Senate Bill No. 534
(Senators Minard, Jenkins, Sharpe, Minear and Ross, original sponsors)
[Passed March 8, 2003; in effect ninety days from passage.]
AN ACT to amend chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article forty-six, relating
to third-party administrators; requiring licensing of
third-party administrators; requiring all third-party
administrators to obtain certificates of authority; defining
terms; disposition of premiums and claim payments received by
the administrator; requiring administrator to maintain certain
information; requiring advertising be approved; setting forth
responsibilities of the insurer; providing for the collection
of premiums and payment of claims; administrator compensation;
notices and disclosures; nonresident and home state
certificate of authority; denial, suspension or revocation of
certificate of authority; authority to propose rules;
requiring third-party administrators to have written contracts with their insurers; and requiring third-party administrators
to provide the commission with certain disclosures.
Be it enacted by the Legislature of West Virginia:
That chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by adding
thereto a new article, designated article forty-six, to read as
ARTICLE 46. THIRD-PARTY ADMINISTRATOR ACT.
§33-46-1. Short title.
This article may be cited as the "Third-Party Administrator
(a) "Administrator" or "third-party administrator" means a
person who directly or indirectly underwrites or collects charges
or premiums from, or adjusts or settles claims on residents of this
state, in connection with life, annuity or accident and sickness
coverage offered or provided by an insurer, except any of the
(1) An employer, or a wholly owned direct or indirect
subsidiary of an employer, on behalf of its employees or the
employees of one or more subsidiaries or affiliated corporations of
(2) A union on behalf of its members;
(3) An insurer that is licensed to transact insurance in this state with respect to a policy lawfully issued and delivered in and
pursuant to the laws of this state or another state including:
(A) A health service corporation licensed under article
twenty-four of this chapter;
(B)A health care corporation licensed under article twenty-
five of this chapter;
(C) A health maintenance organization licensed under article
twenty-five-a of this chapter; and
(D) A prepaid limited health service organization licensed
under article twenty-five-d of this chapter.
(4) An insurance producer licensed to sell life, annuities or
health coverage in this state whose activities are limited
exclusively to the sale of insurance;
(5) A creditor on behalf of its debtors with respect to
insurance covering a debt between the creditor and its debtors;
(6) A trust and its trustees, agents and employees acting
pursuant to the trust established in conformity with 29 U. S. C.
(7) A trust exempt from taxation under Section 501(a) of the
Internal Revenue Code, its trustees and employees acting pursuant
to the trust, or a custodian and the custodian's agents or
employees acting pursuant to a custodian account which meets the
requirements of Section 401(f) of the Internal Revenue Code;
(8) A credit union or a financial institution that is subject to supervision or examination by federal or state banking
authorities, or a mortgage lender, to the extent they collect and
remit premiums to licensed insurance producers or to limited lines
producers or authorized insurers in connection with loan payments;
(9) A credit card issuing company that advances for and
collects insurance premiums or charges from its credit card holders
who have authorized collection;
(10) A person who adjusts or settles claims in the normal
course of that person's practice or employment as an attorney at
law and who does not collect charges or premiums in connection with
life, annuity or accident and sickness coverage;
(11) An adjuster licensed by this state whose activities are
limited to adjustment of claims;
(12) A person licensed as a managing general agent in this
state whose activities are limited exclusively to the scope of
activities conveyed under that license; or
(13) An administrator who is affiliated with an insurer and
who only performs the contractual duties, between the administrator
and the insurer, of an administrator for the direct and assumed
business of the affiliated insurer. The insurer is responsible for
the acts of the administrator and is responsible for providing all
of the administrator's books and records to the insurance
commissioner, upon a request from the insurance commissioner. For
purposes of this subdivision, "insurer" means a licensed insurance company, prepaid hospital or medical care plan, health maintenance
organization or a health care corporation.
(b) "Affiliate or affiliated" means an entity or person who
directly or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, a specified
entity or person.
