Req. No. 1885 Page 1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 887 By: Quinn
COMMITTEE SUBSTITUTE
An Act relating to insurance; amending 36 O.S. 2011,
Section 311.4, as amended by Section 1, Chapter 275,
O.S.L. 2014 (36 O.S. Supp. 2020, Section 311.4),
which relates to annual statements reporting market
conduct data of insurers; authorizing imposition of
civil fine; amending 36 O.S. 2011, Section 615.2,
which relates to Biographical Affidavits; modify ing
time frame for Business Character Report; amending 36
O.S. 2011, Section 638, which relates to compliance
relating to examinations; updating statutory
references; requiring insurer using credit
information to provide certain exceptions to how
credit information is used; specifying exceptions;
authorizing insurer to require certain information
for granting of exception; declaring insurer in
compliance with law in certain situation; construing
provision; requiring insurer to provide notice of
exceptions; amending 36 O.S. 2011, Section 996, which
relates to assigned risks; removing prohibition on
disapproval of certain market plans; authorizing the
Oklahoma Automobile Insurance Plan to issue certain
policies; declaring policies as proof of certain
required financial responsibility; providing for
liability; requiring filing of annual audited
financial statement; authorizing Commissioner to
establish necessary rul es; amending 36 O.S. 2011,
Section 1116, as amended by Section 18, Chapter 45,
O.S.L. 2012 (36 O.S. Supp. 2020, Section 1116), which
relates to penalties for failure to remit taxes;
removing time limits; specifying application of
certain penalty; amending 36 O.S. 2011, Section 1219,
which relates to claims reimbursement or denial;
modifying time and ma nner of claim payment or denial;
Req. No. 1885 Page 2 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
amending 36 O.S. 2011, Section 1250.5, as amended by
Section 1, Chapter 105, O.S.L. 2012 (36 O.S. Supp.
2020, Section 1250.5) , which relates to acts by an
insurer constituting unfair claim settlement
practices; authorizing certain method of payment;
amending 36 O.S. 2011, Section 1250.7, as amended by
Section 7, Chapter 95, O.S.L. 2018 (36 O.S. Supp.
2020, Section 1250.7), which relates to property and
casualty claims; modifying time for notice; amending
36 O.S. 2011, Sectio n 1250.8, which relates to motor
vehicle total loss or damage claim; providing for
electronic payment; amending 36 O.S. 2011, Section
1435.20, as last amended by Section 1, Chapter 263,
O.S.L. 2019 (36 O.S. Supp. 2020, Section 14 35.20),
which relates to limited lines producers; updating
language; adding type of license limited lines
producer may receive; amending 36 O.S. 2011, Section
1445, which relates to fiduciary capacity;
authorizing electronic payments in certain
circumstances; amending 36 O.S. 2011, Section 1450,
as amended by Section 6, Chapter 294, O.S.L. 2019 (36
O.S. Supp. 2020, Section 1450), which relates to
licensing procedure; modifying time for certain
notification; requiring background reports by certain
persons; amending 36 O.S. 2011, Secti ons 2004, 2006,
as amended by Section 1, Chapter 78, O.S.L. 2014 ,
2007 and 2008 (36 O.S. Supp. 2020, Section 2006),
which relate to the Oklahoma Property and Casualty
Insurance Guaranty Association; modifying definition;
modifying composition of Board of D irectors;
modifying obligations of certain insurers; specifying
entity responsible for issuance of certain policies;
adding method of certain notification; authorizing
insurer Board representative to designate alternate
member with duties of insurer; remov ing authority of
Commissioner to appoint Board members in certain
circumstances; modifying duties of the Association;
removing residency re quirement for certain entities;
amending 36 O.S. 2011, Section 2023, as amended by
Section 2, Chapter 384, O.S.L. 201 9 (36 O.S. Supp.
2020, Section 2023), which relates to the Oklahoma
Life and Health Insurance Guaranty Association;
clarifying terms; amending 36 O.S. 2011, Section
3101, which relates to definitions; modifying
definition; amending 36 O.S. Supp. 2011, Sect ion
3105, which relates to motor service club agents;
updating language; clarifying persons who may be
Req. No. 1885 Page 3 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
appointed; removing requirement of certain
notification; modifying certain fee for producers;
modifying length Commissioner may suspend certain
license; amending 36 O.S. 2011, Section 3 108, which
relates to misrepresentation; updating language;
amending 36 O.S. 2011, Section 3639.1, as amended by
Section 11, Chapter 44, O.S.L. 2012 (36 O.S. Supp.
2020, Section 3639.1), which relates to personal
residential insurance; requiring cancellati on of
personal residential insurance coverage as of date
certain; amending 36 O.S. 2011, Sections 4030 and
4030.1, which relate to paying premiums for single
life policies and payment of proceeds; amending 36
O.S. 2011, Section 4055.7, which relates to the
Viatical Settlements Act of 2008; amending 36 O.S.
Section 4055.9, which relates to viatical
settlements; amending 36 O.S. 2011, Section 4103,
which relates to schedule of premium rates; deleting
exception; amending 36 O.S. 2011, Section 4112, which
relates to payment of proceeds; amending 36 O.S.
2011, Section 6060.12, as amended by Section 3,
Chapter 75, O.S.L. 2020 (36 O.S. Supp. 2020, Section
6060.12), which relates to calculation of premium
costs; modifying penalty dete rmination; prohibiting
change of name of prepaid funeral benefit permit
holder; requiring Insurance Commissioner approval;
providing for application for change of name;
authorizing waiver of approval requirement;
authorizing denial of change of name applic ation;
providing for issuance of prepaid funeral benefit
permit with new name; authorizing Insurance
Commissioner to prescribe rules; amending 36 O.S.
2011, Section 6216.1, which relates to payment of
claims to public adjuster; amending 36 O.S. 2011,
Section 6217, as last amended by Sect ion 14, Chapter
269, O.S.L. 2013 (36 O.S. Supp. 2020, Section 6217),
which relates to continuing education; eliminating
continuing education advisory committee; defining
term; providing for dormant captive insurance company
to apply for certificate of dorm ancy; listing
requirements for certain dormant captive insurance
companies; providing exceptions; requiring certain
application prior to issuing insurance policies;
providing for revocation of certificate of dormancy;
providing for examination; authorizing the Insurance
Commissioner to promulgate rules; amending 36 O.S.
2011, Section 6552, which relates to definitions;
Req. No. 1885 Page 4 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
modifying definition; amending 36 O.S. 2011, Section
6753, as amended by Section 38, Chapter 150, O.S.L.
2012 (36 O.S. Supp. 2020, Section 6 753), which
relates to home service contracts; modifying type of
authorized financial security deposit; amending 36
O.S. 2011, Section 6904, which relates to issuance of
certificates; modifying agency responsible for
determining certain compliance; removin g duty and
notification requirements of State Commissioner of
Health; modifying time frame for issuance of
certificate; amending 36 O.S. 2011, Section 6907,
which relates to reasonable standards of quality care
and credentialing; modifying applicable agenc y;
amending 36 O.S. 2011, Section 6911, which relates to
grievance procedures; modifying responsible agency;
amending 36 O.S. 2011, Section 6919, which relates to
examination of affairs, programs, books and records;
amending 36 O.S. 2011, Section 6920, whi ch relates to
suspension or revocation of a certificate of
authority; eliminating role of State Commissioner of
Health in certain hearings and determinations;
modifying conditions in which Commissioner may revoke
certain license; amending 36 O.S. 2011, Sec tion 6929,
which relates to contracts with qualified persons;
repealing 36 O.S. 2011, Sections 1435.40, as amended
by Section 1, Chapter 23, O.S.L. 2016 (O.S. Supp.
2020, Section 1435.40), 1612.1, 6221, and 6522 which
relate to applicants for licensure, pr operty for
employees, Advisory Board to the Insurance
Commissioner, and the Oklahoma Small Employer Health
Reinsurance Program; providing for codification; and
providing an effective date.
BE IT ENACTED BY THE PE OPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2011, Section 311.4, as
amended by Section 1, Chapter 275, O.S.L. 2014 (36 O.S. Supp. 2020,
Section 311.4), is amended to read as follows:
Section 311.4. A. Insurers a uthorized to do business under t he
provisions of the Oklahoma Insurance Code shall annually file with
Req. No. 1885 Page 5 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the Insurance Commissioner market conduct annual statements
reporting market conduct data of insurers on the thirty -first day of
December of the previous year. The statements shall repo rt on the
lines of insurance and be in such general form and context as
approved by the National Association of Insurance Commissioners
(NAIC), and as supplemented for additional information required by
the Insurance Commiss ioner by rule. The statements s hall be
prepared in accordance with NAIC instructions, including any
supplemental filings described in the NAIC instructions. If no
forms or instructions are available from the National Association of
Insurance Commissioner s, the statements shall be in th e form and
pursuant to instructions as provided by the Insurance Commissioner.
Insurers not authorized by the Insurance Commissioner to provide the
lines of insurance approved by the National Association or the
Insurance Commissioner shall not be required to file market conduct
annual statements. For good cause shown, the Insurance Commissioner
may extend the time within which market conduct annual statements
may be filed. The Insurance Commissioner may provide copies of
market conduct annual statements, amendments, and addendums to such
statements and market conduct data taken from such statements to the
National Association of Insurance Commissioners only if, prior to
sharing of the market conduct annual statements, amend ments,
addendums to such stateme nts or market conduct data taken from such
statements, the National Association of Insurance Commissioners
Req. No. 1885 Page 6 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
enters into a written agreement with the Insurance Commissioner to
maintain the confidentiality of the shared informa tion.
B. The Insurance Commissi oner may adopt rules implementing this
section including rules that:
1. Add lines of insurance to be reported in market conduct
annual statements; and
2. Require the filing of market conduct annual statements and
any amendments and addendums to such statements with the National
Association of Insurance Commissioners, and the payment of
applicable filing fees required by the NAIC.
C. Insurers shall pay a filing fee of Two Hundred Dollars
($200.00) to the Insurance Commissio ner for the filing of the market
conduct annual statement.
D. No waiver of an applicable privilege or claim of
confidentiality in the documents, materials, or other information
shall occur as a result of disclosure to the Insurance Commissioner
or the Commissioner’s designee under this section or as a result of
sharing the documents, materials or other information as provided in
this section.
E. Market conduct annual statements and any amendments and
addendums to such statements, f iled with the Insurance Commissioner
pursuant to this section in electronic format or otherwise, shall be
treated as working papers and documents as set out in subsection F
of Section 309.4 of this title.
Req. No. 1885 Page 7 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
F. The Insurance Commissioner may use market condu ct annual
statements or amendments or addendums to such statements to assist
in determining whether a market conduct examination or investigation
of an insurer should be conducted. For purposes of completing a
market conduct examination of any company und er Sections 309.1
through 309.7 of this title, the Insurance Commissioner may, in the
sole discretion of the Insurance Commissioner, use market conduct
annual statements or amendments or addendums to such statements to
assist in determining compliance with the laws of this state and
rules adopted by the Insurance Commissioner.
G. For any violation of this section, the Insurance
Commissioner may, after notice and opportunity for a hearing,
subject an insurer to a civil penalty of up to One Thousand Dollars
($1,000.00) for each occ urrence. Such civil penalty may be enforced
in the same manner in which civil judgments may be enforced.
SECTION 2. AMENDATORY 36 O.S. 2011, Section 615.2, is
amended to read as follows:
Section 615.2. All domestic insurers and health maintenance
organizations are required to keep biographical information current.
Domestic insurers and health maintenance organizations are required
to provide Biographical Affidavits within thirty (30) days of any
change in officers, directors, ke y management or any person
acquiring ten percent (10%) or more controlling interest in a
domestic insurer. The information shall be on the National
Req. No. 1885 Page 8 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Association of Insurance Commissioners (NAIC) UCAA Biographical
Affidavit Form. The Biographical Affidavit is to be certified by an
independent third party acceptable to the Insurance Commissioner
that has conducted a comprehensive review of the background of the
applicant and has indicated that the Biographical Affidavit has no
significantly inaccurate or con flicting information and is accepted
as the Business Character Report. As used in this section,
“independent third party ” is one that has no affiliation with the
applicant and is in the business of providing background checks or
investigations. The Busin ess Character Report must be current and
shall not be older than one (1) year six (6) months.
SECTION 3. AMENDATORY 36 O.S. 2011, Section 638, is
amended to read as follows:
Section 638. Every MEWA Multiple Employer Welfare Arran gement
shall comply with Articles 15 through 19 and Sections 308 309.1
through 310 309.7, 311.1 and 619 of Title 36 of the Oklahoma
Statutes this title which pertain to examinations, deposits and
solvency regulation.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 953.1 of Title 36, unless there
is created a duplication in numbering, reads as follows:
A. Notwithstanding any other law or regulation, an insurer that
uses credit information sh all, upon written request from an
applicant for insurance coverage or an insured upon a form provided
Req. No. 1885 Page 9 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
by the Insurance Commissioner, provide reasonable exceptions to the
rate of the insurer, rating classifications, company or tier
placement or underwriting rules or guidelines for a consumer who has
experienced and whose credit information has been directly
influenced by any of the following events:
1. Catastrophic event declared by the federal or state
government;
2. Serious illness or injury, or serious illness or injury to
an immediate family member;
3. Death of an immediate family member;
4. Divorce or involuntary interruption of legally owed alimony
or support payments;
5. Identity theft;
6. Temporary loss of employment for a period of three (3)
months or more, if it results from involuntary termination;
7. Military deployment overseas; and
8. Other events, as determined by the Insurance Commissioner.
B. If an applicant or insured submits a request for an
exception as provided in subsection A of this section, an insurer
may, in its sole discretion:
1. Require the consumer to provide reasonable written and
independently verifiable documentation of the event;
Req. No. 1885 Page 10 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. Require the consumer to demonstrate that the event had
direct and meaningful impact on the credit information of the
consumer;
3. Require the request be made no more than sixty (60) days
from the date of the application for insurance or the policy
renewal;
4. Grant an exception despite the consumer not providing th e
initial request for an exception in writing; or
5. Grant an exception to requiring a written request where the
consumer asks for a consideration of repeated events or the insurer
has considered this event previously.
C. An insurer is in compliance with any other provision of law
or Insurance Department rule relating to underwriting, rating or
rate filing notwithstanding the granting an exception under this
section. Nothing in this section shall be construed to provide a
consumer or other insured with a cause of action that do es not exist
in the absence of this section.
D. The insurer shall provide notice to consumers, either at the
time of acceptance of an insuranc e application or at policy renewal,
that reasonable exceptions are available and information about how
the consumer may inquire further.
SECTION 5. AMENDATORY 36 O.S. 2011, Section 996, is
amended to read as follows:
Req. No. 1885 Page 11 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 996. Assigned Risks. A. Agreements may be made among
insurers with respect to the equitable apportionment among the m of
costs for insurance which may be afforded applicants who are in good
faith entitled to, but who are unable to procure , such insurance
through ordinary methods, and such insurers may agree among
themselves on the use of reasonable rate modifications fo r such
insurance, such agreements and rate modifications to be subject to
the approval of the Insurance Commissioner. Nothing in the Property
and Casualty Competitive Loss Cost Rating Act shall permit
disapproval of a residual market plan permitting an in surer to elect
voluntary direct assignment .
B. The Oklahoma Automobile Insurance Plan is authorized to
issue policies of insurance in the name of the plan for the
applicants described in subsection A of this section and to act on
behalf of all participati ng members in connection with the policies.
The policies shall be considered proof of financial responsibility
in accordance with Section 7 -600 of the Highway Safety Code.
C. The participating members shall be liable to the plan for
all costs, expenses a nd liabilities in proportion to its share of
voluntary market premium for the types of policies written under the
plan in this state.
D. The plan shall file an annual audited financial statement
with the Commissioner.
Req. No. 1885 Page 12 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
E. The Commissioner is authorized to establish rules and
regulations required to implement the purposes of this section.
SECTION 6. AMENDATORY 36 O.S. 20 11, Section 1116, as
amended by Section 18, Chapter 45, O.S.L. 2012 (36 O.S. Supp. 2020,
Section 1116), is amende d to read as follows:
Section 1116. A. Any surplus lines licensee or broker who
fails to remit the surplus line tax provided for by Section 1 115 of
this title for more than sixty (60) days after it is due shall be
liable for a civil penalty of not to exceed Twenty-five Dollars
($25.00) for each additional day of delinquency, per policy. The
Insurance Commissioner shall collect the tax by distr aint and shall
recover the penalty by an action in the name of the State of
Oklahoma. The Commissioner may reque st the Attorney General to
appear in the name of the state by relation of the Commissioner.
B. If any person, association or legal entity proc uring or
accepting any insurance coverage from a surplus lines insurer where
Oklahoma is the home state of the in sured, otherwise than through a
surplus lines licensee or broker, fails to remit the surplus line
tax provided for by Section 1115 of this titl e, the person,
association or legal entity shall, in addition to the tax, be liable
to a civil penalty in an amou nt equal to one percent (1%) of the
premiums paid or agreed to be paid for the policy or policies of
insurance for each calendar month of delin quency or a civil penalty
in the amount of Twenty -five Dollars ($25.00) whichever shall be the
Req. No. 1885 Page 13 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
greater. The Insurance Commissioner shall collect the tax by
distraint and shall recover the civil penalty in an action in the
name of the State of Oklahoma. T he Commissioner may request the
Attorney General to appear in the name of the state by relation of
the Commissioner.
SECTION 7. AMENDATORY 36 O.S. 2011, Section 1219, is
amended to read as follows:
Section 1219. A. In the admini stration, servicing, or
processing of any accident and health insurance policy, every
insurer shall reimburse all clean claims of an insured, an assignee
of the insured, or a health care provider within forty -five (45)
calendar days after receipt of the a paper claim and thirty (30)
calendar days after receipt of an electronic claim by the insurer.
B. As used in this section:
1. “Accident and health insurance policy ” or “policy” means any
policy, certificate, contract, agreement or other instrument that
provides accident and health insurance, as defined in Section 703 of
this title, to any person in this state, and any subscriber
certificate or any evidence of coverage issued by a health
maintenance organization to any person in this state;
2. “Clean claim” means a claim that has no defect or
impropriety, including a lack of any required substantiating
documentation, or particular circumstance requiring special
treatment that impedes prompt payment; and
Req. No. 1885 Page 14 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. “Insurer” means any entity that provides an accident and
health insurance policy in this state, including, but not limited
to, a licensed insurance company, a not -for-profit hospital service
and medical indemnity corporation, a health maintenance
organization, a fraternal benefit society, a multiple employer
welfare arrangement, or any other entity subject to regulation by
the Insurance Commissioner.
