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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2123 By: McEntire, Townley, Frix,
Grego, Newton and Moore of
the House
and
McCortney, Stephens, Hicks
and Taylor of the Senate
COMMITTEE SUBSTITUTE
An Act relating to insurance; defining term; amending
36 O.S. 2011, Section 121, which relates to
computation of time; including the Pharmacy Choice
Commission; amending 36 O.S. 2011, Section 301, which
relates to the Insurance Department; including the
Pharmacy Choice Commission; providing for the powers
and duties of the Commission; amending 36 O.S. 2011,
Section 307, as amended by Section 1, Chapter 362,
O.S.L. 2017 (36 O.S. Supp. 2020, Section 307), wh ich
relates to the duties of the Insurance Commissioner;
creating exceptions; amending 36 O.S. 2011, Section
312A, as amended by Section 2, Chapter 298, O.S.L.
2015 (36 O.S. Supp. 2020, Section 312A), which
relates to enforcement and recording of penalties and
fees; providing for enforcement of certain actions by
the Pharmacy Choice Commission; amending 36 O.S.
2011, Section 313, which relates to orders and
notices; requiring the Pharmacy Choice Commission to
comply with certain requirements; amending 36 O. S.
2011, Section 332, which relates to general duties
and powers; vesting the Pharmacy Choice Commission
with certain duties and authorities; authorizing the
Insurance Commissioner to employ certain persons;
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providing for certain expenses to be charged to
certain entities; requiring filing and keeping of a
certain affidavit; amending 36 O.S. 2011, Section
907, which relates to the general powers of the
Insurance Commissioner; providing exception; amending
Section 8, Chapter 426, O.S.L. 2019 (36 O.S. Supp.
2020, Section 6965), which relates to the power to
investigate; vesting certain authority in the
Pharmacy Choice Commission; modifying time for
certain response; amending Section 9, Chapter 426,
O.S.L. 2019 (36 O.S. Supp. 2020, Section 6966), which
relates to complaints of certain violations; creating
the Patient's Right to Pharmacy Choice Commission;
providing for restitution; modifying terms; modifying
appointments of initial members; providing for
election of chair and vice -chair; allowing certain
parties to intervene in certain hearings;
transferring certain duties from the Insurance
Commissioner to the Pharmacy Choice Commission;
amending Section 10, Chapter 426, O.S.L. 2019 (36
O.S. Supp. 2020, Section 6967), which relates to
confidentiality and privile ged information; including
the Pharmacy Choice Commission; providing for
codification; and declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 107.3 of Title 36, unless there
is created a duplication in numbering, reads as follows:
When used with reference to the administration of the Oklahoma
Insurance Code, "Pharmacy Choice Commission", "Pharmacy Commission"
or "Commission" means the Patient's Right to Pharmacy Choice
Commission established by Section 6966 of Title 36 of the Oklahoma
Statutes.
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SECTION 2. AMENDATORY 36 O.S. 2011, Section 121, is
amended to read as follows:
Section 121. In computing any period of time prescribed or
allowed by this title, by the rules of the Insurance Commissioner or
the Pharmacy Choice Commission , or by any applicable statute, the
day of the act, event, or default from which the designated period
of time begins to run shall not be included. The last day of the
period so computed shall be included, unless it is a Saturday, a
Sunday, a legal holiday as defined by the Oklahoma Statutes, or any
day when the office of the Commissioner does not remain open for
public business until 4:00 p.m., in which event the period runs
until the end of the next day when the office of the Commissioner is
open until 4:00 p.m. When the period of time prescribed or allowed
is less than seven (7) days, intermediate Saturdays, Sund ays and
legal holidays shall be excluded in the computation.