(c) "Commissioner" means the insurance commissioner of this
(d) "Control", "controlling", "controlled by" and "under
common control with" mean 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 any person, directly
or indirectly, owns, controls, holds with the power to vote or
holds proxies representing ten percent or more of the voting
securities of any other person. This presumption may be rebutted
by a showing made in the manner provided by the West Virginia
insurance holding company systems act that control does not exist
in fact. The commissioner may determine, after furnishing all
persons in interest notice and opportunity to be heard and making
specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to
(e) "GAAP" means United States generally accepted accounting
principles consistently applied.
(f) "Home state" means the District of Columbia and any state
or territory of the United States in which an administrator is
incorporated or maintains its principal place of business. If
neither the state in which the administrator is incorporated, nor
the state in which it maintains its principal place of business has
adopted the national association of insurance commissioners' model
third party administrator act or a substantially similar law
governing administrators, the administrator may declare another
state, in which it conducts business, to be its "home state."
(g) "Insurance producer" means a person who sells, solicits or
negotiates a contract of insurance as those terms are defined in
(h) "Insurer" means a person undertaking to provide life,
annuity or accident and sickness coverage or self-funded coverage
under a governmental plan or church plan in this state. For the
purposes of this article, insurer includes an employer, a licensed
insurance company, a prepaid hospital or medical care plan, health
maintenance organization or a health care corporation.
(i) "Negotiate" means the act of conferring directly with or
offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the
substantive benefits, terms or conditions of the contract, provided
that the person engaged in that act either sells insurance or
obtains insurance from insurers for purchasers.
(j) "Nonresident administrator" means a person who is applying
for licensure or is licensed in any state other than the
administrator's home state.
(k) "Person" means an individual or a business entity.
(l) "Sell" means to exchange a contract of insurance by any
means, for money or its equivalent, on behalf of an insurance
(m) "Solicit" means attempting to sell insurance or asking or
urging a person to apply for a particular kind of insurance from a
(n) "Underwrites" or "underwriting" means, but is not limited
to, the acceptance of employer or individual applications for
coverage of individuals in accordance with the written rules of the
insurer or self-funded plan; and the overall planning and
coordinating of a benefits program.
(o) "Uniform application" means the current version of the
national association of insurance commissioners uniform application
for third-party administrators.
§33-46-3. Written agreement necessary.
(a) No administrator may act as such without a written agreement between the administrator and the insurer and the written
agreement shall be retained as part of the official records of both
the insurer and the administrator for the duration of the agreement
and for ten years thereafter. The agreement shall contain all
provisions required by this statute, except insofar as those
requirements do not apply to the functions performed by the
(b) The written agreement shall include a statement of duties
that the administrator is expected to perform on behalf of the
insurer and the lines, classes or types of insurance which the
administrator is to be authorized to administer. The agreement
shall make provision with respect to underwriting or other
standards pertaining to the business underwritten by the insurer.
(c) The insurer or administrator may, with written notice,
terminate the written agreement for cause as provided in the
agreement. The insurer may suspend the underwriting authority of
the administrator during the pendency of any dispute regarding the
cause for termination of the written agreement. The insurer shall
fulfill any lawful obligations with respect to policies affected by
the written agreement, regardless of any dispute between the
insurer and the administrator.
§33-46-4. Payment to administrator.
If an insurer uses the services of an administrator, the
payment to the administrator of any premiums or charges for insurance by or on behalf of the insured party shall be considered
to have been received by the insurer and the payment of return
premiums or claim payments forwarded by the insurer to the
administrator shall not be considered to have been paid to the
insured party or claimant until the payments are received by the
insured party or claimant. Nothing in this section limits any
right of the insurer against the administrator resulting from the
failure of the administrator to make payments to the insurer,
insured parties or claimants.
§33-46-5. Maintenance of information.
(a) An administrator shall maintain and make available to the
insurer complete books and records of all transactions performed on
behalf of the insurer. The books and records shall be maintained
in accordance with prudent standards of insurance recordkeeping and
shall be maintained for a period of not less than ten years from
the date of their creation.