C. If a claim or any portion of a claim is determined to have
defects or improprieties, including a lack of any required
substantiating documentation, or particular circumstance requiring
special treatment, the insured , enrollee or subscriber, assignee of
the insured, enrollee or subscriber, and health care provider shall
be notified in writing within thirty (30) calendar days after
receipt of the claim by the insurer. The written notice shall
specify the portion of the claim that is causing a delay in
processing and explain any additional information or corrections
needed. Failure of an insurer to provide the insured, enrollee or
subscriber, assignee of the insured, enrollee or subscriber, and
health care provider with the notice shall constitute prima facie
evidence that the claim will be paid in accordance with the terms of
the policy. Provided, if a claim is not submitted into the system
due to a failure to meet basic Electronic Data Interchange (EDI)
and/or Health Insurance Portability and Accountability Act (HIPA A)
edits, electronic notification of the failure to the submitter shall
Req. No. 1885 Page 15 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
be deemed compliance with this subsection. Provided further, health
maintenance organizations shall not be required to notify the
insured, enrollee or subscriber, or assignee of the i nsured,
enrollee or subscriber of any claim defect or impropriety.
D. Upon receipt of the additional information or corrections
which led to the claim ’s being delayed and a determination that the
information is accurate, an insurer shall either pay or den y the
claim or a portion of the claim within forty -five (45) calendar days
for a paper claim and thirty (30) calendar days for an electronic
claim.
E. Payment shall be considered made on:
1. The date a draft or other valid instrument which is
equivalent to the amount of the payment is placed in the United
States mail in a properly addressed, postpaid envelope; or
2. If not so posted, the date of delivery.
F. An overdue payment shall bear simple interest at the rate of
ten percent (10%) per year.
G. In the event litigation should ensue based upon such a
claim, the prevailing party shall be entitled to recover a
reasonable attorney fee to be set by the court and taxed as costs
against the party or parties who do not prevail.
H. The Insurance Commissioner shall develop a standardized
prompt pay form for use by providers in reporting violations of
prompt pay requirements. The form shall include a requirement that
Req. No. 1885 Page 16 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
documentation of the reason for the delay in payment or
documentation of proof of payment must be provided within ten (10)
days of the filing of the form. The Commissioner shall provide the
form to health maintenance organizations and providers.
I. The provisions of this section shall not apply to the
Oklahoma Life and Health Insurance Guaranty A ssociation or to the
Oklahoma Property and Casualty Insurance Guar anty Association.
SECTION 8. AMENDATORY 36 O.S. 2011, Section 1250.5, as
amended by Section 1, Chapter 105, O.S.L. 2012 (36 O.S. Supp. 2020,
Section 1250.5), is ame nded to read as follows:
Section 1250.5. Any of the following acts by an insurer, if
committed in violation of Section 1250.3 of this title, constitutes
an unfair claim settlement practice exclusive of paragraph 16 of
this section which shall be applicabl e solely to health benefit
plans:
1. Failing to fully disclose to first party claimants,
benefits, coverages, or other provisions of any insurance policy or
insurance contract when the benefits, coverages or oth er provisions
are pertinent to a claim;
2. Knowingly misrepresenting to claimants pertinent facts or
policy provisions relating to coverages at issue;
3. Failing to adopt and implement reasonable standards for
prompt investigations of claims arising unde r its insurance policies
or insurance contracts;
Req. No. 1885 Page 17 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
4. Not attempting in good faith to effectuate prompt, fair and
equitable settlement of claims submitted in which liability has
become reasonably clear;
5. Failing to comply with the provisions of Section 1 219 of
this title;
6. Denying a claim for f ailure to exhibit the property without
proof of demand and unfounded refusal by a claimant to do so;
7. Except where there is a time limit specified in the policy,
making statements, written or otherwise, which require a claimant to
give written notice of loss or proof of loss within a specified time
limit and which seek to relieve the company of its obligations if
the time limit is not complied with unless the failure to comply
with the time limit prejudices the rights of an insurer;
8. Requesting a clai mant to sign a release that extends beyond
the subject matter that gave rise to the claim payment;
9. Issuing checks or, drafts or electronic payment in partial
settlement of a loss or claim under a specified co verage which
contain language releasing an i nsurer or its insured from its total
liability;
10. Denying payment to a claimant on the grounds that services,
procedures, or supplies provided by a treating physician or a
hospital were not medically necessary unless the health insurer or
administrator, as defined in Section 1442 of this title, first
obtains an opinion from any provider of health care licensed by law
Req. No. 1885 Page 18 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
and preceded by a medical examination or claim review, to the effect
that the services, procedu res or supplies for which payment is being
denied were not medically necessary. Upon written request of a
claimant, treating physician, or hospital, the opinion shall be set
forth in a written report, prepared and signed by the reviewing
physician. The report shall detail which specific services,
procedures, or supplies were not medically necessary, in the opinion
of the reviewing physician, and an explanation of that conclusion.
A copy of each report of a reviewing physician shall be mailed by
the health insurer, or administrator, postage prepaid , to the
claimant, treating physician or hospital requesting same within
fifteen (15) days after receipt of the written request. As used in
this paragraph, “physician” means a person holding a valid license
to practice medicine and surgery, osteopathic me dicine, podiatric
medicine, dentistry, chiropractic, or optometry, pursuant to the
state licensing provisions of Title 59 of the Oklahoma Statutes;
11. Compensating a reviewing physician, as defined in paragraph
10 of this subsection, on the basis of a pe rcentage of the amount by
which a claim is reduced for payment;
12. Violating the provisions of the Health Care Fraud
Prevention Act;
13. Compelling, without just cause, policyholders to institute
suits to recover amounts due under its insurance policies or
insurance contracts by offering substantially less than the amounts
Req. No. 1885 Page 19 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
ultimately recovered in suits brought by them, when the
policyholders have made claims for amounts reasonably similar to the
amounts ultimately recovered;
14. Failing to maintain a co mplete record of all complaints
which it has received during the preceding three (3) years or since
the date of its last financial examination conducted or accepted by
the Commissioner, whichever time is longer. This record shall
indicate the total number of complaints, their classification by
line of insurance, the nature of each complaint, the disposition of
each complaint, and the time it took to process each complaint. For
the purposes of this paragraph, “complaint” means any written
communication primarily expressing a grievance;
15. Requesting a refund of all or a portion of a payment of a
claim made to a claimant or health care provider more than twenty -
four (24) months after the payment is made. This pa ragraph shall
not apply:
a. if the payment was made because of fraud committed by
the claimant or health care provider, or
b. if the claimant or health care provider has otherwise
agreed to make a refund to the insurer for overpayment
of a claim;
16. Failing to pay, or requesting a refund of a paym ent, for
health care services covered under the policy if a health benefit
plan, or its agent, has provided a preauthorization or
Req. No. 1885 Page 20 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
precertification and verification of eligibility for those health
care services. This paragraph shall not apply if:
a. the claim or payment was made because of fraud
committed by the claimant or health care provider,
b. the subscriber had a preexisting exclusion under the
policy related to the service provided, or
c. the subscriber or employer failed to pay the
applicable premium and all grace periods and
extensions of coverage have expired; or
17. Denying or refusing to accept an application for life
insurance, or refusing to renew, cancel, restrict or otherwise
terminate a policy of life insurance, or charge a different rate
based upon the lawful travel destination of an applicant or insured
as provided in Section 4024 of this title.
SECTION 9. AMENDATORY 36 O.S. 2011, Section 1250.7, as
amended by Section 7, Chapter 95, O.S.L. 2018 (36 O.S. Supp. 2020 ,
Section 1250.7), is amended to read as follows:
Section 1250.7. A. Within sixty (60) days after receipt by a
property and casualty insurer of properly executed proofs of loss,
the first party claimant shall be advised of the acceptance or
denial of the claim by the insurer, or if further investigation is
necessary. No property and casualty insurer shall deny a claim
because of a specific policy provision, condition, or exclusion
unless reference to such provision, condition, or exclusion is
Req. No. 1885 Page 21 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
included in the denial. A denial shall be given to any claimant in
writing, and the claim file of the property and casualty insurer
shall contain a copy of the denial. If there is a reasonable basis
supported by specific information available for review by the
Commissioner that the first party claimant has fraudulently caused
or contributed to the loss, a property and casualty insurer shall be
relieved from the requirements of this subsection. In the event of
a weather-related catastrophe or a major natural disaste r, as
declared by the Governor, the Insurance Commissioner may extend the
deadline imposed under this subsection an additi onal twenty (20)
days.
B. If a claim is denied for reasons other than those described
in subsection A of this section, and is made by any other means than
writing, an appropriate notation shall be made in the claim file of
the property and casualty insure r until such time as a written
confirmation can be made.
C. Every property and casualty insurer shall complete
investigation of a cla im within sixty (60) days after notification
of proof of loss unless such investigation cannot reasonably be
completed within such time. If such investigation cannot be
completed, or if a property and casualty insurer needs more time to
determine whether a claim should be accepted or denied, it shall so
notify the claimant within sixty (60) days after receipt of the
proofs of loss, giving reasons why more time is needed. If the
Req. No. 1885 Page 22 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
investigation remains incomplete, a property and casualty insurer
shall, within sixty (60) days from the date of the initial
notification, send to such claimant a letter setting forth the
reasons additional time is needed for investigation. Except for an
investigation of possible fraud or arson which is supported by
specific information giving a reasonable basis for the
investigation, the time for investigation shall not exceed one
hundred twenty (120) days after receipt of proof of loss. Provided,
in the event of a weather -related catastrophe or a major natural
disaster, as declared by the Governor, the Insurance Commissioner
may extend this deadline for investigation an additional twenty (20)
days.
D. Insurers shall not fail to settle first party claims on the
basis that responsibility for payment should be assumed by others
except as may otherwise be provided by policy provisions.
E. Insurers shall not continue or delay negotiations for
settlement of a claim directly with a claimant who is neither an
attorney nor represented by an attorney, for a length of time which
causes the claimant’s rights to be affected by a statute of
limitations, or a policy or contract time limit, without giving the
claimant written notice that the time limit is expiring and may
affect the claimant’s rights. Such notice shall be given to first
party claimants not more than ninety (90) days and not less than
thirty (30) days, and to third party claimants not more than ninety
Req. No. 1885 Page 23 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(90) days and not less than sixty (60) days, before the date on
which such time limit may expire.
F. No insurer shall make stateme nts which indicate that the
rights of a third party claimant may be impaired if a form or
release is not completed within a given period of time unless the
statement is given for the purpose of notifying a third party
claimant of the provision of a statute of limitations.
G. If a lawsuit on the claim is initiated, the time limits
provided for in this section shall not apply.
SECTION 10. AMENDATORY 36 O.S. 2011, Section 1250.8, is
amended to read as follows:
Section 1250.8. A. If an insurance policy or insurance
contract provides for the adjustment and settlement of first party
motor vehicle total lo sses, on the basis of actual cash value or
replacement with another of like kind and quality, one of the
following methods shall apply :
1. An insurer may elect to offer a replacement motor vehicle
which is a specific comparable motor vehicle available to the
insured, with all applicable taxes, license fees, and other fees
incident to the transfer of evidence of ownership of the motor
vehicle paid, at no cost to the insured other than any deductible
provided in the policy. The offer and any rejection there of shall
be documented in the claim file; or
Req. No. 1885 Page 24 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. An insurer may elect a cash settlement based upon the actual
cost, less any deductibl e provided in the policy, to purchase a
comparable motor vehicle, including all applicable taxes, license
fees and other fees incident to a transfer of evidence of ownership,
or a comparable motor vehicle. Such cost may be determined by:
a. the cost of a comparable motor vehicle in the local
market area when a comparable motor vehicle is
currently or recently available in th e prior ninety
(90) days in the local market area,
b. one of two or more quotations obtained by an insurer
from two or more qualified dealers located within the
local market area when a comparable motor vehicle is
not available in the local market area, or
c. the cost of a comparable motor vehicle as quoted in
the latest edition of the National Automobile Dealers
Association Official Use d Car Guide or monthly edition
of any other nationally recognized published
guidebook.
B. If a first party motor vehicle total loss is settled on a
basis which deviates from the methods described in subsection A of
this section, the deviation shall be sup ported by documentation
giving particulars of the condition of the motor vehicle. Any
deductions from such cost, includin g, but not limited to, deduction
for salvage, shall be measurable, discernible, itemized and
Req. No. 1885 Page 25 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
specified as to dollar amount and shall b e appropriate in amount.
The basis for such settlement shall be fully explained to a first
party claimant.
C. If liability for motor vehicle damages is reasonably clear,
insurers shall not recommend that third party claimants make claims
pursuant to the third party claimants’ own policies solely to avoid
paying claims pursuant to such insurer ’s insurance policy or
insurance contract.
D. Insurers shall not require a claimant to travel unreasonably
either to inspect a replacement motor vehicle, obtain a re pair
estimate or have the motor vehicle repaired at a specific repair
shop.
E. Insurers shall, upon the request of a clai mant, include the
deductible of a first party claimant, if any, in subrogation
demands. Subrogation recoveries shall be shared on a p roportionate
basis with a first party claimant, unless the deductible amount has
been otherwise recovered. No deduction f or expenses shall be made
from a deductible recovery unless an outside attorney is retained to
collect such recovery. The deduction s hall then be made for only a
pro rata share of the allocated loss adjustment expense.
F. If an insurer prepares an estima te of the cost of automobile
repairs, such estimate shall be in an amount for which it reasonably
may be expected that the damage can be repaired satisfactorily. An
insurer shall give a copy of an estimate to a claimant and may
Req. No. 1885 Page 26 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
furnish to the claimant the names of one or more conveniently
located repair shops, if requested by the claimant.
G. If an amount claimed is reduced because of betterment or
depreciation, all information for such reduction shall be contained
in the claim file. Such deductions shal l be itemized and specified
as to dollar amount and shall be appropriate for the amount of
deductions.
H. An insurer or its represent ative shall not require a
claimant to obtain motor vehicle repairs at a specific repair
facility. An insurer or its repre sentative shall not require a
claimant to obtain motor vehicle glass repair or replacement at a
specific motor vehicle glass repair or replacement facility. An
insurer shall fully and promptly pay for the cost of the motor
vehicle repair services or produ cts, less any applicable deductible
amount payable according to the terms of the policy. The claimant
shall be furnished an itemized priced statement of repairs by the
repair facility at the time of acceptance of the repaired motor
vehicle. Unless a cash settlement is made, if a claimant selects a
motor vehicle repair or motor vehicle glass repair or replacement
facility, the insurer s hall provide payment to the facility or
claimant based on a competitive price, as established by that
insurer through mark et surveys or by the insured through competitive
bids at the insured’s option, to determine a fair and reasonable
Req. No. 1885 Page 27 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
market price for sim ilar services. Reasonable deviation from this
market price is allowed based on the facts in each case.
I. An insurer shall not use as a basis for cash settlement with
a first party claimant an amount which is less than the amount which
an insurer would pay if repairs were made, other than in total loss
situations, unless such amount is agreed to by the insured.
J. An insurer shall not force a claimant to execute a full
settlement release in order to settle a property damage claim
involving a personal inj ury.
K. All payment or satisfaction of a claim for a motor vehicle
which has been transferred by title to the insurer sha ll be paid by
check or, draft or electronic payment , payable on demand.
L. In the event of payment of a total loss to a third party
claimant, the insurer shall include any registered lienholder as
copayee to the extent of the lienholder ’s interest.
M. As used in this section, “total loss” means that the vehicle
repair costs plus the salvage value of the vehicle meets or ex ceeds
the actual cash value of the motor vehicle prior to the loss, as
provided in used automobile dealer guidebooks.
N. An insurer shall not offer a cash settlement as provided in
paragraph 2 of subsection A of this section for the purchase of a
comparable motor vehicle and then subsequently sell the motor
vehicle which has been determined to be a total loss back to the
claimant if the insurer has determined that the repair of the
Req. No. 1885 Page 28 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
vehicle would not result in the vehicle being restored to operative
condition as provided in Section 1111 of Title 47 of the Oklahoma
Statutes unless the claimant specifies in writing or via an
electronic signature that the claimant understands that the motor
vehicle shall be titled as a “junked vehicle”.
SECTION 11. AMENDATORY 36 O.S. 2011, Section 1435.20, as
last amended by Section 1, Chapter 263, O.S.L. 2019 (36 O.S. Supp.
2020, Section 1435.20), is amended to read as follows:
Section 1435.20. A. A limited lines producer may receive
qualification for a license in one or more of the following
categories:
1. Prepaid legal liability insurance, which means the
assumption of an enforceable contractual obligation to provide
specified legal services or to reimburse policyholders for specified
legal expenses, pursuant to the provisions of a group or individual
policy;
2. Crop - insurance providing protection against damage to
crops from unfavorable weather conditions, fire or lightning, flood,
hail, insect infestation, disease or other yield -reducing conditions
or perils provided by the private insurance market, or that is
subsidized by the Federal Crop Insurance Corporation, including
Multi-Peril Crop Insurance;
3. Car rental - insurance offered, sold or solicited in
connection with and incidental to the rental of renta l cars for a
Req. No. 1885 Page 29 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
period of two (2) years, whether at the rental office or by
preselection of coverage in master, corporate, group or individual
agreements that:
a. is nontransferable,
b. applies only to the rental car that is the subject of
the rental agreement, and
c. is limited to the following kinds of insurance:
(1) personal accident insurance for renters and other
rental car occupants, for accidental death or
dismemberment, and for medical expenses resulting
from an accident that occurs with the rental car
during the rental period,
(2) liability insurance that provides protection to
the renters and other authorized drivers of a
rental car for liability arising from the
operation or use of the rental car during the
rental period,
(3) personal effects insuran ce that provides coverage
to renters and other vehicle occupants for loss
of, or damage to, personal effects in the rental
car during the rental period,
(4) roadside assistance and emergency sickness
protection insurance, or
Req. No. 1885 Page 30 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(5) any other coverage designat ed by the Insurance
Commissioner.
