June 3, 2020

June 03, 2020

Subscribe to Latest Legal News and Analysis

June 02, 2020

Subscribe to Latest Legal News and Analysis

June 01, 2020

Subscribe to Latest Legal News and Analysis

Recent Insurance Regulatory Actions Against Third Party Administrators

Recently, two state insurance departments took action against third party administrators in their respective states based on their failure to be properly licensed. These regulatory actions demonstrate the importance for TPAs to be properly licensed, as well as for insurance companies to confirm that the TPAS they are contracted with are duly licensed.

The details of the actions are summarized below.

South Dakota Regulatory Actions

Recently, the South Dakota Division of Insurance took regulatory actions against two companies operating in South Dakota based on their failure to be properly licensed as a Third Party Administrator (TPA).

According to the Division, the first company was a licensed TPA in South Dakota but allowed its TPA license to lapse due to its failure to renew its license. Notwithstanding the lapse of its license, the company continued to conduct insurance business in South Dakota without a TPA license in violation of SDCL § 58-29D-21 and 58-29E2.

As a result, the company entered into a Consent Order with the Division and agreed to pay a $25,000 monetary penalty.

According to the Division, the second company acted as a TPA in South Dakota without being licensed in violation of SDCL § 58-29D-21. Additionally, the second company had also failed to disclose to the Division an administrative action taken against it in another state.

As a result, the second company entered into a Consent Order with the Division in which it agreed to pay a $20,000 monetary penalty in lieu of an application denial.

Tennessee Regulatory Action

Recently, the Tennessee Insurance Department took action against a licensed TPA based on the fact that its certification as a utilization review agent had expired. Specifically, the TPA's utilization review certification remained inactive for two months in Tennessee, during which time it completed approximately 135 utilization reviews. As a result, the TPA entered into a Consent Order with the Tennessee Insurance Department that ordered:

  • The TPA to pay a civil penalty of $10,000 for utilization review violations.

  • All persons to cease and desist from all activities that in any way assist, aid, or help the TPA in violation of Tennessee law.

© Polsinelli PC, Polsinelli LLP in California


About this Author

Steven L. Imber, Polsinelli PC, Insurance Regulatory Attorney, Enforcement Actions Lawyer,

Steve Imber chairs Polsinelli's Insurance Business and Regulatory group.  As a former General Counsel at a state insurance department, Steve Imber has the knowledge and experience to provide quality counsel to insurers, third party administrators, insurance agencies, medical discount plans and other insurance regulated entities. His practice includes representing and assisting clients on multi-state and national licensing projects, research projects, enforcement actions, market conduct examinations, audits and compliance programs and various other regulatory and...


Justin Liby has a talent for organizing and managing large national and multi-state licensure and research projects. This knack provides him with a solid foundation for crafting and implementing sound, efficient strategies that achieve success for his clients. Justin concentrates his efforts on helping the insurance industry navigate the formidable federal and state regulatory maze to achieve the industry’s business needs. He stays current in the insurance industry's evolution, as well as the legislation and regulatory activity impacting the industry.

Justin is a former regulator for the Kansas Insurance Department and in-house counsel for a national third-party administrator.


Jennifer Osborn Nix works diligently for insurance companies, third-party administrators, and other regulated entities to further their goals and help them remain compliant within the 50-state regulatory scheme. She focuses on insurance regulatory and compliance issues, with a primary emphasis on life and health insurance matters.

Jennifer works with many regulated entities, including many in the health care sector, who rely on her for research, advice, strategic counsel, and licensing.