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STATE OF OKLAHOMA
1st Session of the 59th Legislature (2023)
SENATE BILL 553 By: Montgomery
AS INTRODUCED
An Act relating to the Third-party Administrator Act;
amending 36 O.S. 2021, Section 1450, which relates to
licensure; removing requi rement for certain applica nt
to submit certain documentation; requiring certain
applications and fees to be submitted and paid
electronically; requiring renewal fee prior to
reinstatement of certain license; providing renewal
procedure for certain expired license; requiring
certain report from expired licensees; conforming
language; requiring certain updates to administrato r
information by certain date; requiring certain
administrator respon d to certain inquiries by certain
date; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 1450, is
amended to read as follows:
Section 1450. A. No person shall act as or present himself or
herself to be an administrator, as defined by the prov isions 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.
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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 license 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 ad ministrator’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 administrator from receiving a
nonresident administrator license in this state.
1. “Home state” means the United States jurisdiction that has
adopted the Third-party Administrator Act or a substantially similar
law governing third-party administrators and which has been
designated by the administrator as its principal regulator. The
administrator may designate either its state of incorporation or its
principal place of business within the United States if that
jurisdiction has adopted the T hird-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 substantially similar law governing
third-party administrators, then the third-party administrator shall
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designate a United States jurisdiction in which it does business an d
which has adopted the Third-party Administrator Act or a
substantially similar law governing third-party administrators. For
purposes of this paragraph, “United States jurisdiction” means the
District of Columbia or a state or territory of th e 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 partners hip which has been licensed, each
general partner shall be licensed and shall qualify therefore as
though an individual licensee. The C ommissioner shall charge a full
additional license fee and a separate license shall be issued for
each individual so named in such a the license. The partnership
shall notify the Commissioner within thirty (30) days if any
individual licensed on its behalf has been ter minated, or is no
longer associated with or employed by the partnership. Any person
making application as an administrator or currently licensed as an
administrator under the Third-party Administrators Act shall provide
a National Association of Insurance Commissioner (NAIC) Biographical
Affidavit and a comprehensive review of the backgrou nd report by an
independent third-party NAIC-approved vendor as required for
domestic insurers purs uant to the insurance laws o f this state.
D. An application for an administrator’s license shall be in a
form prescribed by the Commissioner and shall be ac companied by a
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fee of One Hundred Dollars ($100.00) . The application shall be
filed and the fee shall be paid electronically in a form and manner
prescribed by the Commissioner . This fee shall not be refundable if
the application is denied or refused for any reason by either the
applicant or the Commissioner.
E. The administrator’s license shall continue in force no
longer than twelve (12) months from the original month of issuance.
Upon filing a renewal form prescri bed 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 renewal shall be filed, and the fee shall
be paid electronical ly in a form and manner prescribed by the
Commissioner. A license that expires for failure to submit a
renewal application may be reinstated within ninety (90) days after
the expiration date by electronically submitting a fee in an amount
of Two Hundred Dollars ($200.00) in a form and manner prescribed by
the Commissioner and any other transaction or fees deemed necessary
by the Commissioner. All applications received more than ninety
(90) days following the expiration of a license shall include a
detailed report of administrator s ervices provided in this state
during the period of expired licensure. The administrator shall
submit, together with the application for renewal, a list of the
names and addresses of the persons with whom the administrator has
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contracted in accordance with Section 1443 of this title. The
Commissioner shall hold this information confide ntial 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 financi ally responsible, or has had any
insurance license denied for cause by any state, has been convicted
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 jurisdiction or by another governmental
agency in this state within thirty (30) calendar days of the final
disposition of the matter. This report s hall 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
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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 violated 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
denied, the Commissioner may either suspend or revoke an
administrator’s license or assess a civil penalty 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 T en 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 guilty of a misdemeanor and
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shall be subject to a fine of not more than One Thousand Dollars
($1,000.00).
J. Each administrator shall electronically submit, in a form
and manner prescribed by the Commissioner, any change of legal
business name, doing business as or ass umed name, address, service
agent contact information, or contact email address, and any
necessary fees within thirty (30) days after the change occurred.
Any submission of a change under this s ubsection that is received
more than thirty (30) days after t he change occurred shall be
accompanied by a fee of Fi fty Dollars ($50.00).
K. Upon receipt of any inqui ry from the Insurance Commissio ner,
a licensed administrator shall furnish the Commis sioner with an
adequate response to the inquiry within twenty (20) days from
receipt of the inquiry.
SECTION 2. This act shall become effective November 1, 2023.
59-1-401 RD 1/17/2023 5:36:18 PM