A car rental limited lines license issued to a rental or leasing
company shall authorize any employee or authorized representative of
the rental or leasing company to sell or offer coverage at each
location at which the re ntal or leasing company operates. Employees
or authorized representatives are not required to be individually
licensed;
4. Credit - credit life, credit disability, credit property,
credit unemployment, involuntary unemployment, mortgage life,
mortgage guaranty, mortgage disability, guaranteed automobile
protection insurance, or any other form of insurance offered in
connection with an extension of credit that is limited to partially
or wholly extinguishing that credit obligation and that is
designated by the Insurance Commissioner as limited line credit
insurance;
5. Surety - insurance or bond that covers obligations to pay
the debts of, or answer for the default of another, including
faithlessness in a position of public or private trust. For purpose
of limited line licensing, surety does not include surety bail
bonds;
6. Travel; and
7. Self-service storage insurance, pursuant to Section 2 of
this act 1435.20a of this title; and
Req. No. 1885 Page 31 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
8. Motor Service Club limited lines producer, pursuant to
Sections 3101 et seq. of this title.
B. 1. An insurance producer or limited lines producer may
solicit applications for and issue travel accident policies or
baggage insurance by means of mechanical vending machines supervised
by the insurance producer or limited lines producer only if the
Insurance Commissioner shall determine that the form of policy to be
sold is reasonably suited for sale and issuance through vending
machines, that use of vending machines for the sale of policies
would be of convenience to the public , and that the type of vending
machine to be used is reasonably suitable and practical for the sale
and issuance of policies. Policies so sold do not have to be
countersigned.
2. The Commissioner shall issue to the insurance agent or
limited insurance re presentative a special vending machine license
for each such machine to be used. The license shall specify the
name and address of the insurer and licensee, the kind of insurance
and type of policy to be sold, and the place where the machine is to
be in operation. The license shall expire, be renewable, and be
suspended or revoked coincidentally with the insurance agent license
or limited representative license of the licensee. The license fee
for each vending machine shall be that stated in the provisio ns of
Section 1435.23 of this title. Proof of existence of the license
Req. No. 1885 Page 32 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
shall be displayed on or about each machine in such manner as the
Commissioner may reasonably require.
SECTION 12. AMENDATORY 36 O.S. 2011, Section 1445, is
amended to read as follows:
Section 1445. A. All insurance charges or premiums collected
by an administrator for an insurer or trust and all return premiums
received from the insurer or trust shall be held by the
administrator in a fiduciary capacity. The se funds shall be
immediately remitted to the person entitled to the funds or shall be
deposited promptly in a fiduciary bank account established and
maintained by the administrator.
B. If charges or premiums deposited in a fiduciary account have
been collected for more than one insurer or trust, the administrator
shall keep records showing the deposits to and withdrawals from the
account for each insurer or trust. The administrator, upon request
of an insurer or trust, shall furnish copies of the records
pertaining to deposits to and withdrawals from the account for that
insurer or trust.
C. The administrator shall not pay any claim by withdrawals
from a fiduciary account unless provisions for said withdrawals are
included in the written agreement betwee n the insurer or trust and
the administrator. The written agreement shall authorize
withdrawals by the administrator from the fiduciary account only
for:
Req. No. 1885 Page 33 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. remittance to an insurer or trust entitled to a remittance;
or
2. deposit in an account maintain ed in the name of an insurer
or trust; or
3. transfer to and deposit in an account established for
payment of claims, as provided for b y subsection D of this section;
or
4. payment to a group policyholder for remittance to the
insurer or trust entitled t o such remittance; or
5. payment of commission, fees, or charges to the
administrator; or
6. remittance of return premiums to the pers on entitled to such
return premiums.
D. All claims paid by the administrator from funds collected on
behalf of the insurer or trust shall be paid on drafts or, checks or
electronic payment authorized by the insurer or trust.
SECTION 13. AMENDATORY 36 O.S. 2011, Section 1450, as
amended by Section 6, Chapter 294, O.S.L. 2019 (36 O.S. Supp. 2020,
Section 1450), is amended to read as follows:
Section 1450. A. No person shall act as or present himself or
herself to be an administrato r, 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.
Req. No. 1885 Page 34 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
B. An administrator shall not be eligible for a nonresident
administrator license under this section if the administrator does
not hold a home state certificate of authority or licens e in a state
that has adopted the Third -party Administrator Act or that applies
substantially similar provisions as are contained in the Third-party
Administrator Act to that administrator. If the Third -party
Administrator 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 Third-party
Administrator Act to that administrator, then that omission shall
not operate to disqualify the admin istrator from receiving a
nonresident administrator license in this state.
1. “Home state” means the United States jurisdiction that ha s
adopted the Third-party Administrator Act or a substantially similar
law governing third-party administrators and whic h has been
designated by the administrator as its principal regulator. The
administrator may designate either its state of incorporatio n or its
principal place of business within the United States if that
jurisdiction has adopted the Third -party Administrator 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 Third -
party Administrator Act or a substantial ly similar law governing
third-party administrators, then the third -party administrator shall
Req. No. 1885 Page 35 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
designate a United States jurisdiction in which it does business and
which has adopted the Third -party Administrator Act or a
substantially similar law governing third-party administrators. For
purposes of this definition paragraph, “United States jurisdiction ”
means the District of Columbia or a state or territory of the United
States.
2. “Nonresident administrator ” means a person who is applying
for licensure or is licensed in any state other than the
administrator’s home state.
C. In the case of a partnership which has been licensed, each
general partner shall be named in the license licensed and shall
qualify therefore as though an individual licensee. The
Commissioner shall charge 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 fifteen (15) 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 entity or partnership person
making application as an administrator or currently licensed as
administrators an administrator under the Third-party Administrators
Act shall provide a National Association of Insurance Commissioner
(NAIC) Biographical Affidavits Affidavit and a comprehensive r eview
of the background report by an independent third -party NAIC-approved
Req. No. 1885 Page 36 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
vendor as required for domestic insurers purs uant to the insurance
laws of this state.
D. An application for an administrator ’s license shall be in a
form prescribed by the Commiss ioner and shall be accompanied by a
fee of One Hundred Dollars ($100.00). This fee shall not be
refundable if the appli cation is denied or refused for any reason by
either the applicant or the Commissioner.
E. The administrator ’s license shall continue i n force no
longer than twelve (12) months from the original month of issuance.
Upon filing a renewal form prescribed by the Commissioner,
accompanied by a fee of One Hundred Dollars ($100.00), the license
may be renewed annually for a one -year term. Late application for
renewal of a license shall require a fee of double the amount of the
original license fee. The adminis trator shall submit, together with
the application for renewal, a list of the names and addresses of
the persons with whom the administr ator has contracted in accordance
with Section 1443 of this title. The Commissioner shall hold this
information confidential except as provided in Section 1443 of this
title.
F. 1. The administrator ’s license shall be issued or renewed
by the Commissioner unless, after notice and opportunity for
hearing, the Commissioner determines that the administrator is not
competent, trustworthy, or financially responsible, or has had any
insurance license denied for cause by any state, has been convicted
Req. No. 1885 Page 37 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
or has pleaded guilty or nolo contendere to any felony or to a
misdemeanor involving moral turpitude or dishonesty.
2. The administrator shall report to the Insurance Commissioner
any administrative or criminal action taken against the
administrator in another juri sdiction 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 as a result of
the administrative or criminal action, or other relevant legal
documents.
3. Any entity making application to the Oklahoma Insurance
Department as a third-party administrator (TPA) or within thirty
(30) days of a change for a licensed TPA shall provide 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 insur ers pursuant to
the laws of this state.
G. After notice and opportunity for hearing, and upon
determining that the administrator has vi olated any of the
provisions of the Oklahoma Insurance Code or upon finding reasons
for which the issuance or nonrenewal of such license could have been
Req. No. 1885 Page 38 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
denied, the Commissioner may either suspend or revoke an
administrator’s license or assess a civil pena lty of not more than
Five Thousand Dollars ($5,000.00) for each occurrence. The payment
of the penalty may be enforced in the same manner as civil judgments
may be enforced.
H. Any person who is acting as or presenting himself or herself
to be an administrator without a valid license shall be subject,
upon conviction, to a fine of not less than One Thousand Dollars
($1,000.00) nor more than Ten Thousand Dollars ($10,000.00) for each
occurrence. This fine shall be in addition to any other penalties
which may be imposed for violations of the Oklahoma Insurance Code
or other laws of this state.
I. Except as provided for in subsections F and G of this
section, any person convicted of violating any provisions of the
Third-party Administrator Act shall be guil ty of a misdemeanor and
shall be subject to a fine of not more than One Thousand Dollars
($1,000.00).
SECTION 14. AMENDATORY 36 O.S. 2011, Section 2004, is
amended to read as follows:
Section 2004. As used in the Oklahoma Property and Casualty
Insurance Guaranty Association Act:
1. “Affiliate” means a person who directly or indirectly,
through one or more intermediaries, controls, is controlled by, or
is under common control with another person on December 31 of the
Req. No. 1885 Page 39 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
year next preceding the date the insurer becomes an insolvent
insurer;
2. “Association” means the Oklahoma Property and Casualty
Insurance Guaranty Association as created in Section 2005 of this
title;
3. “Assumed claims transaction ” means:
a. policy obligations that have been assumed by the
insolvent insurer, prior to the entry of a final
order of liquidation, pursuant to a plan, appr oved by
a domestic commissioner of the assuming insurer,
which transfers the direct policy obligations and
future policy renewals from one insurer to another
insurer, or
b. an assumption reinsurance transaction in which all of
the following have occurred:
(1) the insolvent insurer assumed, prior to the
entry of a final order of liquidation, the claim
or policy obligations of another insurer under
the claims or policies,
(2) the assumption of the claim or policy
obligations has been approved, if an approval is
required, by the appropriate regulatory
authorities, and
Req. No. 1885 Page 40 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(3) as a result of the assumption, the claim or
policy obligations became the direct obligations
of the insolvent insurer through novation of the
claims or policies;
4. “Claimant” means any person instituting a covered claim;
provided that no person who is an affiliate of the insolvent insurer
may be a claimant;
5. “Commissioner” means the Insurance Commissioner of Oklahoma;
6. “Control” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for goods
or nonmanagement services, or otherwise, unless the power is the
result of an official position with or corporate office held by the
person. Control shall be presumed to exist if a person, directly or
indirectly, owns, controls, holds with the power to vote, or holds
proxies representing ten percent (10%) or more of the vot ing
securities of any other person. This presumption may be rebutted by
a showing that control does not exist in fact;
7. “Covered claim” means:
a. an unpaid claim, including one of unearned premiums,
submitted by a claimant, which arises out of and is
within the coverage and is subject to the applicable
limits of an insurance policy to which this act
Req. No. 1885 Page 41 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
applies, if the insurer becomes an insolvent insurer
after the effective date of this act and the policy
was issued by the insurer, and:
(1) the claimant or insured is a resident of this
state at the time of the insured event, provided
that for entities other than an individual, the
residence of a claimant or insured is the state
in which its principal place of business is
located at the time of the insured e vent, or
(2) the property from which the claim arises is
permanently located in this state ,
b. “Covered claim” shall not include:
(1) any amount awarded as punitive or exemplary
damages,
(2) any amount sought as a return of premium under
any retrospective ratin g plan,
(3) any amount due any reinsurer, insurer, insurance
pool, or underwriting association, health
maintenance organization, hospital plan
corporation, professional health service
corporation or self-insurer as subrogation
recoveries, reinsurance recov eries, contribution,
indemnification or otherwise. No claim for any
amount due any reinsurer, insurer, insurance
Req. No. 1885 Page 42 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
pool, or underwriting association, health
maintenance organization, hospital plan
corporation, professional health service
corporation or self-insurer may be asserted
against a person insured under a policy issued by
an insolvent insurer other than to the extent the
claim exceeds the association obligation
limitations set for in S ection 2007 of this
title,
(4) any claims excluded pursuant to Sec tion 15 of
this act due to the high net worth of an insured,
(5) any first party claims by an insured that is an
affiliate of the insolvent company,
(6) any fee or other amount relating to g oods or
services sought by or on behalf of any attorney
or other provider of goods and services retained
by the insolvent insurer or an insured prior to
the date it was determined to be insolvent,
(7) any fee or other amount sought by or on behalf of
any attorney or other provider of goods and
services retained by any in sured or claimant in
connection with the assertion or prosecution of
any claim, covered or otherwise, against the
Association,
Req. No. 1885 Page 43 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(8) any claims for interest, or
(9) any claim filed with the as sociation or a
liquidator for protection afforded under the
policy of the insured for incurred -but-not-
reported losses, or
(10) notwithstanding any other provision of this act
or any other law to the contrary, a claim that is
filed with the association on a date that is
later than eighteen (18) months after the date of
the order of liquidation or that is unknown and
unreported as of said date; provided, however,
that this shall not include any claim for
workers’ compensation benefits pursuant to Title
85A of the Oklahoma Statutes and the applicable
rules of OAC Title 810 ;
8. “Insolvent insurer” means an insurer that is licensed to
transact insurance in this state either at the time the policy was
issued, when the obligation with respect to the covered claim was
assumed under an assumed claims transaction, or when the insu red
event occurred and against whom a final order of liquidation has
been entered after the effective date of this act with a finding of
insolvency by a court of competent jurisdiction in th e state of
domicile of the insurer;
Req. No. 1885 Page 44 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
9. “Insured” means any named insured, any additional insured,
any vendor, lessor or any other party identified as an insured under
the policy;
10. a. “Member insurer” means any person who:
(1) writes any kind of insura nce to which the
Oklahoma Property and Casualty Insurance Guaranty
Association Act applies pursuant to Section 2003
of this title, including the exchange of
reciprocal or inter-insurance contracts, and
(2) is licensed to transact insurance in this state,
except those insurers enumerated in Section 110
of this title or those insurers that are
otherwise exempted by law or order of the
Commissioner.
b. An insurer shall cease to be a member insurer
effective on the day following the termination or
expiration of its license to transact the kinds of
insurance to which the Oklah oma Property and Casualty
Insurance Guaranty Association Act applies; however,
the insurer shall be liable as a member insurer for
any and all obligations, including but not limited to
obligations for assessments levied after the
termination or expiration, which relate to any insurer
that becomes an insolvent insurer prior to the
Req. No. 1885 Page 45 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
termination or expiration of the license of the
insurer;
11. “Net direct written premiums ” means direct gross pre miums
written in this state on insurance policies to which this ac t
applies, including but not limited to policy and membership fees,
less the following amounts:
a. return premiums,
b. premiums on policies not taken, and
c. dividends paid or credited to po licyholders on direct
business. “Net direct written premiums ” does not
include premiums on contracts between insurers or
reinsurers;
12. “Novation” means that the assumed claim or policy
obligations became the direct obligations of the insolvent insurer
through consent of the policyholder and that thereafter the ceding
insurer or entity initially obligated under the claims or policies
is released by the policyholder from pe rforming its claim or policy
obligations. Consent shall be express and an implied novation shall
not be allowed for the purposes, implementation and application of
the Oklahoma Property and Casualty Insurance Guaranty Association
Act;
13. “Person” means the individual or other entities as defined
in Section 104 of this title;
Req. No. 1885 Page 46 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
14. “Receiver” means liquidator, rehabilitator, conservator or
ancillary receiver, as the context requires; and
15. “Self-insurer” means a person who covers its liability
through a qualified individual or group self -insurance program or
any other formal program created for the specific purpose of
covering liabilities typically covered by insurance.
SECTION 15. AMENDATORY 36 O.S. 2011, Section 2006, as
amended by Section 1, Chapter 78, O.S.L. 2014 (36 O.S. Supp. 2020,
Section 2006), is amended to read as follows:
Section 2006. A. The business and functi ons of the Oklahoma
Property and Casualty Insurance Guaranty Association shall be
managed and administered by a board of twelve (12) directors
composed of two members selected by the American Insurance
Association who are member insurers; at the expiration of the terms
of the members selected by the Alliance of American Insurers who are
serving on November 1, 2 014, two members selected by the Property
and Casualty Insurers Association of America who are member
insurers; at the expiration of the terms of the members selected by
the National Association of Independent Insurers who are serving on
November 1, 2014, two members selected by the National Association
of Mutual Insurance Companies who are member insurers; two Oklahoma
domestic insurers who are member insurers; two nonaffiliated foreign
or alien insurers who are member insurers; two insurance agents who
shall serve as ex officio members on the board domestic, foreign and
Req. No. 1885 Page 47 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
alien insurers who are member insurers, including a minimum of two
domestic insurers, and two insurance agents who shall serve as ex
officio members. In determining candidates to fill the member
insurer positions, the board shall consider whether all insurers are
fairly represented, including workers ’ compensation insurers and
other property and casualty insurers . One of the ex officio members
shall be the Executive Director of the Indepen dent Insurance Agents
of Oklahoma, Inc.; the other ex officio member shall be a licensed,
resident property and casualty insurance agent chosen by th e
Governor. Each member of the board of directors shall designate a
full-time salaried employee to represe nt it on the board of
directors. Each member except for the ex officio members shall
serve for a term of two (2) years. The ex officio member who i s
appointed by the Governor shall serve at the pleasure of the
Governor. Each appointed member insurer rep resentative may
designate an alternate representative to represent the insurer at
any meeting of the board. Any person serving as an alternate
representative shall, while serving, have all the powers and
responsibilities of the appointed insurer represent ative. The
members of the board of directors except for the ex officio members
shall be subject to approval by the Insurance Commissioner.
Vacancies on the board except for the ex officio members shall be
filled for the remaining period of the term by a majority vote of
the remaining board members, subject to the approval of the
Req. No. 1885 Page 48 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Commissioner. If no members are selected and appointed within sixty
(60) days after the effective date of this act, the Commissioner may
appoint the initial members of the board of directors.
B. In approving selections to the board, the Commissioner shall
consider, among other things, whether all member insurers are fairly
represented.
C. Members of the board shall serve without compensation but
may be reimbursed from the assets of the Association for expenses
incurred by them as members of the board of directors.
SECTION 16. AMENDATORY 36 O.S. 2011, Section 2007, is
amended to read as follows:
Section 2007. A. The Oklahoma Property and Casualty Insuran ce
Guaranty Association shall:
1. Be obligated to pay the covered claims existing prior to the
determination of insolvency if the claims arise withi n thirty (30)
days after the determination of insolvency, or before the policy
expiration date if less than thirty (30) days after the
determination, or before the insured replaces the policy or causes
its cancellation, if the insured does so within thirty (30) days of
the determination. The obligation shall be satisfied by paying to
the claimant an amount as follows:
a. the full amount of a covered claim for benefits under
a workers’ compensation insurance coverage,
Req. No. 1885 Page 49 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. an amount not exceeding Ten Thousand Dollars
($10,000.00) per policy for a covered claim for the
return of unearned premium, and
c. an amount not exceeding One Hundred Fifty Thousand
Dollars ($150,000.00) per claimant for all other
covered claims.