SECTION 3. AMENDATORY 36 O.S. 2011, Section 301, is
amended to read as follows:
Section 301. The Insurance Department of the State of Oklahoma
is hereby created. The Department shall consist of the Insurance
Commissioner and the Pharmacy Choice Commission. The Insurance
Commissioner shall be the chief executive officer of the Insurance
Department. The powers and duties of the Insurance Commissioner
shall be those created by the Oklahoma Insurance Code and not
reserved to the Commission, as well as such powers and duties as the
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Commission may request the Commissioner to perform. The powers and
duties of the Pharmacy Choice Commission shall be those created by
the applicable provisions of the Code . The Insurance Department
shall be situated in one area in the State Capitol or some other
location conveniently accessible to the general public subject to
the provisions of Sections 63 and 94 of Title 74 of the Oklahoma
Statutes and Section 580:20 -13-5 of the Oklahoma Administrative
Code.
SECTION 4. AMENDATORY 36 O.S. 2011, Section 307, as
amended by Section 1, Chapter 362, O.S.L. 2017 (36 O.S. Supp. 2020,
Section 307), is amended to read as follow s:
Section 307. The Insurance Commissioner shall be charged with
the duty of administration and enforcement of the provisions of the
Oklahoma Insurance Code and of any requirements placed on an
insurance company pursuant to the Oklahoma Statutes , except those
duties specifically assigned to the Pharmacy Choice Commission. The
Insurance Commissioner shall provide such administrative and staff
support as required by the Commission . The Commissioner shall have
jurisdiction over complaints against all person s engaged in the
business of insurance, other than complaints assigned to the
Pharmacy Choice Commission, and shall hear all matters either in
person, by authorized disinterested employees, or by hearing
examiners appointed by the Commissioner for that pur pose. It shall
be the duty of the Commissioner to file and safely keep all books
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and papers required by law to be filed with the Insurance
Department, and to keep and preserve in permanent form a full record
of proceedings, including a concise statement o f the conditions of
such insurers and other entities reported and examined by the
Department and its examiners. The Commissioner shall, annually, at
the earliest practicable date after returns are received from the
several authorized insurers and other or ganizations, make a report
to the Governor of the State of Oklahoma of the affairs of the
Office office of the Commissioner, which report shall contain a
tabular statement and synopsis of the several statements, as
accepted by the Commissioner, which shall include with respect to
each insurance company the admitted assets, liabilities except
capital, capital and surplus, Oklahoma premium income, amount of
claims paid in Oklahoma, and such other matters as may be of benefit
to the public. The Commissioner m ay educate consumers and make
recommendations regarding the subject of insurance in this state,
and shall set forth in a statement the various sums received and
disbursed by the Department, from and to whom and for what purpose.
Such report shall be publi shed by and subject to the order of the
Commissioner. The Commissioner shall, upon retiring from office,
deliver to the qualified successor all furniture, records, papers
and property of the office.
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SECTION 5. AMENDATORY 36 O.S. 2011, Section 312A, as
amended by Section 2, Chapter 298, O.S.L. 2015 (36 O.S. Supp. 2020,
Section 312A), is amended to read as follows:
Section 312A. Civil penalties and fees imposed by the Insurance
Commissioner or Pharmacy Choice Commission pursuant to Oklahoma law
may be enforced in the same manner in which civil judgments may be
enforced. All final orders of the Insurance Commissioner or
Pharmacy Choice Commission imposing administrative charges, fees,
civil penalties, restitution or fines may be recorded in the office
of the Clerk of the District Court of Oklahoma County and, upon such
recording, all appropriate writs and process shall issue and shall
be enforced by the judges of said court upon application.
SECTION 6. AMENDATORY 36 O.S. 2011, Section 313, is
amended to read as follows:
Section 313. A. Orders and notices of the Insurance
Commissioner or Pharmacy Choice Commission shall be in writing and
shall be signed by either the Commissioner, an authorized employee
of the Insurance Department, or an independent hearing examiner. A
final order signed by an independent hearing examiner, after
hearing, shall be final agency action, notwithstanding the
provisions of Section 311 of Title 75 of the Oklahoma Statutes.
B. In the exercise of the powers and the performance of the
duties enumerated in this title, the Commissioner and the Pharmacy
Choice Commission shall comply with the procedures of the
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Administrative Procedures Act. Any conflict between the provisions
of Title 75 of the Oklahoma Statutes and of this title shall be
resolved in favor of the provisions of this title.
