January 18, 2022

Volume XII, Number 18

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January 15, 2022

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Third Party Administrator Licensing and Compliance Services: Recent Regulatory Actions Against TPAs

NEW JERSEY

The New Jersey Department of Banking and Insurance (“New Jersey Department”) recently took regulatory action against a TPA for untimely filing its annual report with the New Jersey Department.

N.J.S.A. 17B:27B-13 requires licensed TPAs in New Jersey to file an annual report to the New Jersey Department for the preceding calendar year. Pursuant to N.J.A.C. 11:23-3.8, TPAs must file by June 1st of each year an annual report for the preceding calendar year that includes an audited financial statement and unaudited information containing the complete names and addresses of all benefit payers with which the TPA had a contract in effect during the preceding calendar year.

According to the New Jersey Department, the TPA did not file its audited financial statement which was due on June 1, 2019 until October 11, 2019. The order states that the New Jersey Department repeatedly reached out to the TPA and advised that the annual report was late and asked when the report would be filed. Additionally, at one point, the TPA had allegedly indicated that the only financial information that it had in house was the compilation statement that it had initially filed with the New Jersey Department.

The TPA entered into a Consent Order with the New Jersey Department and agreed to pay a $13,200 monetary penalty pursuant to N.J.S.A. 17B:27B-24 for the violation of N.J.S.A. 17B-27B-13 and N.J.A.C. 11:23-3.8.

SOUTH DAKOTA

The South Dakota Division of Insurance (“South Dakota Division”) recently took regulatory action against a company operating in South Dakota without being properly registered as a TPA.

According to the South Dakota Division, the TPA held a valid registration in South Dakota which expired on July 1, 2013. Notwithstanding the expiration of its registration, the TPA continued to operate in South Dakota without being properly registered in violation of SDCL § 58-29D-21 and didn’t file a new TPA registration application with the South Dakota Division until February 2020.

As a result of the above information, the TPA entered into a Consent Order with the South Dakota Division and agreed to pay a monetary penalty of $10,000. The South Dakota Division also agreed to allow the TPA to become registered. 

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 280
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About this Author

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

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...

913.234.7469
Jennifer Osborn Insurance Lawyer Polsinelli Law Firm
Shareholder

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.

913.234.7472
Shareholder

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.

...
913-234-7427
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