In no event shall the Association be obligat ed to pay a claimant
an amount in excess of the obligation of the insolvent insurer under
the policy or coverage from which the claim arises or in excess of
the limits of the obligation of the Association existing on the date
on which the order of liquidat ion is filed with the court clerk;
2. Any obligation of the association to defend an insured shall
cease upon the payment or tender by the association of an amount
equal to the lesser of the covered claim obligation limit of the
association or the applica ble policy limit;
3. Be deemed the insurer to the extent of the obligations on
covered claims and to that extent subject to the limitations
provided in the Oklahoma Property and Casualty Insurance Guaranty
Association Act shall As payor of last resort, have all rights,
duties and obligations of the insolvent insurer as if the insurer
had not become insolvent , including, but not limited to, the right
to pursue and retain salvage and subrogation recoverable on covered
claim obligations to the extent paid by the association. The
Req. No. 1885 Page 50 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
association shall not be deemed the insolvent insurer for the
purpose of conferring j urisdiction;
4. Allocate claims paid and expenses incurred among the three
accounts set out in Section 2005 of this title separately, and
assess member insurers separately for each account amounts necessary
to pay the obligations of the Association under this section
subsequent to a member insurer becoming an insolvent insurer, the
expenses of handling covered claims subsequent to an insolvency, and
other expenses authorized by the Oklahoma Property and Casualty
Insurance Guaranty Association Act, Sections 2001 through 2020 of
this title and Sections 14 2020.1 and 15 2020.2 of this act title.
The assessments of each member insurer shall be in the prop ortion
that the net direct written premiums of the member insurer for the
calendar year preceding the asses sment on the kinds of insurance in
the account bear to the net direct written premiums of all
participating insurers for the calendar year preceding the
assessment on the kinds of insurance in the account. Each member
insurer shall be notified in writing of the assessment not later
than thirty (30) days before it is due. No member insurer may be
assessed in any year an amount greater than two percent (2%) of the
net direct written premiums of that member or one percent (1%) of
that surplus of the member i nsurer as regards policyholders for the
calendar year preceding the assessment on the kinds of insurance in
the account, whichever is less. If the m aximum assessment, together
Req. No. 1885 Page 51 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
with the other assets of the Association, does not provide in any
one (1) year in any account an amount sufficient to make all
necessary payments from that account, the funds available may be
prorated and the unpaid portion shal l be paid as soon thereafter as
funds become available. The Association shall pay claims in any
order which it deems reasonable, including the payment of claims as
the claims are received from the claimants or in groups or
categories of claims. The Assoc iation may exempt or defer, in whole
or in part, the assessment of any member insurer, if the assessment
would cause the financial statement of the member insurer to reflect
amounts of capital or surplus less than the minimum amounts required
for a certificate of authority by any jurisdiction in which the
member insurer is authorized to transact insurance. Dur ing the
period of deferment, no dividends shall be paid to shareholders or
policyholders. Deferred assessments shall be paid when the payments
will not reduce capital or surplus below required minimums. The
payments may be refunded to those companies rec eiving larger
assessments by virtue of the deferment, or, at the election of any
company credited against future assessments. Each member insurer
serving as a servicing facility may set off against any assessment
authorized payments made on covered claims and expenses incurred in
the payment of covered claims by a member insurer if they are
chargeable to the account for which the assessment is made;
Req. No. 1885 Page 52 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5. Investigate claims brought against the Association and
adjust, compromise, settle and pay covered claims to the extent of
the obligation of the Association and deny all other claims. The
Association shall pay claims in any order that it may deem
reasonable, including, but not limited to, the payment of claims as
they are received from claimants or in groups of categories of
claims. The Association shall have the right to select and to
direct legal counsel under liability insurance policies for the
defense of covered claims;
6. Notify claimants in this state as deemed necessary by the
Commissioner and upon the request of the Commissioner, to the extent
records are available to the Association . Notification may include,
but shall not be limited to, a le gal posting on the website of the
Association;
7. a. Handle claims through employees or through one or more
insurers or other persons incorporated and resident in
the State of Oklahoma designated as servicing
facilities. Designation of a servicing facilit y is
subject to approval of the Commissioner, but such
designation may be declined by a member insurer.
b. The Association shall have the right to review and
contest as set forth in this paragraph, settlements,
releases, compromises, waivers and judgments to which
the insolvent insurer or its insureds were parties
Req. No. 1885 Page 53 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
prior to the entry of the order of liquidation. In an
action to enforce settlements, releases and judgments
to which the insolvent insurer or its insureds were
parties prior to the entry of the o rder of
liquidation, the Association shall have the right to
assert the following defenses:
(1) the Association shall not be bound by a
settlement, release, compromise or waiver
executed by an insured or the insurer, or any
judgment entered against the ins ured or the
insurer by consent or through a failure to
exhaust all appeals, if the settlement, release,
compromise waiver or judgment was:
(a) executed or entered within one hundred
twenty (120) days prior to the entry of an
order of liquidation, and the i nsured or the
insurer did not use reasonable care in
entering into the settlement, release,
compromise, waiver or judgment, or did not
pursue all reasonable appeals of an adverse
judgment, or
(b) executed by or taken against an insured or
the insurer based on default, fraud,
Req. No. 1885 Page 54 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
collusion or the failure of the insurer to
defend,
(2) if a court of competent jurisdiction finds that
the Association is not bound by a settlement,
release, compromise, waiver or judgment for the
releases provided for in division (1) o f
subparagraph b of this paragraph, the settlement,
release, compromise, waiver or judgment shall be
set aside and the Association shall be permitted
to defend any covered claim on the merits. The
settlement, release, compromise, waiver or
judgment shall not be considered as evidence of
liability in connection wit h any claim brought
against the Association or any other party
pursuant to the Oklahoma Property and Casualty
Insurance Guaranty Association Act, and
(3) the Association shall have the right to as sert
any statutory defenses or rights of offset
against any settlement, release, compromise or
waiver executed by an insured or the insurer, or
any judgment taken against the insured or the
insurer.
c. As to any covered claims arising from a judgment under
any decision, verdict or finding based on the default
Req. No. 1885 Page 55 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
of the insolvent insurer or its failure to defend, the
Association, either on its own behalf or on behalf of
an insured, may apply to have the judgment, order,
decision, verdict or finding set aside by the same
court or administrator that entered the judgment,
claim, decision, verdict or finding and shall be
permitted to defend on the merits;
8. Reimburse each servicing facility for obligations of the
Association paid by the facility and for reasonable expenses
incurred by the facility while handling claims on behalf of the
Association and pay the other expenses of the Association authorized
by the Oklahoma Property and Casualty Insurance Guaranty Association
Act; and
9. Have standing to appear before any court of this state which
has jurisdiction over an impai red or insolvent insurer for whom the
Association is or may become obligated pursuant to the provisions of
the Oklahoma Property and Casualty Insurance Guaranty Association
Act. Standing shall ex tend to all matters germane to the powers and
duties of the Association including, but not limited to, proposals
for rehabilitation, acquisition, merger, reinsuring, or guaranteeing
the covered policies of the impaired or insolvent insurer, and the
determination of covered policies and contractual obligations of th e
impaired or insolvent insurer ; and
Req. No. 1885 Page 56 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
10. Notwithstanding any other provision of the Oklahoma
Property and Casualty Insurance Guaranty Association Act , an
insurance policy issued by a member insur er and later allocated,
transferred, assumed by or otherwise made the sole responsibility of
another insurer pursuant to any provision of law providing for the
division of an insurance company, or the statutory assumption or
transfer of designated policies under which there is no remaining
obligation to the transfe rring entity, shall be considered to have
been issued by a member insurer which is an insolvent insurer for
the purposes of this Act in the event that the insurer to which the
policy has been allo cated, transferred, assumed or otherwise made
the sole responsibility of is placed in liquidation. An insurance
policy that was issued by an insurer who is not a member insurer and
subsequently allocated, transferred, assumed by or otherwise made
the sole responsibility of a member insurer under any provision of
law providing for the division of an insurance company shall not be
considered to have been issued by a member insurer pursuant to this
Act.
B. The Association may:
1. Employ or retain persons as are necessary to handle claims
and perform other duties of the Association;
2. Borrow funds necessary to effect the purposes of the
Oklahoma Property and Casualty Insurance Guaranty Association Act in
accordance with the plan of operation;
Req. No. 1885 Page 57 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. Sue or be sued;
4. Negotiate and become a party to contracts as are n ecessary
to carry out the purpose of the Oklahoma Property and Casualty
Insurance Guaranty Association Act;
5. Refund to member insurers in proportion to the contribution
of each member insurer t hat amount by which the assets of the
Association exceed its liabilities, if at the end of any calendar
year the board of directors finds that the assets of the Association
exceed the liabilities as estimated by the board of directors for
the coming year;
6. Lend monies to an insurer declared to be impaired by the
Commissioner. The Association, with approval of the Commissioner,
shall approve the amount, length and terms of the loan. “Impaired
Insurer” for purposes of this paragraph section shall mean an
insurer potentially unable to fulfill its contractual obligations,
but shall not mean an insolvent insurer;
7. Perform other acts as are necessary or proper to effectuate
the purpose of the Oklahoma Property and C asualty Insurance Guaranty
Association Act;
8. Intervene as a party in interest in any supervision,
conservation, liquidation, rehabilitation, impairment or
receivership in which policyholders ’ interests and interests of the
Association may be or are affe cted; and
Req. No. 1885 Page 58 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
9. Be designated or may contra ct as a servicing facility for
any entity which may be recommended by the board of directors of the
Association and shall be approved by the Commissioner.
SECTION 17. AMENDATORY 36 O.S. 2011, Section 2008, is
amended to read as fol lows:
Section 2008. A. The Oklahoma Property and Casualty Insurance
Guaranty Association shall submit to the Commissioner a plan of
operation and any amendments thereto necessary or suitable to assure
the fair, reasonable and equ itable administration of t he
Association. The plan of operation and any amendments thereto shall
become effective upon approval in writing by the Commissioner.
B. If the Association fails to submit a suitable plan of
operation within ninety (90) days fol lowing the effective date of
this act June 27, 1980, or if at any time thereafter the Association
fails to submit suitable amendments to the plan, the Commissioner
shall, after notice and hearing, adopt and promulgate reasonable
rules as are necessary or advisable to effectuate the provisions of
this act Section 2001 et seq. of this title . Any rules promulgated
shall continue in force until modified by the Commissioner or
superseded by a plan submitted by the Association and approved by
the Commissioner. All member insurers shall comply with the plan of
operation.
C. The plan of operation shall:
Req. No. 1885 Page 59 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. Establish the procedures whereby all the powers and duties
of the Association under this act will be performed;
2. Establish procedures for handling assets of the Association;
3. Require the amount and method of reimbursing members of the
board of directors under Section 2006 of this title;
4. Establish procedures by which claims may be filed with the
Association and establish acceptable forms of proof of covered
claims;
5. Establish regular places and tim es for meetings of the boa rd
of directors;
6. Require that the written procedures be established for
records to be kept of all financial transactions of the Association,
its agents and the board of directors;
7. Provide that any m ember insurer aggrieved by any final
action or decision of the Association may appeal to the Commissioner
within thirty (30) days after the action or decision;
8. Establish the procedures whereby selections for the board of
directors will be submitted to the Commissioner; and
9. Contain additional provi sions necessary or proper for the
execution of the powers and duties of the Association.
D. The plan of operation may provide that any or all powers and
duties of the Association, except those under paragr aph 3 of
subsection A and paragraph 2 of subsectio n B of Section 2007 of this
title, are delegated to a corporation, association or other
Req. No. 1885 Page 60 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
organization incorporated and resident in the State of Oklahoma
which performs or will perform functions similar to th ose of this
Association, or its equivalent. The corporation, association or
organization shall be reimbursed as a servicing facility would be
reimbursed and shall be paid for its performance of any other
functions of the Association. A delegation under t his subsection
shall take effect only with the app roval of both the board of
directors and the Commissioner, and may be made only to a
corporation, association or organization which extends protection
not substantially less favorable and effective than tha t provided by
this act Section 2001 et seq. of thi s title.
SECTION 18. AMENDATORY 36 O.S. 2011 , Section 2023, as
amended by Section 2, Chapter 384, O.S.L. 2019 (36 O.S. Supp. 2020,
Section 2023), is amended to read as follows:
Section 2023. A. There is created a nonp rofit legal entity to
be known as the Oklahoma Life and Health Insurance Guaranty
Association. All member insurers shall be and remain members of the
Association as a condition of their authority to transact insurance
as a or health maintenance organizati on business in this state.
B. The Association shall perform its functions under a plan of
operation established and approved in accordance with this act and
shall exercise its powers through the Board of Directors est ablished
in this act. For purposes of administration and assessment, the
Association shall maintain three accounts:
Req. No. 1885 Page 61 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. The health account;
2. The life insurance account; and
3. The annuity account.
C. The Association shall come under the immediate sup ervision
of the Insurance Commissioner and shall be subject to the applicable
provisions of the insurance laws of this state.
SECTION 19. AMENDATORY 36 O.S. 2011, Section 3101, is
amended to read as follows:
Section 3101. The words and phrases as As used in this act,
unless a different meaning is plainly required by the context, shall
have the following meanings :
1. “Commissioner” means the Commissioner of Insurance, his or
her assistants or deputies, or other persons authorized t o act for
him. or her;
2. “Company” means any person, firm, copartnership, company,
association or corporation engaged in selling, furnishing or
procuring, either as principal or agent producer, for a
consideration, motor club service .;
3. “Agent” “Producer” means a limited insurance represe ntative
who solicits the purchase of service co ntracts or transmits for
another any such contract, or application therefor, to or from the
company, or acts or aids in any manner in the delivery or
negotiation of any su ch contract, or in the renewal or cont inuance
Req. No. 1885 Page 62 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
thereof. This, however, shall not incl ude any person performing
only work of a clerical nature in the office of the motor club .;
4. “Towing service” means any act by a company which consists
of towing or moving a motor vehicle from one place to a nother under
other than its own power .;
5. “Emergency road service” means any act by a company to
adjust, repair or replace the equipment, tires or mechanical parts
of a motor vehicle so it may operate under its own p ower; or
reimbursement of expenses inc urred by a member when his or her motor
vehicle is unable to operate under its own power .;
6. “Insurance service” means any act to sell or give to the
holder of a service contract or as a result of membership in or
affiliation with a company a policy of i nsurance covering the holder
for liability or loss for personal injury or property damage
resulting from the ownership, maintenance, operation or use of a
motor vehicle.;
7. “Bail bond service” means any act by a comp any to furnish or
procure a cash depos it, bond or other undertaking required by law
for any person accused of a law violation of this state, pending the
trial.;
8. “Discount service” means any act by a company resulting in
special discounts, rebates or re ductions of price on gasoline, oil,
repairs, insurance, parts, accessories or service for motor vehicles
to holders of service contracts .;
Req. No. 1885 Page 63 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
9. “Financial service” means any act by a company to loan or
otherwise advance monies, with or without security, to a service
contract holder.;
10. “Buying and selling service ” means any act by a comp any to
aid the holder of a service contract in the purchase or sale of an
automobile.;
11. “Theft service” means any act by a company to locate,
identify or recover a sto len or missing motor vehicle owned or
controlled by the holder of a service contract or to detect or
apprehend the person guilty of such theft .;
12. “Map service” means any act by a company to furnish road
maps without cost to holders of service contracts .;
13. “Touring service” means any act by a company to furnish
touring information w ithout cost to holders of service contracts .;
14. “Legal service” means any act by a company to furnish to a
service contract holder, wit hout cost, the services of an att orney.;
15. “Motor club service” means the rendering, furnishing or
procuring of, or reimbursement for, towing service, emergency road
service, insurance service, bail bond service, legal service,
discount service, financi al service, buying and selling se rvice,
theft service, map service, tou ring service, or any three or more
thereof, to any person, in connection with the ownership, operation,
use or maintenance of a motor vehicle by such person , that has
membership, for consideration.; and
Req. No. 1885 Page 64 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
16. “Service contract” means any written agreement w hereby any
company, for a consideration, promis es to render, furnish or procure
for any person motor club service.
SECTION 20. AMENDATORY 36 O.S. 2011, Section 3105, is
amended to read as follo ws:
Section 3105. A. Each motor serv ice club operating in this
state pursuant to ce rtificate of authority issued hereunder shall
file with the Commissioner, within ten (10) days of the date of
employment, a notice of appo intment of any agent limited lines
producer, resident or nonresident, a ppointed by the automobile club
to sell memberships in the motor service club to the public. This
notification shall be upon such form as the Commissioner may
prescribe and shall conta in the name, address, age, sex, a nd Social
Security number of such club agent producer, and shall also contain
proof satisfactory to the Commissioner that such applicant is not
less than eighteen (18) years of age, is of good reputation, and has
received training from the club or is other wise qualified in the
field of motor service club service contracts and knowledgeable of
the laws of this state pertaining thereto. Upon termination of any
agent’s employment by the motor service club, such motor service
club shall notify the Commissioner , in writing, within five (5) days
of such termination.
B. A registration licensing fee for agents limited lines
producers, resident or nonresident, shall be Twenty Dollars ($20.00)
Req. No. 1885 Page 65 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
annually, and such registration shall ex pire on July 1 of each year
unless sooner revoked or suspended as provi ded for in this section
Forty Dollars ($40.00) biennially.
C. Upon notice and hearing, the Commissioner may suspend for
not over twelve (12) months , censure, revoke, or refuse to renew any
agent’s license of a producer if he finds as to the licensee that
any one or more of the following causes exist:
1. Any violation of or noncompliance with any provision of this
act;
2. Obtaining or attempting to obtain any such license through
misrepresentation or fraud;
3. Oral or written misrepresentation of the ter ms, conditions,
benefits, or privileges of any motor service club service contract
issued or to be issued by the motor service club he represents or
any other motor service club;
4. Misappropriation or conversion to h is own use or illegal
holding of monies, belonging to members or others, received in the
conduct of business under his license;
5. Pleading nolo contendere or guilty to a felony or conviction
by final judgment of a felony;
6. Demonstration of incompetenc e sufficient in the opinion of
the Commissioner to make the agent producer a source of injury and
loss to the public;
7. Fraudulent or dishonest practices;
Req. No. 1885 Page 66 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
8. Willful solicitation of membership from an individual who is
or has been a member of another mo tor service club by giving said
person credit for his years of membership with the ot her motor
service club;
9. Waiving the enrollment fee or otherwise reducing the usual
fees and charges for a new member when soliciting membership from an
individual who is or has been a member of another mot or service
club.