SECTION 7. AMENDATORY 36 O.S. 2011, Section 332, is
amended to read as follows:
Section 332. A. The Pharmacy Choice Comm ission is hereby
vested with the duty and authority of enforcing and administering
all applicable provisions of the Oklahoma Insurance Code pertaining
to the jurisdiction of the Commission, as well as the provisions of
Sections 356 through 360 of Title 59 of the Oklahoma Statutes.
B. The Commission shall have powers and authority expressly
conferred upon it and reasonably implied by the provisions of this
Code and by the provisions of Sections 356 through 360 of Title 59
of the Oklahoma Statutes. The Comm ission shall have the power to
approve, disapprove, or approve with modifications any filings
submitted to it.
C. The Commission may conduct such examinations and
investigations of insurance matters, within the scope of its
authority, as it may deem prope r to secure information useful in the
lawful administration of the applicable provisions of this Code and
Sections 356 through 360 of Title 59 of the Oklahoma Statutes.
D. The Insurance Commissioner, on behalf of the Pharmacy Choice
Commission, shall have the authority to employ actuaries,
statisticians, accountants, attorneys, auditors, investigators or
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any other technicians, as the Commission may deem necessary or
beneficial, to examine, audit, review, validate, investigate or
secure information useful i n the lawful administration of the
applicable provisions of this Code and Sections 356 through 360 of
Title 59 of the Oklahoma Statutes.
1. Any entity examined by the Commission pursuant to this
section shall pay all reasonable charges incurred in such
examination, including the actual expense of the Commission or the
expenses and compensation of the authorized representative of the
Commission.
2. All expenses incurred in such examination shall be verified
by affidavit and a copy thereof shall be filed an d kept at the
office of the Insurance Commissioner.
E. The Commissioner may conduct such examinations and
investigations of insurance matters, within the scope of the
authority of the Commissioner, as the Commissioner may deem proper
to secure information useful in the lawful administration of the
applicable provisions of the Oklahoma Insurance Code.
B. F. The Insurance Commissioner shall have the authority to
employ actuaries, statisticians, accountants, attorneys, auditors,
investigators or any other te chnicians as the Insurance Commissioner
may deem necessary or beneficial to examine any filings for rate
revisions made by insurers or advisory organizations and to examine
such records of the insurers or advisory organizations as may be
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deemed appropriate in conjunction with the filing for a rate
revision in order to determine that the rates or other filings are
consistent with the terms, conditions, requirements and purposes of
the Insurance Code, and to verify, validate and investigate the
information upon which the insurer or advisory organization relies
to support such filing.
1. The Commissioner shall maintain a list of technicians
qualified pursuant to rules adopted by the Commissioner who are
proficient in the lines of insurance being reviewed. Upo n request
of the Commissioner, the Commissioner shall employ the next
available technician in rotation on the list, proficient in the line
or lines of insurance being reviewed. The Commissioner may deviate
from the list when employing technicians for loss cost filings
pursuant to Section 901.5 of this title.
2. All reasonable expenses incurred in such filing review shall
be paid by the insurer or advisory organization making the filing.
C. G. The Commissioner shall employ examiners to ensure that
the rates which have been approved by or filed with the Commissioner
are the rates which are being used by the insurer or by the insurers
whose advisory organization has had a rate approval or rate filing.
1. Any insurer examined pursuant to the provisions of th is
section shall pay all reasonable charges incurred in such
examination, including the actual expense of the Commissioner or the
expenses and compensation of the authorized representative of the
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Commissioner and the expense and compensation of assistants and
examiners employed therein.
2. All expenses incurred in such examination shall be verified
by affidavit and a copy shall be filed and kept in the office of the
Insurance Commissioner.
