duty" includes the
6 duty to:
7 (1) act with loyalty and care in the best interest of the plan
8 sponsor;
9 (2) ensure that all fees, costs, and commissions are reasonably
10 and fully disclosed;
11 (3) avoid self-dealing and conflicts of interest; and
12 (4) maintain transparency in all financial and contractual
13 arrangements related to the plan sponsor's health insurance
14 coverage, including prescription drug benefits.
15 Sec. 2. As used in this chapter, "health insurance coverage"
16 includes:
17 (1) a group policy of accident and sickness insurance (as
ES 3—LS 6336/DI 141 2
1 defined in IC 27-8-5-1);
2 (2) a group contract (as defined in IC 27-13-1-16) that
3 provides coverage for basic health care services (as defined in
4 IC 27-13-1-4); and
5 (3) any other group health plan that limits eligibility to
6 members of a specific group.
7 The term includes coverage of a dependent of the covered
8 individual under a group policy or contract described in
9 subdivisions (1) through (3).
10 Sec. 3. As used in this chapter, "insurer" means an insurer that
11 provides health insurance coverage to a covered individual.
12 Sec. 4. As used in this chapter, "pharmacy benefit manager" has
13 the meaning set forth in IC 27-1-24.5-12.
14 Sec. 5. As used in this chapter, "plan sponsor" means an
15 employer or organization that offers health insurance coverage to
16 its employees or members through an insurer or a self-funded
17 health benefit plan.
18 Sec. 6. Any:
19 (1) third party administrator; or
20 (2) pharmacy benefit manager;
21 acting on behalf of a plan sponsor owes a fiduciary duty to the plan
22 sponsor.
ES 3—LS 6336/DI 141 3
COMMITTEE REPORT
Mr. President: The Senate Committee on Health and Provider
Services, to which was referred Senate Bill No. 3, has had the same
under consideration and begs leave to report the same back to the
Senate with the recommendation that said bill be AMENDED as
follows:
Page 1, line 10, after "2." insert "As used in this chapter,
"fiduciary duty" means an obligation to do the following:
(1) Act prudently and solely in the best interest of the plan
sponsor in the management of any activities concerning the
health insurance coverage of a plan sponsor, including, if
applicable, a prescription drug benefit.
(2) Account for and disclose to the plan sponsor any:
(A) compensation received; or
(B) potential conflict of interest;
in a manner that would allow a plan sponsor to take into
consideration the information.
(3) Ensure compliance with applicable federal and state law.
Sec. 3.".
Page 2, line 5, delete "3." and insert "4.".
Page 2, line 7, delete "4." and insert "5.".
Page 2, line 9, delete "5." and insert "6.".
Page 2, line 11, delete "6." and insert "7.".
Page 2, line 15, delete "7." and insert "8. (a) This section does not
apply to an insurance producer that is compensated on a flat fee
basis instead of on a percentage basis.
(b)".
and when so amended that said bill do pass.
(Reference is to SB 3 as introduced.)
CHARBONNEAU, Chairperson
Committee Vote: Yeas 11, Nays 0.
ES 3—LS 6336/DI 141 4
COMMITTEE REPORT
Mr. Speaker: Your Committee on Insurance, to which was referred
Senate Bill 3, has had the same under consideration and begs leave to
report the same back to the House with the recommendation that said
bill be amended as follows:
Page 1, delete lines 5 through 17, begin a new paragraph and insert:
"Sec. 1. As used in this chapter, "fiduciary duty" includes the
duty to:
(1) act with loyalty and care in the best interest of the plan
sponsor;
(2) ensure that all fees, costs, and commissions are reasonably
and fully disclosed;
(3) avoid self-dealing and conflicts of interest; and
(4) maintain transparency in all financial and contractual
arrangements related to the plan sponsor's health insurance
coverage, including prescription drug benefits.".
Page 2, delete lines 1 through 4.
Page 2, line 5, delete "3." and insert "2.".
Page 2, delete lines 17 through 18.
Page 2, line 19, delete "5." and insert "3.".
Page 2, line 21, delete "6." and insert "4.".
Page 2, line 23, delete "7." and insert "5.".
Page 2, delete lines 27 through 36, begin a new paragraph and
insert:
"Sec. 6. Any:
(1) third party administrator; or
(2) pharmacy benefit manager;
acting on behalf of a plan sponsor owes a fiduciary duty to the plan
sponsor.".
and when so amended that said bill do pass.
(Reference is to SB 3 as printed January 30, 2025.)
CARBAUGH
Committee Vote: yeas 11, nays 0.
ES 3—LS 6336/DI 141