D. In addition to the penalti es provided for in this section, a
fine of not less than One Hundred Dollars ($100.00) nor more than
One Thousand Dollars ($1,000.00) for each occurrence may be levied.
SECTION 21. AMENDATORY 36 O.S. 2011, Section 3108, is
amended to read as follows:
Section 3108. A motor service club or an officer or agent
producer thereof shall not in any manner misrepresent the terms,
benefits or privileges of a ny service contract issued or to be
issued by it or by another motor service club.
SECTION 22. AMENDATORY 36 O.S. 2011, Section 3639.1, as
amended by Section 11, Chapter 44, O.S.L. 2012 (36 O.S. Supp. 2020,
Section 3639.1), is amen ded to read as follows:
Section 3639.1. A. No insurer shall cancel, refuse to renew or
increase the premium of a homeowner ’s insurance policy or any other
personal residential insurance coverage, which has been in effect
more than forty-five (45) days, solely because the insured filed a
Req. No. 1885 Page 67 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
first claim against the policy. The provisions of this section
shall not be construed to prevent the cancellation, nonrenewal or
increase in premium of a homeowner ’s insurance policy for the
following reasons:
1. Nonpayment of premium;
2. Discovery of fraud or material misrepresentation in the
procurement of the insurance or with respect to any claims submitted
thereunder;
3. Discovery of willful or reckless acts or omissions on the
part of the named insured which incre ase any hazard insured against;
4. A change in the risk which substantially increases any
hazard insured against after insurance coverage has been issued or
renewed;
5. Violation of any local fire, health, safety, building, or
construction regulation or ordinance with respect to any insured
property or the occupancy thereof which substantially increases any
hazard insured against;
6. A determination by the Insurance Commissioner that the
continuation of the policy would place the insurer in violation of
the insurance laws of this state; or
7. Conviction of the named insured of a crime having as one of
its necessary elements an act increasing any hazard insured against.
B. An insurer shall give to the named insured at the mailing
address shown on a homeo wner’s policy, a written renewal notic e that
Req. No. 1885 Page 68 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
shall include new premium, new d eductible, new limits or coverage at
least thirty (30) days prior to the expiration date of the policy.
If the insurer fails to provide such notice, the premium,
deductible, limits and coverage provided to the named insurer prior
to the change shall remai n in effect until notice is given or until
the effective date of replacement coverage obtained by the named
insured, whichever occurs first. If notice is given by mail, the
notice shall be deemed to have been given o n the day the notice is
mailed. If the insured elects not to renew, any earned premium for
the period of extension of the terminated policy shall be calculated
pro rata at the lower of the current or previous year ’s rate. If
the insured accepts the renew al, the premium increase, if any, and
other changes shall be effective the day following the prior
policy’s expiration or anniversary date.
C. An insurer shall make the cancellation of a homeowner ’s
insurance policy or any other personal residential insur ance
coverage effective as of the date of the inception of the new
coverage, upon receipt of notice indicating the new coverage was
obtained for the purpose of replacing the policy. Notice shall
include the date of po licy inception. If the date of inceptio n of
the new coverage is prior to the current policy term, the date of
cancellation shall be effective no earlier than the start of the
current policy term.
Req. No. 1885 Page 69 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
D. An insurer canceling a policy under subsection C of thi s
section shall not be liable for claims arising after the date of
cancellation.
SECTION 23. AMENDATORY 36 O.S. 2011, Section 4030, is
amended to read as follows:
Section 4030. A. Except as may be otherwise approved by the
Insurance Commissioner, no single premium poli cy of life insurance
or single premium annuity contract shall be delivered or issued for
delivery in Oklahoma for a consideration other than cash, cashier ’s
check, check, bank draft, money order, or premium note or electronic
payment. This act shall not a pply to the transfer of securities to
an insurer pursuant to the insuring of a pension or profit sharing
plan qualified under the Federal Internal Revenue Code.
B. This act shall not be held to repeal or alter any l aw now in
effect, but shall be construed as cumulative with and supplemental
to other laws and acts now in effect or enacted hereafter.
SECTION 24. AMENDATORY 36 O.S. 2011, Section 4030.1, is
amended to read as follows:
Section 4030.1. A. Within ten (10) days after an insurer
receives written notification of the d eath of a person covered by a
policy of life insurance, the insurer shall provide to the claimant
the necessary forms to be completed to establish proof of the death
of the insured and, if required by the polic y, the interest of the
claimant. If the polic y contains a provision requiring surrender of
Req. No. 1885 Page 70 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the policy prior to settlement, the insurer shall include a written
statement to that effect with the forms to be completed. Forms to
establish proof of death and proof of the interest of the claimant
shall be approved by the Insurance Commissioner.
B. An insurer shall pay the proceeds of any benefits under a
policy of life insurance not more than thirty (30) days after the
insurer has received proof of death of th e insured. If the proceeds
are not paid within this period, the insurer shall pay interest on
the proceeds, at a rate which is not less than the current rate of
interest on death proceeds on deposit with the insurer , from the
date of death of the insured to the date when the proceeds are paid.
Should the insurer hold its deposits in a noninterest bearing
account, the rate of interest to be paid shall be the same rate of
interest as the average United States Treasury Bill rate of the
preceding calendar yea r, as certified to the Insurance Commissioner
by the State Treasurer on the first regular business day in January
of each year, plus two (2) percentage points, which shall accrue
from the thirty-first day after recei pt of proof of loss until the
proceeds are paid. Payment shall be deemed to have been made on the
date an electronic payment is made or the date a check, draft or
other valid instrument which is equivalent to payment was placed in
the U.S. mails in a prop erly addressed, postpaid envelope; or, i f
not so posted, on the date of delivery of su ch instrument to the
beneficiary.
Req. No. 1885 Page 71 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
C. Subsection B of this section shall not apply to any life
insurance policy issued before October 1, 1978, which contains
specific provisions to the contrary.
SECTION 25. AMENDATORY 36 O.S. 2011, Section 4055.7, is
amended to read as follows:
Section 4055.7. A. 1. The Insurance Commissioner may conduct
an examination under the Viatical Settlements Act of 2008 of a
licensee as often as the Commission er in his or her discretion deems
appropriate after considering the factors set forth in this
paragraph. In scheduling and determining the nature, scope, and
frequency of the examinations, the Commissioner shall con sider such
matters as the consumer compl aints, results of financial statement
analyses and ratios, changes in management or ownership, actuarial
opinions, report of independent certified public accountants, and
other relevant criteria as determined by the Commissioner.
2. For purposes of comple ting an examination of a licensee
under the Viatical Settlements Act of 2008, the Commissioner may
examine or investigate any person, or the business of any person,
insofar as the examination or investigation is, in the sole
discretion of the Commissioner, necessary or material to the
examination of the licensee.
3. In lieu of an examination under the Viatical Settlements Act
of 2008 of any foreign or alien licensee licensed in this state, the
Commissioner may, at th e Commissioner’s discretion, accept an
Req. No. 1885 Page 72 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
examination report on the licensee as prepared by the Commissioner
for the licensee’s state of domicile or port -of-entry state.
4. As far as practical, the examination of a foreign or alien
licensee shall be made in cooperation with the insurance superviso ry
officials of other states in which the lice nsee transacts business.
B. 1. A person required to be licensed by the Viatical
Settlements Act of 2008 shall for five (5) years for all settled
policies and for two (2 ) years for all policies which are not
settled retain copies of all:
a. proposed, offered or executed contracts, purchase
agreements, underwriting documents, policy forms, and
applications from the date of the proposal, offer or
execution of the contract o r purchase agreement,
whichever is later,
b. all checks, drafts, electronic payment or other
evidence and documentation related to the payment,
transfer, deposit or release of funds from the date of
the transaction, and
c. all other records and documents r elated to the
requirements of the Viatic al Settlements Act of 2008.
2. This subsection does not relieve a person of the obligation
to produce these documents to the Commissioner after the retention
period has expired if the person has retained the documen ts.
Req. No. 1885 Page 73 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. Records required to be retained by this subsection must be
legible and complete and may be retained in paper, photograph,
microprocess, magnetic, mechanical, or electronic media, or by any
process that accurately reproduces or forms a durable mediu m for the
reproduction of a record.
C. 1. Upon determining that an examination should be
conducted, the Commissioner shall issue an examination warrant
appointing one or more examiners to perform the examination and
instructing them as to the scope of th e examination. In conducting
the examination, the examiner shall observe those guideli nes and
procedures set forth in the Examiners Handbook adopted by the
National Association of Insurance Commissioners (NAIC). The
Commissioner may also employ such othe r guidelines or procedures as
the Commissioner may deem appropriate.
2. Every licensee or person from whom information is sought,
its officers, directors and agents shall provide to the examiners
timely, convenient and free access at all reasonable hours at its
offices to all books, records, ac counts, papers, documents, assets
and computer or other recordings relating to the property, assets,
business and affairs of the licensee being examined. The officers,
directors, employees and agents of the licensee or person shall
facilitate the examinat ion and aid in the examination so far as it
is in their power to do so. The refusal of a licensee, by its
officers, directors, employees or agents, to submit to examination
Req. No. 1885 Page 74 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
or to comply with any reasonable written r equest of the Commissioner
shall be grounds for suspension or refusal of, or nonrenewal of any
license or authority held by the licensee to engage in the viatical
settlement business or other business subject to the Commissioner ’s
jurisdiction. Any procee dings for suspension, revocation or refu sal
of any license or authority shall be conduc ted in accordance with
the Administrative Procedures Act.
3. The Commissioner shall have the power to issue subpoenas, to
administer oaths and to examine under oath any person as to any
matter pertinent to th e examination. Upon the failure or refusal of
a person to obey a subpoena, the Commissioner may petition a court
of competent jurisdiction, and upon proper showing, the Court may
enter an order compelling the witnes s to appear and testify or
produce documentary evidence. Failure to obey the court ord er shall
be punishable as contempt of court.
4. When making an examination under the Viatical Settlements
Act of 2008, the Commissioner may retain attorneys, appraisers ,
independent actuaries, independent cer tified public accountants or
other professionals and specialists as examiners, the reasonable
cost of which shall be borne by the licensee that is the subject of
the examination.
5. Nothing contained in the Viatical Settlements Act of 2008
shall be construed to limit the Commissioner’s authority to
terminate or suspend an examination in order to pursue other legal
Req. No. 1885 Page 75 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
or regulatory action pursuant to the insurance laws of this state.
Findings of fact and conclusions mad e pursuant to any examination
shall be prima facie evidence in any legal or regulatory action.
6. Nothing contained in the Viatical Settlements Act of 2008
shall be construed to limit the Commissioner ’s authority to use and,
if appropriate, to make public any final or preliminary examination
report, any examiner or licensee workpapers or ot her documents, or
any other information discovered or developed during the course of
any examination in the furtherance of any legal or regulatory action
which the Commissioner may, in his or her sole discreti on, deem
appropriate.
D. 1. Examination repor ts shall be comprised of only facts
appearing upon the books, records or other documents of the
licensee, its agents or other persons examined, or as ascertained
from the testimony of its officers or agents or other persons
examined concerning its affairs, and such conclusions and
recommendations as the examiners find reasonably warranted from the
facts.
2. No later than sixty (60) days following completion of the
examination, the examiner in charge shall file with the Commissioner
a verified written repor t of examination under oath. Upon receipt
of the verified report, the Commissioner shall transmit the report
to the licensee examined, together with a notice that shall afford
the licensee examined a reasonab le opportunity of not more than
Req. No. 1885 Page 76 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
thirty (30) days to make a written submission or rebuttal with
respect to any matters contained in the examination report.
3. In the event the Commissioner determines that regulatory
action is appropriate as a result of an examination, the
Commissioner may initiate any proceedings or actions provided by
law.
E. 1. Names and individual identification data for all viators
shall be considered private and confidential information and sha ll
not be disclosed by the Commissioner, unless required by law.
2. Except as otherwis e provided in the Viatical Settlements Act
of 2008, all examination reports, working papers, recorded
information, documents and copies thereof produced by, obtained by
or disclosed to the Commissioner or any other person in the course
of an examination ma de under the Viatical Settlements Act of 2008,
or in the course of analysis or investigation by the Commissioner of
the financial condition or market conduct of a licens ee shall be
confidential by law and priv ileged, shall not be subject to the
Oklahoma Open Records Act, shall not be subject to subpoena, and
shall not be subject to discovery or admissible in evidence in any
private civil action. The Commissioner is autho rized to use the
documents, materials or other information in the furtherance of any
regulatory or legal action brought as part of the Commissioner ’s
official duties.
Req. No. 1885 Page 77 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. Documents, materials or other information, including, but
not limited to, all working papers, and copies thereof, in the
possession or control of the NAIC and its affiliate s and
subsidiaries shall be confidential by law and privileged, shall not
be subject to subpoena, and shall not be subject to discovery or
admissible in evidence in any private civil action if they are:
a. created, produced or obtained by or disclosed to t he
NAIC and its affiliates and subsidiaries in the course
of assisting an examination made under this act, or
assisting a Commissioner in the analysis or
investigation of the financial condition or market
conduct of a licensee, or
b. disclosed to the NAIC and its affiliates and
subsidiaries under paragraph 4 of this subsection by a
Commissioner.
For the purposes of paragraph 2 of this subsection, “act” means
the law of another state or jurisdiction that is subs tantially
similar to the Viatical Settlements A ct of 2008.
4. Neither the Commissioner nor any person that received the
documents, material or other information while acting under the
authority of the Commissioner, including the NAIC and its affiliates
and subsidiaries, shall be permitted to testify i n any private civil
action concerning any confidential documents, materials or
information subject to paragraph 1 of this subsection.
Req. No. 1885 Page 78 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
5. In order to assist in the perfo rmance of the Commissioner ’s
duties, the Commissioner:
a. may share documents, material s or other information,
including the confidential and privileged documents,
materials or information subject to paragraph 1 of
this subsection, with other state, federa l and
international regulatory agencies, with the NAIC and
its affiliates and subsidiar ies, and with state,
federal and international law enforcement authorities,
provided that the recipient agrees to maintain the
confidentiality and privileged status of t he document,
material, communication or other information, and
b. may receive documents , materials, communications or
information, including otherwise confidential and
privileged documents, materials or information, from
the NAIC and its affiliates and sub sidiaries, and from
regulatory and law e nforcement officials of other
foreign or domestic jurisdictions, and shall maintain
as confidential or privileged any document, material
or information received with notice or the
understanding that it is confidentia l or privileged
under the laws of the ju risdiction that is the source
of the document, material or information.
Req. No. 1885 Page 79 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
6. No waiver of any applicable privilege or claim of
confidentiality in the documents, materials or information shall
occur as a result of disc losure to the Commissioner under this
section or as a result of sharing as authorized i n paragraph 5 of
this subsection.
7. A privilege established under the law of any state or
jurisdiction that is substantially similar to the privilege
established under this subsection shall be available and enforced in
any proceeding in, and in any court of, this state.
8. Nothing contained in the Viatical Settlements Act of 2008
shall prevent or be construed as prohibiting the Commissioner from
disclosing the content of an examination report, preliminary
examination report or results, or any matter rela ting thereto, to
the Commissioner of any other state or country, or to law
enforcement officials of this or any other state or agency of the
federal government at any time or to the NAIC, so long as such
agency or office receiving the report or matters rel ating thereto
agrees in writing to hold it confidential and in a manner consistent
with the Viatical Settlements Act of 2008.
F. 1. An examiner may no t be appointed by the Commissioner if
the examiner, either directly or indirectly, has a conflict of
interest or is affiliated with the management of or owns a pecuniary
interest in any person subject to examination under the Viatical
Req. No. 1885 Page 80 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Settlements Act of 20 08. This section shall not be construed to
automatically preclude an examiner from being:
a. a viator,
b. an insured in a viaticated insurance policy, or
c. a beneficiary in an insurance policy that is proposed
to be viaticated.
2. Notwithstanding the re quirements of this paragraph, the
Commissioner may retain from time to time, on an individual basis,
qualified actuaries, certified public accountants, or other similar
individuals who are independently practicing their professions, even
though these persons may from time to time be similarly employed or
retained by persons subject to examination under the V iatical
Settlements Act of 2008.
G. 1. No cause of action shall arise nor shall any liability
be imposed against the Commissioner, the Commissioner ’s authorized
representatives or any examiner appointed by t he Commissioner for
any statements made or cond uct performed in good faith while
carrying out the provisions of the Viatical Settlements Act of 2008.
2. No cause of action shall arise, nor shall any liability be
imposed against any person for the act of c ommunicating or
delivering information or data to the Commissioner or the
Commissioner’s authorized representative or examiner pursuant to an
examination made under the Viatical Settlements Act of 20 08, if the
act of communication or delivery was performed in good faith and
Req. No. 1885 Page 81 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
without fraudulent intent or the intent to deceive. This paragraph
does not abrogate or modify in any way any common law or statutory
privilege or immunity heretofore enjoyed by a ny person identified in
paragraph 1 of this subsection.
3. A person identified in paragraph 1 or 2 of t his subsection
shall be entitled to an award of attorney fees and costs if he or
she is the prevailing party in a civil cause of action for libel,
slander or any other relevant tort arising out of activities i n
carrying out the provisions of this act and t he party bringing the
action was not substantially justified in doing so. For purposes of
this section a proceeding is “substantially justified ” if it had a
reasonable basis in law or fact at the time that it was initiated.
H. The Commissioner may invest igate suspected fraudulent
viatical settlement acts and persons engaged in the business of
viatical settlements.
SECTION 26. AMENDATORY 36 O.S. 2011, Section 4055.9, is
amended to read as follows:
Section 4055.9. A. 1. A viatica l settlement provider entering
into a viatical settlement contract shall first obtain:
a. if the viator is the insured, a written statement from
a licensed attending physician that the viator is of
sound mind and under no constraint or undue influence
to enter into a viatical settlement contract, and
Req. No. 1885 Page 82 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. a document in which the insured consents to the
release of his or her medical records to a licensed
viatical settlement provider, viatical settlement
broker and the insurance company that issued the life
insurance policy covering the life of the insured.
2. Within twenty (20) days after a viator executes documents
necessary to transfer any rights under an insurance policy or within
twenty (20) days of entering a ny agreement, option, promise or any
other form of understanding, expressed or implied, to viaticate the
policy, the viatical settlement provider shall give written notice
to the insurer that issued that insurance policy that the policy has
or will become a viaticated policy. The notice shall be accom panied
by the documents required by paragraph 3 of this subsection.