SECTION 8. AMENDATORY 36 O.S. 2011, Secti on 907, is
amended to read as follows:
Section 907. In addition to any powers hereinbefore expressly
enumerated in this law, the Commissioner shall have full power and
authority to enforce by regulations, orders, or otherwise all and
singular, the provisi ons of this law, and the full intent thereof ,
except for those provisions reserved to the Pharmacy Choice
Commission by the Oklahoma Insurance Code and Sections 356 through
360 of Title 59 of the Oklahoma Statutes . In particular it the
Commissioner shall have the authority and power:
1. To examine all records of insurers and advisory
organizations and to require any insurer, agent, broker and advisory
organization to furnish under oath such information as it may deem
necessary for the administration of th is law. The expense of such
examination shall be paid by the insurer or advisory organization
examined. In lieu of such examination, the Commissioner may, in the
discretion of the Commissioner, accept a report of examination made
by any other insurance s upervisory authority;
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2. To make and enforce such reasonable orders, rules, and
regulations as may be necessary in making this law effective, but
such orders, rules and regulations shall not be contrary to or
inconsistent with the provisions of this law; and
3. To issue an order, after a full hearing to all parties in
interest requiring any insurer, group, association, or organization
of insurers and the members and subscribers thereof to cease and
desist from any unfair or unreasonable practice.
SECTION 9. AMENDATORY Section 8, Chapter 426, O.S.L.
2019 (36 O.S. Supp. 2020, Section 6965), is amended to read as
follows:
Section 6965. A. The Insurance Commissioner Pharmacy Choice
Commission shall have power and authority to examine and investigate
into the affairs of every pharmacy benefits manager (PBM) engaged in
pharmacy benefits management in this state in order to determine
whether such entity is in compliance with the Patient's Right to
Pharmacy Choice Act.
B. All PBM files and records shall be subject to examination by
the Insurance Commissioner or by duly appointed designees Pharmacy
Choice Commission. The Insurance Commissioner Commission,
authorized employees and examiners shall have access to any of a
PBM's files and records that may relate to a particular complaint
under investigation or to an inquiry or examination by the Insurance
Department Commission.
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C. Every officer, director, employee or agent of the PBM, upon
receipt of any inquiry from the Commissioner Pharmacy Choice
Commission shall, within thirty (30) fifteen (15) days from the date
the inquiry is sent, furnish the Commissioner Commission with an
adequate response to the inquiry.
D. When making an examination under this section, the Insurance
Commissioner Pharmacy Choice Commission may retain subject matter
experts, attorneys, appraisers, independent actuaries, independent
certified public accountants or an accounting firm or individual
holding a permit to practice public accounting, certified financial
examiners or other professionals and specialists as examiners, the
cost of which shall be borne by the PBM which that is the subject of
the examination.
SECTION 10. AMENDATORY Section 9, Chapter 426, O.S.L.
2019 (36 O.S. Supp. 2020, Section 6966), is amended to read as
follows:
Section 6966. A. There is hereby created the Patient's Right
to Pharmacy Choice Commission.
B. The Insurance Commissioner , on behalf of the Pharmacy Choice
Commission, shall provide for the receiving and pro cessing of
individual complaints alleging violations of the provisions of the
Patient's Right to Pharmacy Choice Act and Sections 356 through 360
of Title 59 of the Oklahoma Statutes .
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B. C. The Commissioner Pharmacy Choice Commission shall
establish a Patient's Right to Pharmacy Choice Advisory Committee to
review complaints, hold hearings, subpoena witnesses and records,
initiate prosecution, reprimand, require restitution, place on
probation, suspend, revoke and/or levy fines not to exceed Ten
Thousand Dollars ($10,000.00) for each count for which any pharmacy
benefits manager (PBM) has violated a provision of this act the
Patient's Right to Pharmacy Choice Act or Sections 356 through 360
of Title 59 of the Oklahoma Statutes . The Advisory Committee
Commission may impose as part of any disciplinary action restitution
to the provider or patient and the payment of costs expended by the
Commission or Insurance Department for any legal fees and costs
including, but not limited to, staff time, salary and travel
expense, witness fees and attorney fees. The Advisory Committee
Commission may take such actions singly or in combination, as the
nature of the violation requires.
C. D. The Advisory Committee Pharmacy Choice Commission shall
consist of seven (7) person s appointed as follows:
1. Two persons who shall be nominated appointed by the Oklahoma
Pharmacists Association;
2. Two consumer members not employed by or professionally
related to the insurance, pharmacy or PBM nominated industry
appointed by the Office of the Governor;
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3. Two persons representing the PBM or insurance industry
nominated appointed by the Insurance Commissioner; and
4. One person representing the Office of the Attorney General
nominated appointed by the Attorney General.