3. Within twenty (20) days after a viator executes documents
necessary to transfer any rights under an insurance policy or within
twenty (20) days of entering any agreement, option, promi se or any
other form of understanding, expressed or implied, to viaticate the
policy, the viatical provider shall deliver a copy of the medical
release required under subparagraph b of paragraph 1 of this
subsection, a copy of the viator ’s application for the viatical
settlement contract, the notice required under paragraph 2 of this
subsection and a request for verification of coverage to the insurer
that issued the life policy that is the subject of the viati cal
transaction. The National Association of I nsurance Commissioner ’s
Req. No. 1885 Page 83 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
(NAIC’s) form for verification of coverage shall be used unless
another form is developed and approved by the Insurance
Commissioner.
4. The insurer shall respond to a request for veri fication of
coverage submitted on an approved f orm by a viatical settlement
provider or viatical settlement broker within thirty (30) calendar
days of the date the request is received and shall indic ate whether,
based on the medical evidence and documents provided, the insurer
intends to pursue an inve stigation at this time regarding the
validity of the insurance contract or possible fraud. The insurer
shall accept a request for verification of cover age made on an NAIC
form, any form agreed upon by the ins urer and the requestor, or any
other form approved by the Commissioner. The insurer shall accept
an original or facsimile or electronic copy of such request and any
accompanying authorization signed by the viator. Failure by the
insurer to meet its oblig ations under this subsection shall be a
violation of subsection C of Section 10 and Section 15 of Enrolled
Senate Bill No. 1980 of the 2nd Session of the 51st Oklahoma
Legislature.
5. Prior to or at the time of execution of the viatical
settlement contract, the viatical settlement provider shall obtai n a
witnessed document in which the viator consents to the viatical
settlement contract, represents that the viator has a full and
complete understandin g of the viatical settlement contract, that he
Req. No. 1885 Page 84 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
or she has a full and complete understanding of the benef its of the
life insurance policy, acknowledges that he or she is entering into
the viatical settlement contract freely and voluntarily and, for
persons with a terminal or chronic illness or condition,
acknowledges that the insured has a terminal or chronic illness and
that the terminal or chronic illness or condition was diagnosed
after the life insurance policy was issued.
6. The insurer shall not unrea sonably delay effecting change of
ownership or beneficiar y with any life settlement contract entered
into in this state or with a resident of this state.
7. If a viatical settlement broker performs any of these
activities required of the viatical settleme nt provider, the
provider is deemed to have fulfilled the requirements of this
section.
B. All medical information solicited or obtained by any
licensee shall be subject to the applicable provisions of state law
relating to confidentiality of medical info rmation.
C. All viatical settlement contracts entered in to in this state
shall provide the viator with an absolute right to rescind the
contract before the earlier of thirty (30) calendar days after the
date upon which the viatical settlement contract is executed by all
parties or fifteen (15) calendar days aft er the viatical settlement
proceeds have been s ent to the viator. Rescission by the viator may
be conditioned upon the viator both giving notice and repaying to
Req. No. 1885 Page 85 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the viatical settlement provider with in the rescission period all
proceeds of the settlement a nd any premiums, loans and loan interest
paid by or on behalf of the viatical settlement provider in
connection with or as a consequence of the viatical settlement. If
the insured dies during the re scission period, the viatical
settlement contract shall b e deemed to have been rescinded, subject
to repayment to the viatical settlement provider or purchaser of all
viatical settlement proceeds, and any premiums, loans and loan
interest that have been pa id by the viatical settlement provider or
purchaser, which shall be paid within sixty (60) calendar days of
the death of the insured. In the event of any rescission, if the
viatical settlement provider has paid commissions or other
compensation to a viati cal settlement broker in connection with the
rescinded transaction, the viatical settlement broker shall refund
all such commissions and compensation to the viatical settlement
provider within five (5) business days following receipt of written
demand from the viatical settlement provider, which demand shall be
accompanied by either the viator ’s notice of rescission if rescinded
at the election of the viator, or notice of the death of the insured
if rescinded by reason of the death of the insured within the
applicable rescission period.
D. The viatical settlemen t provider shall instruct the viator
to send the executed documents required to effect the change in
ownership, assignment or change in beneficiary directly to the
Req. No. 1885 Page 86 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
independent escrow agent. Within three (3) business days after the
date the escrow agent re ceives the document or from the date the
viatical settlement provider receives the documents, if the viator
erroneously provides the documents directly to the provider, the
provider shall pay or transfer the proceeds of the viatical
settlement into an escr ow or trust account maintained in a state - or
federally-chartered financial institution whose deposits are insur ed
by the Federal Deposit Insurance Corporation (FDIC). Upon payment
of the settlement proceeds into th e escrow account, the escrow agent
shall deliver the original change in ownership, assi gnment or change
in beneficiary forms to the viatical settlement provider or related
provider trust or other designated representative of the viatical
settlement provider. Upon the escrow agent ’s receipt of the
acknowledgment of the properly completed tra nsfer of ownership,
assignment or designation of beneficiary from the insurance company,
the escrow agent shall pay the settlement proceeds to the viator.
E. Failure to tender consideration to the viator for the
viatical settlement contract within the tim e set forth in the
disclosure pursuant to paragraph 7 of subsecti on A of Section 8 of
Enrolled Senate Bill No. 1980 of the 2nd Session of the 51st
Oklahoma Legislature r enders the viatical settlement contract
voidable by the viator for lack of consideratio n until the time
consideration is tendered to and accepted by the viator. Funds
shall be deemed sent by a viatical settlement provider to a viator
Req. No. 1885 Page 87 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
as of the date that t he escrow agent either releases funds fo r wire
transfer to the viator or, places a check for delivery to the viator
via United States Postal Service or other nationally recognized
delivery service or make an electronic payment to the viator .
F. In order to assure that a viator, at the time of t he
viatical settlement has a life expectancy of less than two (2)
years, receives reasonable return for viaticat ing an insurance
policy, the following shall be minimum discounts:
Minimum Percentage of Face
Insured’s Life Value Less Outstanding Loans
Expectancy Received By Viator
Less than six (6) months 80%
At least six (6) but less than
twelve (12) months 70%
At least twelve (12) but less
than eighteen (18) months 65%
At least eighteen (18) months but
less than twenty-four (24) months 60%
G. Contacts with the insured for the purpose of determining the
health status of the insured by the viatical settlement prov ider or
viatical settlement broker after the viatical settlement has
occurred shall only be made by a vi atical settlement provider or
broker licensed in this state or its authorized represent atives and
shall be limited to once every three (3) months for in sureds with a
Req. No. 1885 Page 88 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
life expectancy of more than one (1) year, and to no more than once
per month for insureds with a life expectancy of one (1) year or
less. The provider or broker shall explain the procedure for these
contacts at the time the viatical settlem ent contract is entered
into. The limitations set forth in this subsection shall not apply
to any contacts with an insured for reasons other th an determining
the insured’s health status. Vi atical settlement providers and
viatical settlement brokers shall be responsible for the actions of
their authorized representatives.
SECTION 27. AMENDATORY 36 O.S. 2011, Section 4103, is
amended to read as follows:
Section 4103. A. No policy of group life insurance shall be
delivered in this state unless a schedule of the premium rates
pertaining to the form thereof is filed with the Insurance
Commissioner and unless it contains in s ubstance the following
provisions, or provision s which are more favorable to the persons
insured, or at least as favorable to the persons insured and more
favorable to the policyholder ,; provided, however, (a) that
provisions six (6) to ten (10) inclusive :
1. Paragraphs 6 through 10 of this section shall not apply to
policies issued to a creditor to insure debtors of such creditor;
(b) That
Req. No. 1885 Page 89 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. That the standard provisions required for individual life
insurance policies shall not apply to group life insura nce policies;
and
(c) That
3. That if the group life insurance policy is on a plan of
insurance other than the term plan, it shall contain a nonforfeiture
provision or provisions which is or are equitable to the ins ured
persons and to the policyholder, bu t nothing herein shall be
construed to require that group life insurance policies contain the
same nonforfeiture provisions as are required for individual life
insurance policies:
1. B. A provision that the policyho lder is entitled to a grace
period of thirty-one (31) days for the payment of any premi um due
except the first, during which grace period the death benefit
coverage shall continue in force, unless the policyholder shall have
given the insurer written notic e of discontinuance in advance of the
date of discontinuance and in accordance with the terms of the
policy. The policy may provide that the policyholder shall be
liable to the insurer for the payment of a pro rata premium for the
time the policy was in f orce during such grace period.
2. C. A provision that the validity of the policy shall not be
contested, except for nonpayment of premiums, after it has been in
force for two (2) years from its date of issue ;, and that no
statement made by any person insu red under the policy relating to
Req. No. 1885 Page 90 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
his or her insurability shall be used in contesting th e validity of
the insurance with respect to which such statement was made after
such insurance has been in force prior to the contest for a period
of two (2) years durin g such person’s lifetime nor unless it i s
contained in a written instrument signed by h im or her.
3. D. A provision that a copy of the application, if any, of
the policyholder shall be attached to the policy when issued, that
all statements made by the po licyholder or by the persons insured
shall be deemed representations and not warranties , and that no
statement made by any person insured shall be used in any contest
unless a copy of the instrument containing the statement is or has
been furnished to such person or to his or her beneficiary.
4. E. A provision setting forth the conditions, if any, under
which the insurer reserves the right to require a person eligible
for insurance to furnish evidence of individual insurability
satisfactory to the insurer as a condition to part or all of his or
her coverage.
5. F. A provision specifying an equitable adjustment of
premiums or of benefits or of both to be made in the event the age
of a person insured has been misstated, such provision to contain a
clear statement of the method of adjustment to be used.
6. G. A provision that any sum becoming due by reason of the
death of the person insured shall be payable to the beneficiary
designated by the person insured, subject to the provisions of the
Req. No. 1885 Page 91 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
policy in the event there is no designated beneficiary as to all or
any part of such sum, living at the death of the person insured, and
subject to any right reserved by the insurer in the policy and set
forth in the certificate to pay at its option a part of such sum not
exceeding Five Hundred Dollars ($500.00) to any person appearing to
the insurer to be equitably entitled thereto by reason of having
incurred funeral or oth er expenses incident to the last illness or
death of the person insured.
7. H. A provision that the insurer will issue to the
policyholder for delivery to each person insured an individu al
certificate setting forth a statement as to the insurance protecti on
to which he is entitled, to whom the insurance benefits are payable,
and the rights and condition s set forth in paragraphs (8), (9) and
(10) of this section:.
8. I. A provision that if the insurance, or any portion of it,
on a person covered under the policy ceases because of termination
of employment or of membership in the class or classes eligible for
coverage under the policy, such per son shall be entitled to have
issued to him or her by the insurer, without evidence of
insurability, an individual p olicy of life insurance without
disability or other supplementary benefits, provided an application
for the individual policy shall be made, and the first premium paid
to the insurer, within thirty-one (31) days after such termination,
and provided further that: (a)
Req. No. 1885 Page 92 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
a. the individual policy shall, at the option of such
person, be on any one of the forms, except term
insurance, then customarily issued by the insurer at
the age and for the a mount applied for; (b),
b. the individual policy shall be in an amoun t not in
excess of the amount of life insurance which ceases
because of such termination, less, in t he case of a
person whose membership in the class or classes
eligible for coverage term inates but who continues in
employment in another class, the amount o f any life
insurance for which such person is or becomes eligible
within thirty-one (31) days after such termination
under any other group p olicy; provided that any amount
of insurance which shall have matured on or before the
date of such termination as a n endowment payable to
the person insured, whether in one sum or in
installments or in the form of a n annuity, shall not,
for the purposes of this provision subparagraph, be
included in the amount which is considered to cease
because of such termination ;, and (c)
c. the premium on the individual policy shall be at the
insurer’s then customary rate applic able to the form
and amount of the indiv idual policy, to the class of
risk to which such person then belongs, and to his or
Req. No. 1885 Page 93 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
her age attained on the effectiv e date of the
individual policy.
9. J. A provision that if the group policy terminates or is
amended so as to terminate the insurance of an y class of insured
persons, every person insure d thereunder at the date of such
termination whose insurance terminat es and who has been so insured
for at least five (5) years prior to such termination date shall be
entitled to have issued to him or her by the insurer an individual
policy of life insura nce, subject to the same conditions and
limitations as are provided b y paragraph (8) 8 of this section,
except that the group policy may provide that the amount of such
individual policy shall not exceed the s maller of (a):
a. the amount of the person ’s life insurance protection
ceasing because of the termination or amendme nt of the
group policy, less the amount of any life insurance
for which he or she is or becomes eligible under any
group policy issued or re instated by the same or
another insurer within thirty-one (31) days after such
termination, and (b)
b. Ten Thousand Dollars ($10,000.00).
10. K. A provision that if a person insured under the group
policy dies during the period within which he or she would have been
entitled to have an individual poli cy issued to him or her in
accordance with paragraph (8) I or (9) J of this section and before
Req. No. 1885 Page 94 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
such an individual policy shall have become effective, the amount of
life insurance which he or she would have been entitled to have
issued to him or her under such individual policy shall be payable
as a claim under the group pol icy, whether or not application for
the individual policy or the payment of the first premium theref or
has been made.
11. L. In the case of a policy issued to a creditor to insure
debtors of such creditor, a provision that the insurer will furnish
to the policyholder for delivery to each debtor insured under the
policy a form which shall contain a state ment that the life of the
debtor is insured under the policy and that any death benefit paid
thereunder by reason of his or her death shall be applied to re duce
or extinguish the indebtedness.
SECTION 28. AMENDATORY 36 O.S. 2011, S ection 4112, is
amended to read as follo ws:
Section 4112. An insurer shall pay the pro ceeds of any benefits
under group life insurance policy not more than thirty (30) days
after the insurer has received proof of death of the insured. If
the proceeds are not paid within this period, the insure r shall pay
interest on the proceeds, at a rate which is not less than the
current rate of interest on death proceeds on deposit with the
insurer, from the date of death of the insured to the date when the
proceeds are paid. Payment shall be deemed to hav e been made on the
date an electronic payment i s made or a check, draft or other valid
Req. No. 1885 Page 95 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
instrument which is equivalent to payment was placed in the U.S.
mails in a properly addressed, postpaid envelope; or, if not so
posted, on the date of delivery of such instrument to the
beneficiary.
SECTION 29. AMENDATORY 36 O.S. 2011, Section 6060.12, as
amended by Section 3, Chapter 75, O.S.L. 2020 (36 O.S. Supp. 2020,
Section 6060.12), is amended to read as follows:
Section 6060.12. 1. A health benefit plan that, at the end of
its base period, experiences a greater than two percent (2%)
increase in premium costs pursuant to providing benefits for
treatment of mental health and substance use disorders sh all be
exempt from the provisions of Section 6060.11 of this title.
2. To calculate base-period-premium costs, the health benefit
plan shall subtract from premium costs incurred during the base
period, both the premium costs incurred during the period
immediately preceding the base period a nd any premium cost increases
attributable to factors unrelated to benefits for treatment of
mental health and substance use disorders.
3. a. To claim the exemption provided for in subsection A
paragraph 1 of this section a health benefit plan
shall provide to the Insurance Commissioner a written
request signed by an actuary stating the reasons and
actuarial assumptions upon which the request is based.
Req. No. 1885 Page 96 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. The Commissioner shall verify the information provided
and shall approve or disapprove the request with in
thirty (30) days of receipt.
c. If, upon investigation, the Commissioner finds that
any statement of fact in the request is found to be
knowingly false, the health benefit plan may be
subject to suspension or loss of license or any other
penalty as determined by the Commissioner, or the
State Commissioner of Health with regard to health
maintenance organizations.
SECTION 30. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6124.2 of Title 36, unless t here
is created a duplication in nu mbering, reads as follows:
A. No prepaid funeral benefit permit holder shall change the
name under which the permit holder operates except as provided in
this section. The prepaid fun eral benefit permit holder shall
obtain approval from the Insurance Com missioner at least thirty (30)
days prior to changing the name of the permit holder. The
application for change of name of a prepaid funeral benefit permit
holder shall be in a form pr ovided by the Insurance Commissioner and
shall contain, at a minimum, t he following information:
1. The name of the permit holder;
2. The proposed new name of the permit holder; and
3. The date the name change will become effective.
Req. No. 1885 Page 97 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
B. The Insurance Co mmissioner may waive the approval
requirement provided for in subsectio n A of this section upon good
cause shown.
C. The Insurance Commissioner may deny the change of name of
the prepaid funeral benefit permit holder upon good cause shown.
D. Upon approval of a change of name, the Insuranc e
Commissioner shall issue a prepai d funeral benefit permit with the
new name. The prepaid funeral benefit permit holder shall display
in a conspicuous place at all times on the premises of the
organization all permits issued pursuant to the provisions of this
section. No organization may consent to or allow the use or display
of the permit by a person other than the persons authorized to
represent the organization in contracting prepaid funeral benefits.
E. The Insurance Commissioner may prescribe rules concerning
matters incidental to t his section.
SECTION 31. AMENDATORY 36 O.S. 2011, Section 6216.1, is
amended to read as follows:
Section 6216.1. No insurance company authorized to transact
insurance in this state shall make pay ment of any insurance claim,
or any portion of a claim, to a public adjuster on account of
services rendered by a public adjuster to an insured unless the name
of the insured is added as a joint payee on any claim check or,
draft or electronic payment . The payment, whether by check, draft ,
Req. No. 1885 Page 98 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
electronic payment or otherwise, shall be sent to the address or
electronic mail address designated by the insured.
SECTION 32. AMENDATORY 36 O.S. 2011, Sectio n 6217, as
last amended by Section 1 4, Chapter 269, O.S.L. 2013 (36 O.S . Supp.
2020, Section 6217), is amended to read as follows:
Section 6217. A. All licenses issued pursuant to the
provisions of the Insurance Adjusters Licensing Act shall continue
in force not longer than twenty -four (24) months. The renewal dates
for the licenses may be staggered throughout the year by notifying
licensees in writing of the expiration and renewal date being
assigned to the licensees by the Insurance Commissioner and b y
making appropriate adjustments in the biennial licensing fee.
B. Any licensee applying for renewal of a license as an
adjuster shall have completed not less than twenty -four (24) clock
hours of continuing insurance education, of which three (3) hours
shall be in ethics, within the previou s twenty-four (24) months
prior to renewal of the license. The Insurance Commissioner shall
approve courses and providers of continuing education for insurance
adjusters as required by this section.