D. Committee E. Pharmacy Choice Commission members shall be
first appointed for terms of five (5) years shall serve the initial
term staggered as follows: the two members appointed by the Office
of the Governor shall serve for one (1) year, the two members
appointed by the Insurance Commissioner shall serve for two (2)
years, the two members appointed by the Oklahoma Pharmacists
Association shall serve for two (2) years, and the one member
appointed by the Attorney General shall serve for three (3) years.
Subsequent terms shall be for five (5) years . The terms of the
members of the Advisory Committee shall expire on the thirtieth day
of June of the year designated for the expiration of the term for
which appointed, but the member shall serve until a qualified
successor has been duly appointed. No person shall be appointed to
serve more than two consecutive terms. The Commission shall
annually elect a chair and vice -chair from among its members. There
shall be no limit on the number of times a member may serve as chai r
or vice-chair.
E. F. Hearings shall be held in the Insurance Commissioner's
offices or at such other place as the Insurance Commissioner
Commission may deem convenient.
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F. G. The Insurance Commissioner , on behalf of the Pharmacy
Choice Commission, shall issue and serve upon the PBM a statement of
the charges and a notice of hearing in accordance with the
Administrative Procedures Act, Sections 250 through 323 of Title 75
of the Oklahoma Statutes.
G. H. At the time and place fixed for a hearing, the PBM shall
have an opportunity to be heard and to show cause why the Insurance
Commissioner Pharmacy Choice Commission or his or her its duly
appointed hearing examiner should not revoke or suspend the PBM's
license and levy administrative fines for each viola tion. Upon good
cause shown, the Commissioner Commission shall permit any person a
duly authorized representative of the PBM to intervene, appear and
be heard at the hearing by counsel or in person.
H. I. All hearings will be public and held in accordanc e with,
and governed by, Sections 250 through 323 of Title 75 of the
Oklahoma Statutes.
I. J. The Insurance Commissioner, on behalf of the Pharmacy
Choice Commission, upon written request reasonably made by the
licensed PBM affected by the hearing and at such PBM's expense shall
cause a full stenographic record of the proceedings to be made by a
competent court reporter.
J. K. If the Insurance Commissioner Pharmacy Choice Commission
determines, based on an investigation of complaints, that a PBM has
engaged in violations of this act the Patient's Right to Pharmacy
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Choice Act or Sections 356 through 360 of Title 59 of the Oklahoma
Statutes with such frequency as to indicate a general business
practice and that such PBM should be subjected to closer supervis ion
with respect to such practices, the Insurance Commissioner
Commission may require the PBM to file a report at such periodic
intervals as the Insurance Commissioner Commission deems necessary.
SECTION 11. AMENDATORY Section 10, Chapter 426, O.S.L.
2019 (36 O.S. Supp. 2020, Section 6967), is amended to read as
follows:
Section 6967. A. Documents, materials, reports, complaints or
other information in the possession or control of the Insurance
Department, on behalf of the Pharma cy Choice Commission, that are
obtained by or disclosed to the Insurance Commissioner , Pharmacy
Choice Commission, or any other person in the course of an
evaluation, examination, investigation or review made pursuant to
the provisions of the Patient's Rig ht to Pharmacy Choice Act or
Sections 356 through 360 of Title 59 of the Oklahoma Statutes shall
be confidential by law and privileged, shall not be subject to open
records request, shall not be subject to subpoena, and shall not be
subject to discovery or admissible in evidence in any private civil
action if obtained from the Insurance Commissioner , the Pharmacy
Choice Commission, or any employees or representatives of the
Insurance Commissioner Department.
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B. Nothing in this section shall prevent the dis closure of a
final order issued against a pharmacy benefits manager by the
Insurance Commissioner Pharmacy Choice Commission or his or her its
duly appointed hearing examiner. Such orders shall be open records.
SECTION 12. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
COMMITTEE REPORT BY: COMMITTEE ON PUBLIC HEALTH, dated 02/24/2021 -
DO PASS, As Amended and Coauthored.