The Insurance Depart ment may use one or more of the foll owing to
review and provide a nonbi nding recommendation to the Insurance
Commissioner on approval or disapproval of courses and providers of
continuing education:
1. Employees of the Insurance Commissioner;
Req. No. 1885 Page 99 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2. A continuing education advisory committee . The continuing
education advisory c ommittee is separate and distinct from the
Advisory Board established by Section 6221 of this title ;
3. An independent service whose normal business activities
include the review and a pproval of continuing education cour ses and
providers. The Commissione r may negotiate agreements with such
independent service to review documents and other materials
submitted for approval of courses and providers and present the
Commissioner with its no nbinding recommendation. The Commis sioner
may require such independent service to collect the fee charged by
the independent service for reviewing materials provided for review
directly from the course providers.
C. An adjuster who, during the time perio d prior to renewal,
participates in an approved professional designatio n program shall
be deemed to have met the biennial requirement for continuing
education. Each course in the curriculum for the program shall
total a minimum of twenty -four (24) hours. Each approved
professional designat ion program included in this sectio n shall be
reviewed for quality and compliance every three (3) years in
accordance with standardized criteria promulgated by rule.
Continuation of approved status is contingent upon th e findings of
the review. The list of professional designation program s approved
under this subsection shall be made available to producers and
providers annually.
Req. No. 1885 Page 100 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
D. The Insurance Department may promulgate rules providing that
courses or programs offere d by professional associations shall
qualify for presumptive continuing education credit approval. The
rules shall include standardized criteria for reviewing the
professional associations ’ mission, membership, and other relevant
information, and shall pr ovide a procedure for the Department to
disallow a presumptively approv ed course. Professional association
courses approved in accordance with this subsection shall be
reviewed every three (3) years to determine whether they continue to
qualify for continuing education credit.
E. The active service of a licensed adjuster as a member of a
continuing education advisory committee, as described in paragraph 2
of subsection B of this section, shall be deemed to qualify for
continuing education credit on an hou r-for-hour basis.
F. 1. Each provider of continuing education shall, after
approval by the Commissioner, submit an annual fee. A fee may be
assessed for each course submission at the time it is first
submitted for review and upon submission for renewal at expiration.
Annual fees and cour se submission fees shall be set for th as a rule
by the Commissioner. The fees are payable to the Insurance
Commissioner and shall be deposited in the State Insurance
Commissioner Revolving Fund, created in Section 307.3 of this title,
for the purposes of fulfilling and accomplishing the co nditions and
purposes of the Oklahoma Producer Licensing Act and the Insurance
Req. No. 1885 Page 101 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Adjusters Licensing Act. Public -funded educational institutions,
federal agencies, nonprofit organization s, not-for-profit
organizations and Oklahoma state agencies shall be ex empt from this
subsection.
2. The Commissioner may assess a civil penalty, after notice
and opportunity for hearing, against a continuing education provider
who fails to comply with th e requirements of the Insurance Adju sters
Licensing Act, of not less th an One Hundred Dollars ($100.00) nor
more than Five Hundred Dollars ($500.00), for each occurrence. The
civil penalty may be enforced in the same manner in which civil
judgments may be enforced.
G. Subject to the right of the Commissioner to suspend, rev oke,
or refuse to renew a license of an adjuster, any such license may be
renewed by filing on the form prescribed by the Commissioner on or
before the expiration date a written request by or on behalf of the
licensee for such renewal and proof of completi on of the continuing
education requirement set forth in subsection B of this section,
accompanied by payment of the renewal fee.
H. If the request, proof of compliance with the continuing
education requirement and fee fo r renewal of a license as an
adjuster are filed with the Commissioner prior to the expiration of
the existing license, the licensee may continue to act pursuant to
said license, unless revoked or suspended prior t o the expiration
date, until the issuance o f a renewal license or until the
Req. No. 1885 Page 102 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
expiration of ten (10) days after the Commissioner has refused to
renew the license and has mailed notice of said refusal to the
licensee. Any request for renewal filed after the date of
expiration may be considered by the Commissioner as an application
for a new license.
SECTION 33. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 6470.35 of Title 36, unless
there is created a duplication in numbering, reads as follows:
A. As used in this section, “dormant captive insurance company”
means a captive insurance company that has:
1. Ceased transacting the business of insurance, including the
issuance of insurance policies; and
2. No remaining liabilities associated with i nsurance business
transactions or insurance pol icies issued prior to the filing of its
application for a certificate of dormancy under this section.
B. A dormant captive insurance company domiciled in this state
that meets the criteria of subsection A of this section may apply to
the Insurance Commiss ioner for a certificate of dormancy. The
certificate of dormancy shall be subject to renewal every five (5)
years and shall be forfeited if not renewed within such t ime.
C. A dormant captive insurance compan y that has been issued a
certificate of dormanc y shall:
Req. No. 1885 Page 103 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. Possess and thereafter maintain unimpaired, paid -in capital
and surplus of not less than Twenty -five Thousand Dollars
($25,000.00);
2. Submit on or befo re March 1 of each year to the Insurance
Commissioner a report of its financial condition, verified by an
oath of two of its executive officers, in a form prescribed by the
Insurance Commissioner; and
3. Pay a nonrefundable renewal fee of Five Hundred Dol lars
($500.00).
D. A dormant captive insur ance company shall not be subject to
or liable for the payment of any tax under Section 6753 of Title 36
of the Oklahoma Statutes.
E. A dormant captive insurance company shall apply to the
Insurance Commissioner for approval to surrender its certificate o f
dormancy and resume conducting the business o f insurance prior to
issuing any insurance policies.
F. A certificate of dormancy shall be revoked if a dormant
captive insurance company no longer meets the criteri a of subsection
A of this section.
G. A dormant captive insurance company may be subject to
examination under Section 6470.13 of Title 36 of the Oklahoma
Statutes for any year when it did not qualify as a dormant captive
insurance company. The Insurance Commissioner may examine a dormant
Req. No. 1885 Page 104 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
captive insurance company pursuant to Section 6470.13 o f Title 36 of
the Oklahoma Statutes.
H. The Insurance Commissioner may promulgate and adopt rules
and regulations implementing the provisions of this section.
SECTION 34. AMENDATORY 3 6 O.S. 2011, Section 6552, is
amended to read as follows:
Section 6552. As used in the Hospital and Medical Services
Utilization Review Act:
1. “Utilization review” means a system for prospectively,
concurrently and retrospectively reviewing the appropri ate and
efficient allocation of hospital resour ces and medical services
given or proposed to be given to a patient or group of patients. It
does not include an insurer ’s normal claim review process to
determine compliance with the specific terms and condi tions of the
insurance policy;
2. “Private review agent” means a person or entity who performs
utilization review on behalf of:
a. an employer in this state, or
b. a third party that provides or administers hospi tal
and medical benefits to citizens of thi s state,
including, but not limited to:
(1) a health maintenance organization issued a
license pursuant to Section 2501 et seq. of Title
63 of the Oklahoma Statutes, unless the health
Req. No. 1885 Page 105 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
maintenance organization is f ederally regulated
and licensed and has on file with the Insurance
Commissioner of Health a plan of utilization
review carried out by health care professionals
and providing for complaint and appellate
procedures for claims, or
(2) a health insurer, not-for-profit hospital service
or medical plan, health insurance service
organization, or prefe rred provider organization
or other entity offering health insurance
policies, contracts or benefits in this state;
3. “Utilization review plan ” means a description of util ization
review procedures;
4. “Commissioner” means the Insurance Commissioner;
5. “Certificate” means a certificate of registration granted by
the Insurance Commissioner to a private review agent; and
6. “Health care provider” means any person, firm, co rporation
or other legal entity that is licensed, certified, or otherwise
authorized by the laws of this state to provide health care
services, procedures or supplies in the ordinary course of business
or practice of a professi on.
SECTION 35. AMENDATORY 36 O.S. 2011, Section 6753, as
amended by Section 38, Chapte r 150, O.S.L. 2012 (36 O.S. Supp. 2020,
Section 6753), is amended to read as follows:
Req. No. 1885 Page 106 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Section 6753. A. Home service contracts shall not be iss ued,
sold or offered for sale in this state unless the provider h as:
1. Provided a receipt for, or other writte n evidence of, the
purchase of the home service contract to the contract holder; and
2. Provided a copy of the home service contract to the ser vice
contract holder within a reasonable period of time from the date of
purchase.
B. Each provider of home ser vice contracts sold in this state
shall file a registration with, and on a form prescribed by, the
Insurance Commissioner consisting of their na me, full corporate
physical street address, telephone number, con tact person and a
designated person in this sta te for service of process. Each
provider shall pay to the Commissioner a fee in the amount of One
Thousand Two Hundred Dollars ($1,200.00) upon initial registration
and every three (3) years thereafter. Each provider shall pay to
the Commissioner an Anti fraud Assessment Fee of Two Thousand Two
Hundred Fifty Dollars ($2,250.00) upon initial registration and
every three (3) years thereafter. The registration need only be
updated by written notification to the Commissioner if material
changes occur in the r egistration on file. A proper registration is
de facto a license to conduct business in Oklahoma and may be
suspended as provided in Section 67 55 of this title. Fees recei ved
from home service contract provi ders shall not be subject to any
premium tax, but shall be subject to an administrative fee equal to
Req. No. 1885 Page 107 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
two percent (2%) of the gross fees received on the sale of all home
service contracts issu ed in this state during the p receding calendar
quarter. The fees shall be paid quarterly to the Commissioner an d
submitted along with a report on a form prescribed by the
Commissioner. However, service contract providers may elect to pay
an annual administrative fee of Three Thousan d Dollars ($3,000.00)
in lieu of the two-percent administrative fee, if the provide r
maintains an insurance policy as provided in paragraph 3 of
subsection C of this section.
C. In order to assure the faithful performance of a provider’s
obligations to its contract holders, each provider sh all be
responsible for complying with the requi rements of paragraph 1, 2 or
3 of this subsection:
1. a. maintain a funded reserve account for its obligations
under its contracts issued and ou tstanding in this
state. The reserves shall not be less than for ty
percent (40%) of gross consideration receive d, less
claims paid, on the sale of the service contract for
all in-force contracts. The reserve account shall be
subject to examination and re view by the Commissioner,
and
b. place in trust with the Commissi oner a financial
security deposit, having a val ue of not less than five
percent (5%) of the gross consideration received, less
Req. No. 1885 Page 108 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
claims paid, on the sale of the service contract for
all service contracts issued and in forc e, but not
less than Twenty-five Thousand Dollars ($25,000.00),
consisting of one of the following:
(1) a surety bond issued by an authorized surety,
(2) securities of the type eligible for deposit by
authorized insurers in thi s state,
(3) cash,
(4) a letter of credit issued by a qualified
financial institution, or
(5)
(4) another form of security prescribed by rule
promulgated by the Commissioner;
2. a. maintain, or together with its parent company
maintain, a net worth or stockholders ’ equity of
Twenty-five Million Dollars ($25,000,000.00),
excluding goodwill, intangible assets, custome r lists
and affiliated receivables, and
b. upon request, provide the Commission er with a copy of
the provider’s or the provider’s parent company’s most
recent Form 10-K or Form 20-F filed with the
Securities and Exchange Commission (SEC) within the
last calendar year, or if the company does not file
with the SEC, a copy of the compan y’s financial
Req. No. 1885 Page 109 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
statements, which shows a net worth of the provider or
its parent company of at least Twenty-five Million
Dollars ($25,000,000.00) based upon Generally Accepted
Accounting Principles (GAAP) accounting standards. If
the provider’s parent company’s Form 10-K, Form 20-F,
or financial statements are filed to meet the
provider’s financial stability requirement, then the
parent company shall agree to guarantee the
obligations of the provider relating to service
contracts sold by the provider in thi s state; or
3. Purchase an insurance policy which demonstrates to the
satisfaction of the Ins urance Commissioner that one hundred percent
(100%) of its claim exposure is covere d by such policy. The
insurance shall be obtained from an insurer that is lice nsed,
registered, or otherwise authorized to do business in this state,
that is rated B++ or b etter by A.M. Best Company, Inc., an d that
meets the requirements of subsection D o f this section. For the
purposes of this paragraph, the insurance policy shall contain the
following provisions:
a. in the event that the provider is unable to fulfill
its obligation under contracts issued in this state
for any reason, including insolvenc y, bankruptcy, or
dissolution, the insurer shall pay losses and unearned
Req. No. 1885 Page 110 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
premiums under such plans directly to the person
making the claim under the contract,
b. the insurer issuing the insurance policy shall assume
full responsibility for the administrati on of claims
in the event of the inability of the provider to do
so, and
c. the policy shall not be canceled or not renewed by
either the insurer or the provider unless sixt y (60)
days’ written notice thereof has been given to the
Commissioner by the insur er before the date of such
cancellation or nonrenewal.
D. The insurer providin g the insurance policy used to satisfy
the financial responsibility requirements of paragraph 3 of
subsection C of this section sh all meet one of the following
standards:
1. The insurer shall, at the time the policy is filed with the
Commissioner, and con tinuously thereafter:
a. maintain surplus as to policyholders and paid -in
capital of at least Fifteen Million Dollars
($15,000,000.00), and
b. annually file copies of the audite d financial
statements of the insurer, its National Association of
Insurance Commissioners (NAIC) Annual Statement, and
Req. No. 1885 Page 111 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
the actuarial certification required by and filed in
the state of domicile of the insurer ; or
2. The insurer shall, at the time the pol icy is filed with the
Commissioner, and continuously thereafter:
a. maintain surplus as to policyholders and paid -in
capital of less than Fifteen Million Dollars
($15,000,000.00),
b. demonstrate to the satisfa ction of the Commissioner
that the company main tains a ratio of net written
premiums, wherever written, to surplus as to
policyholders and paid-in capital of not greater than
three to one, and
c. annually file copies of the audited financial
statements of the insurer, its NAIC Annual Statement,
and the actuarial certification required by and filed
in the state of domicile of the insurer.
E. Except for the registration requirements in subsection B of
this section, provide rs, administrators and other persons marketing,
selling or offering to sell home se rvice contracts are exempt from
any licensing requirements of this state and sh all not be subject to
other registration information or security requirements. Home
service contract providers as defined in Sect ion 6752 of this title
and properly registered under this law are exempt from any treatment
pursuant to the Service Warranty A ct. Home service contract
Req. No. 1885 Page 112 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
providers applying for registration under the Oklahoma Home Service
Contract Act that have not been reg istered in the preceding twelve
(12) months under the Oklahoma Home Service Contract Act may be
subject to a thirty-day prior review before their registration is
deemed complete. Said applications shall be deemed comple te after
thirty (30) days unless the Commissioner takes action in that period
under Section 6755 of this title, for cause shown, to suspend their
registration.
F. The marketing, sale, offering for sale, issuance, making,
proposing to make and administrati on of home service contracts by
providers and related service contract sellers, adm inistrators, and
other persons, including but not limited to real estate licens ees,
shall be exempt from all other provisions of the Insurance Code.
SECTION 36. AMENDATORY 36 O.S. 2011 , Section 6904, is
amended to read as follows:
Section 6904. A. 1. Upon receipt of an application for
issuance of a certificate of authority, the Insurance Commissioner
shall forthwith transmit copies of such applicat ion and accompanying
documents to the State Commissioner of Health.
2. The State Commissioner of Health shall within forty-five
(45) days determine whether the applicant for a certificate of
authority, with respect to health care services to be furnished, has
complied with the provisions of Section 7 6907 of this act title.
Req. No. 1885 Page 113 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
3. Within forty-five (45) days of receipt of an application for
issuance of a certificate of authority from the Insurance
Commissioner, the State Commissioner of Health shall certify t o the
Insurance Commissioner that th e proposed health maintenance
organization meets the requirements of Section 7 of this act, or
shall notify the Insurance Commissioner that the proposed health
maintenance organization does not meet such requirements and shall
specify in what respects the applicant is deficient.
B. The Insurance Commi ssioner shall, within forty-five (45)
days of receipt of a certification of determining compliance or
notice of deficiency from the State Commissioner of Health , issue a
certificate of authority to a person fi ling a completed application
upon receipt of the prescribed fees and upon the Insurance
Commissioner’s being satisfied that:
1. The persons responsible for the conduct of the affairs of
the applicant are competent and t rustworthy, and possess good
reputations;
2. Any deficiency identified by the State Commissioner of
Health has been corrected and the State Commissioner of Health has
certified to the Insurance Commissioner has determined that the
health maintenance organ ization’s proposed plan of operation meets
the requirements of Section 7 6907 of this act title;
3. The health maintenance organization will effectively provide
or arrange for the provision of basic health care services on a
Req. No. 1885 Page 114 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
prepaid basis, through insuran ce or otherwise, except to the exten t
of reasonable requirements for copayments or deductibles, or both;
and
4. The health maintenance organization is in compliance with
the provisions of Sections 13 6913 and 15 6915 of this act title.
C. A certificate of authority shall be denied only after the
Insurance Commissioner complies with the requirements of Section 20
6920 of this act title. No other criteria may be used to deny a
certificate of authority.
SECTION 37. AMENDATORY 36 O.S . 2011, Section 6907, is
amended to read as follows:
Section 6907. A. Every healt h maintenance organization shall
establish procedures that ensure that health care services provided
to enrollees shall be rendered under reasonable standards of quality
of care consistent with prevail ing professionally recognized
standards of medical prac tice. The procedures shall include
mechanisms to assure availability, accessibility and continuity of
care.
B. The health maintenance organization shall have an ongoing
internal quality assurance pro gram to monitor and evaluate its
health care services, including primary and specialist physician
services and ancillary and preventive health care services across
all institutional and noninstitutional settings. The program sh all
include, but need not be limited to, the following:
Req. No. 1885 Page 115 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. A written statement of goals and objectives that emphasizes
improved health status in evaluating the quality of care rendered to
enrollees;
2. A written quality assurance plan that describes the
following:
a. the health maintenance organization’s scope and
purpose in quality as surance,
b. the organizational structure responsible for quality
assurance activities,
c. contractual arrangements, where appropriate, for
delegation of quality assurance ac tivities,
d. confidentiality policies and procedures,
e. a system of ongoing evalua tion activities,
f. a system of focused evaluation activities,
g. a system for credentialing and recredentialing
providers, and performing peer review activities, and
h. duties and responsibilities of the designated
physician responsible for the quality as surance
activities;
3. A written statement describing the system of ongoing quality
assurance activities including:
a. problem assessment, identification, selection and
study,
Req. No. 1885 Page 116 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
b. corrective action, mo nitoring, evaluation and
reassessment, and
c. interpretation and analysis of patterns of care
rendered to individual patients by individual
providers;
4. A written statement describing the system of focused quality
assurance activities based on representa tive samples of the enrolled
population that identifies method of topic selection, study, data
collection, analysis, interpretation and report format; and
5. Written plans for taking appropriate corrective action
whenever, as determined by the quality assurance p rogram,
inappropriate or substandard services h ave been provided or services
that should have been furnished have not been provided.
C. The organization shall record proceedings of formal quality
assurance program activ ities and maintain documentation in a
confidential manner. Quality assurance progr am minutes shall be
available to the State Insurance Commissioner of Health.
D. The organization shall ensure the use and maintenance of an
adequate patient record system w hich will facilitate documentation
and retrieval of clinical information for the pu rpose of the health
maintenance organization ’s evaluating continuity and coordination of
patient care and assessing the quality of health and medical care
provided to enrollees.
Req. No. 1885 Page 117 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
E. Enrollee clinical records s hall be available to the State
Insurance Commissioner of Health or an authorized designee for
examination and review to ascertain compliance with this section, or
as deemed necessary by th e State Insurance Commissioner of Health.
F. The organization shall establish a mechanism for periodic
reporting of quality assurance program activities to the governing
body, providers and appropriate organization staff.
G. The organization shall be req uired to establish a mechanism
under which physicians participating in the plan may provide input
into the plan’s medical policy including, but not limited to,
coverage of new technology and procedures, utilization review
criteria and procedures, quality, credentialing and recredentialin g
criteria, and medical management p rocedures.
H. As used in this section “credentialing” or
“recredentialing”, as applied to physicians and other health care
providers, means the process of accessing and validating the
qualifications of such persons to p rovide health care services to
the beneficiaries of a health maintenance organizati on.
“Credentialing” or “recredentialing” may include, but need not be
limited to, an evaluation of licensure status, education, training,
experience, competence and profess ional judgment. Credentialing or
recredentialing is a prerequisite to the final de cision of a health
maintenance organization to permit initial or continued
participation by a physician or other health care provider.
Req. No. 1885 Page 118 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. Physician credentialing and recred entialing shall be based
on criteria as provided in the uniform credentialing appli cation
required by Section 1 -106.2 of Title 63 of the Oklahoma Statutes,
with input from physicians and other health care providers.
2. Organizations shall make information on credentialing and
recredentialing criteria available to physician applicants an d other
health care providers, participating physicians, and other
participating health care providers and shall provide applicants
with a checklist of materials required in the application process.
3. When economic considerations are part of the credenti aling
and recredentialing decision, objective criteria shall be used and
shall be available to physician applicants and participating
physicians. When graduate medical educ ation is a consideration in
the credentialing and recredentialing process, equal re cognition
shall be given to training programs accredited by the Accrediting
Council on Graduate Medical Education and by the American
Osteopathic Association. When graduate medical education is
considered for optometric physicians, consideration shall be given
for educational accreditation by the Council on Optometric
Education.
4. Physicians or other health care providers under
consideration to provide health care services under a managed care
plan in this state shall apply for credentialing and recreden tialing
on the uniform credentialing application and provide the
Req. No. 1885 Page 119 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
documentation as outlined by the plan ’s checklist of materials
required in the application process.
5. A health maintenance organization (HMO) shall determine
whether a credentialing or recr edentialing application is complete.
If an application is determined to be incomplete, the plan shall
notify the applicant in writing within ten (10) calendar days of
receipt of the application. The written notice shall specify the
portion of the applica tion that is causing a delay in processing and
explain any additional information or corrections needed.
6. In reviewing the application, th e health maintenance
organization (HMO) shall evaluate each applicat ion according to the
plan’s checklist of materi als required in the application process.
7. When an application is deemed complete, the HMO shall
initiate requests for primary source verif ication and malpractice
history within seven (7) calendar days.
8. A malpractice carrier shall have twenty -one (21) calendar
days within which to respond after receipt of an inquiry from a
health maintenance organization (HMO). Any malpractice carrier th at
fails to respond to an inquir y within the allotted time frame may be
assessed an administrative penalty by the State Insurance
Commissioner of Health.
9. Upon receipt of primary source verification and malpractice
history by the HMO, the HMO shall dete rmine if the application is a
clean application. If the application is deemed clean, the HMO
Req. No. 1885 Page 120 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
shall have forty-five (45) calendar days within which to credential
or recredential a physician or other health care provider. As used
in this paragraph, “clean application” means an application that has
no defect, misstatement o f facts, improprieties, including a lack of
any required substantiating documentation, or particular
circumstance requiring special treatment that impedes prompt
credentialing or recredent ialing.
10. If a health mainten ance organization is unable to
credential or recredential a physician or other heal th care provider
due to an application ’s not being clean, the HMO may extend the
credentialing or recredentialing process for sixty (60) cale ndar
days. At the end of sixty (60) calendar days, if the HMO is
awaiting documentation to complete the applicatio n, the physician or
other health care provider shall be notified of the delay by
certified mail. The physician or other health care provider may
extend the sixty-day period upon written notice to the HMO with in
ten (10) calendar days; otherwise the applic ation shall be deemed
withdrawn.
11. In no event shall the entire credentialing or
recredentialing process exceed one hundred eighty (180) c alendar
days.
12. A health maintenance organization shall be prohib ited from
solely basing a denial of an applicat ion for credentialing or
recredentialing on the lack of board certification or board
Req. No. 1885 Page 121 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
eligibility and from adding new requirements solely for the purpose
of delaying an appli cation.
13. Any HMO that violates t he provisions of this subsection may
be assessed an administrative penalty by the State Insurance
Commissioner of Health.
I. Health maintenance organizations shall not discriminate
against enrollees with expensive medic al conditions by excluding
practitioners with practices containing a substantial nu mber of
these patients.
J. Health maintenance organizations shall, upon request,
provide to a physician whose contract is terminated or not renewed
for cause the reasons fo r termination or nonrenewal. Health
maintenance organizations shall not contractua lly prohibit such
requests.
K. No HMO shall engage in the practice of medicine or any other
profession except as provided by law nor shall a n HMO include any
provision in a provider contract that precludes or discourages a
health maintenance organization ’s providers from:
1. Informing a patient of the care the patient requires,
including treatments or services not provided or reimbursed under
the patient’s HMO; or
2. Advocating on behalf of a patient before the HMO.
L. Decisions by a health maintenance organization to authorize
or deny coverage for an emergency service shall be based on the
Req. No. 1885 Page 122 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
patient presenting symptoms arising from any injury , illness, or
condition manifesting itself by acute symptoms of suff icient
severity, including severe pain, such th at a reasonable and prudent
layperson could expect the absence of medical attention to result in
serious:
1. Jeopardy to the health of the p atient;
2. Impairment of bodily function; or
3. Dysfunction of any bodily organ or part.
M. Health maintenance o rganizations shall not deny an otherwise
covered emergency service based solely upon lack of notification to
the HMO.
N. Health maintenance organizations shall compensate a provider
for patient screening, eva luation, and examination services that are
reasonably calculated to assist the provider in determining whether
the condition of the patient requires emergency service. If the
provider determines that the patient does no t require emergency
service, coverage for services rendered subsequent to that
determination shall be governed by the HMO contract.
O. If within a period of thirty (30) minutes after receiving a
request from a hospital emergency department for a specialty
consultation, a health maintenance organization fails to identify an
appropriate specialist who is available and willing to assume the
care of the enrollee, the emergency department may arrange for
emergency services by an appropriate specialist that are medically
Req. No. 1885 Page 123 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
necessary to attain stabil ization of an emergency medical condition,
and the HMO shall not deny coverage for the services due to lack of
prior authorization.
P. The reimbursement policies and patient transfer requirements
of a health maintenance organization shall not, directly or
indirectly, require a hospital emergency depar tment or provider to
violate the federal Emergency Medical Treatment and Active Labor
Act. If a member of an HMO is transferred from a hospital emergency
department facility to another medical facility, the H MO shall
reimburse the transferring facility an d provider for services
provided to attain stabilization of the emergency medical condition
of the member in accordance with the federal Emergency Medical
Treatment and Active Labor Act.
SECTION 38. AMENDATORY 36 O.S. 2011, Section 6911, is
amended to read as follows:
Section 6911. A. Every health maintenance organization shall
establish and maintain a grievance procedure that has been approved
by the Insurance Commissioner , after consultation with the State
Commissioner of Health , to provide for the resolution of grievances
initiated by enrollees. Such grievance procedure shall be approved
by the Insurance Commissioner within thirty (30) days of su bmission.
The health maintenance or ganization shall maintain a record of
grievances received since the date of its last examination of
grievances.
Req. No. 1885 Page 124 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
B. The Insurance Commissioner or the State Commissioner of
Health may examine the grievance procedures.
C. Health maintenance organizations sh all comply with the
requirements of an insurer as set out in Sections 1250.1 through
1250.16 of Title 36 of the Oklahoma Statutes this title.
SECTION 39. AMENDATORY 36 O.S. 2011, Section 6919, is
amended to read as follows:
Section 6919. A. The Insurance Commissioner may make an
examination of the affairs of any health maintenance organization,
producers and providers with whom the organization has contracts,
agreements or other arrangements pur suant to the provisions of
Sections 309.1 through 309.7 of Title 36 of the Oklahoma Statutes
this title.
B. The State Insurance Commissioner of Health may require a
health maintenance organization to contract for an examination
concerning the quality assu rance program of the health maintena nce
organization and of any providers with whom the organization has
contracts, agreements or other arrangements as often as is
reasonably necessary for the protection of the interests of the
people of this state, but no t less frequently than once every th ree
(3) years.
C. Every health maintenance org anization and provider shall
submit its books and records for examination and in every way
facilitate the completion of an examination. For the purpose of an
Req. No. 1885 Page 125 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
examination, the Insurance Commissioner and the State Commissioner
of Health may administer oaths to, and examine the officers and
agents of the health maintenance organization and the principals of
the providers concerning their business.
D. Any health maintenance org anization examined shall pay the
proper charges incurred in such examination, inclu ding the actual
expense of the Insurance Commissioner or State Commissioner of
Health or the expenses and compensation of any authorized
representative and the expense and c ompensation of assistants and
examiners employed therein. All expenses incurred in such
examination shall be verified by affidavit and a copy shall be filed
in the office of the Insurance Commissioner or the State
Commissioner of Health .
E. In lieu of an examination, the Insurance Commissi oner or
State Commissioner of Health may accept the report of an examination
made by the health maintenance organization regulatory entity of
another state.
SECTION 40. AMENDATORY 36 O.S. 2011, S ection 6920, is
amended to read as f ollows:
Section 6920. A. A certificate of aut hority issued under the
Health Maintenance Organization Act of 2003 may be suspended or
revoked, and an application for a certificate of authority may be
denied, if the Insurance Commissioner finds that any of the
following conditions exist:
Req. No. 1885 Page 126 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
1. The health maintenance organization (HMO) is operating
significantly in contravention of its basic organizational document
or in a manner contrary to that described in any other infor mation
submitted under Section 3 6903 of this act title, unless amendments
to those submissions have been filed with and approved by the
Insurance Commissioner;
2. The health maintenance organization issues an evidence of
coverage or uses a schedule of ch arges for health care services that
does not comply with the req uirements of Sections 8 6908 and 16 6916
of this act title;
3. The health maintenance organization does not provide or
arrange for basic health care services;
4. The State Commissioner of He alth certifies to the Insurance
Commissioner determines that:
a. the health maintenance organization does not meet the
requirements of Section 7 6907 of this act title, or
b. the health maintenance organization is unable to
fulfill its obligations to furni sh health care
services;
5. The health maintenance organization is no longer financially
responsible and may reasonably be expected to be unable to meet its
obligations to enrollees or prospective enrollees;
6. The health maintenance organization has fai led to correct,
within the time fram e prescribed by subsection C of this section,
Req. No. 1885 Page 127 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
any deficiency occurring due to the health maintenance
organization’s prescribed minimum net worth being impaired;
7. The health maintenance organization has failed to imple ment
the grievance procedures requir ed by Section 11 6911 of this act
title in a reasonable manner to resolve valid complaints;
8. The health maintenance organization, or any person on its
behalf, has advertised or merchandised its services in an untrue,
misrepresentative, misleading, decep tive or unfair manner;
9. The continued operat ion of the health maintenance
organization would be hazardous to its enrollees or to the publ ic;
or
10. The health maintenance organization has otherwise failed to
comply with the provisions of the Health Mai ntenance Organization
Act of 2003, or applicable rules promulgated by the Insurance
Commissioner pursuant thereto , or rules promulgated by t he State
Board of Health pursuant to the provisions of Section 7 of the
Health Maintenance Organization Act of 2003 .
B. In addition to or in lieu of suspension or revocation of a
certificate of authority pursuant to the provisions of this section,
an applicant or health maintenance organization who knowingly
violates the provisions o f this section may be subject to an
administrative penalty of Five Thousand Dollars ($5,000.00) for each
occurrence.
Req. No. 1885 Page 128 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
C. The following shall apply when insufficient net worth i s
maintained:
1. Whenever the Insurance Commissioner finds that the net worth
maintained by any health maintenance organization subject to the
provisions of this act is less than the minimum net worth required
to be maintained by Section 13 6913 of this act title, the Insurance
Commissioner shall give written notice to the health mai ntenance
organization of the amount of the deficiency and require filing with
the Insurance Commissioner a plan for correction of the deficiency
that is acceptable to the Insur ance Commissioner, and correction of
the deficiency within a reasonable time, no t to exceed sixty (60)
days, unless an extension of time, not to exceed sixty (60)
additional days, is granted by the Insurance Commissioner. A
deficiency shall be deemed an i mpairment, and failure to correct the
impairment in the prescribed time shall be grounds for suspension or
revocation of the certificate of authority or for placin g the health
maintenance organization in conservation, rehabilitation or
liquidation; or
2. Unless allowed by the Insurance Commissioner, no health
maintenance organization or person acting on its behalf may,
directly or indirectly, renew, issue or delive r any certificate,
agreement or contract of coverage in this state, for which a premium
is charged or collected, when the health maintenance organization
writing the coverage is impaired, and the fact of impai rment is
Req. No. 1885 Page 129 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
known to the health maintenance organi zation or to the person;
provided, however, the existence of an impairment shall not prevent
the issuance or renewal of a certificate, agreement or contract when
the enrollee exercises an option granted under the plan to obtain a
new, renewed or converted coverage.
D. A certificate of authority shall be suspended or revoked or
an application or a certificate of authority denied or an
administrative penalty imposed only after compliance with the
requirements of this section.
1. Suspension or revocation of a certificate of authority,
denial of an application, or imposition of an administrative pena lty
by the Insurance Commissioner, pursuant to the provisions of this
section, shall be by written order and shall b e sent to the health
maintenance organization o r applicant by certified or registered
mail and to the State Commissioner of Health . The written order
shall state the grounds, charges or conduct on which the suspension,
revocation or denial or administrati ve penalty is based. The health
maintenance organization or applicant may, in writing, request a
hearing within thirty (30) days from the d ate of mailing of the
order. If no written request is made, the order shall be final upon
the expiration of thirty (30) days.
2. If the health maintenance organi zation or applicant requests
a hearing pursuant to the provisions of this section, the Insura nce
Commissioner shall issue a written notice of hearing and send such
Req. No. 1885 Page 130 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
notice to the health maintenance organization or applicant by
certified or registered mail and to the State Commissioner of Health
stating:
a. a specific time for the hearing, which may not be less
than twenty (20) nor more than thirty (30) days after
mailing of the notice of hearing, and
b. that any hearing shall be held at the office of the
Insurance Commissioner.
If a hearing is requested, the State Commissioner of Health or a
designee shall be in attendance and shall participate in the
proceedings. The recommen dations and findings of the State
Commissioner of Health with respect to matters re lating to the
quality of health care services provided in connection with any
decision regarding denial, suspension or revocation of a certificate
of authority, shall be con clusive and binding upon the Insuran ce
Commissioner. After the hearing, or upon fa ilure of the health
maintenance organization to appear at the hearing, the Insurance
Commissioner shall take whatever action is deemed necessary based on
written findings. The Insurance Commissioner shall mai l the
decision to the health maintenance organi zation or applicant and a
copy to the State Commissioner of Health .
E. The provisions of the Administrative Procedures Act shall
apply to proceedings under this section to the extent they are not
Req. No. 1885 Page 131 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
in conflict with the provisions of Section 313 of Title 36 of the
Oklahoma Statutes this title.
F. If the certificate of authority of a health maintena nce
organization is suspended, the health maintenance organization shall
not, during the period of suspension, enrol l any additional
enrollees except newborn child ren or other newly acquired dependents
of existing enrollees, and shall not engage in any adv ertising or
solicitation whatsoever.
G. If the certificate of authority of a he alth maintenance
organization is revoked, the HMO shall proceed, immediately
following the effective date of the order of revocation, to wind up
its affairs and shall conduct n o further business except as may be
essential to the orderly conclusion of the a ffairs of the
organization. The HMO shall engage in no further advertising or
solicitation whatsoever. The Insurance Commissioner may, by written
order, permit further operat ion of the HMO if found to be in the
best interests of enrollees, to the end tha t enrollees will be
afforded the greatest practical opportunity to obtain continuin g
health care coverage.
SECTION 41. AMENDATORY 36 O.S. 2011, Section 6929, is
amended to read as follows:
Section 6929. The State Insurance Commissioner of Health, in
carrying out his or her obligations under the Health Maintenanc e
Organization Act of 2003, may contract with qualified persons to
Req. No. 1885 Page 132 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
make recommendations conce rning the determinations required to be
made by the State Insurance Commissioner of Health. The
recommendations may be accepted in full or in part by the State
Insurance Commissioner of Health. The State Insurance Commissioner
of Health shall adopt procedures to ensure that such persons are not
subject to a conflict of interest that would impair their ability to
make recommendations in an impartial manner.
SECTION 42. REPEALER 36 O.S. 2011, Sections 1435.40, as
amended by Section 1, Chapter 23, O.S.L. 2016 (36 O.S. Supp. 2020,
Section 1435.40), 1612.1, 6221 and 6522, are hereby repealed.
SECTION 43. This act shall become effe ctive November 1, 2021.
58-1-1885 CB 2/22/2021 11:56:51 AM