(b) The commissioner shall have access to books and records
maintained by an administrator for the purposes of examination,
audit and inspection. Any documents, materials or other
information in the possession or control of the commissioner that
is furnished by an administrator, insurer, insurance producer or an
employee or agent thereof acting on behalf of the administrator,
insurer or insurance producer, or obtained by the commissioner in
an investigation is confidential by law and privileged, is not subject to chapter twenty-nine-b of this code, is not subject to
subpoena and is not subject to discovery or admissible as evidence
in any private civil action. However, the commissioner may use the
documents, materials or other information in the furtherance of any
regulatory or legal action brought as a part of the commissioner's
(c) Neither the commissioner nor any person who received
documents, materials or other information while acting under the
authority of the commissioner shall be permitted or required to
testify in any private civil action concerning any confidential
documents, materials or information subject to subsection (b) of
(d) In order to assist in the performance of his or her
duties, the commissioner may:
(1) Share documents, materials or other information, including
the confidential and privileged documents, materials or information
subject to subsection (b) of this section, with other state,
federal and international regulatory agencies, with the national
association of insurance commissioners, its affiliates or
subsidiaries and with state, federal and international
law-enforcement authorities, provided that the recipient agrees to
maintain the confidentiality and privileged status of the document,
material or other information;
(2) Receive documents, materials or information, including otherwise confidential and privileged documents, materials or
information, from the national association of insurance
commissioners, its affiliates or subsidiaries and from regulatory
and law-enforcement 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 confidential or privileged under the laws
of the jurisdiction that is the source of the document, material or
(3) Enter into agreements governing the sharing and use of
information consistent with this subsection.
(e) No waiver of any applicable privilege or claim of
confidentiality in the documents, materials or information shall
occur as a result of disclosure to the commissioner under this
section or as a result of sharing as authorized in subsection (d)
of this section.
(f) Nothing in this article prohibits the commissioner from
releasing final, adjudicated actions, including for cause
terminations, that are open to public inspection pursuant to
chapter twenty-nine-b of this code to a database or other
clearinghouse service maintained by the national association of
insurance commissioners, its affiliates or subsidiaries.
(g) The insurer owns the records generated by the
administrator pertaining to the insurer; however, the administrator shall retain the right to continuing access to books and records to
permit the administrator to fulfill all of its contractual
obligations to insured parties, claimants and the insurer.
(h) In the event the insurer and the administrator cancel
their agreement; the administrator may, by written agreement with
the insurer, transfer all records to a new administrator rather
than retain them for ten years not withstanding the provisions of
subsection (a) of this section. In those cases, the new
administrator shall acknowledge, in writing, that it is responsible
for retaining the records of the prior administrator as required in
subsection (a) of this section.
§33-46-6. Approval of advertising.
An administrator may use only advertising pertaining to the
business underwritten by an insurer that has been approved in
writing by the insurer in advance of its use.
§33-46-7. Responsibilities of the insurer.
(a) If an insurer uses the services of an administrator, the
insurer is responsible for determining the benefits, premium rates,
underwriting criteria and claims payment procedures applicable to
the coverage and for securing reinsurance, if any. The rules
pertaining to these matters shall be provided, in writing, by the
insurer to the administrator. The responsibilities of the
administrator as to any of these matters shall be set forth in the
written agreement between the administrator and the insurer.
(b) It is the sole responsibility of the insurer to provide
for competent administration of its programs.
(c) In cases where an administrator administers benefits for
more than one hundred certificate holders on behalf of an insurer,
the insurer shall, at least semiannually, conduct a review of the
operations of the administrator. At least one review shall be an
on-site audit of the operations of the administrator.
(d) For purposes of this section, "insurer" means a licensed
insurance company, prepaid hospital or medical care plan, health
maintenance organization or a health care corporation.
§33-46-8. Premium collection and payment of claims.
(a) All insurance charges or premiums collected by an
administrator on behalf of or for an insurer, and the return of
premiums received from that insurer, shall be held by the
administrator in a fiduciary capacity. The funds shall be
immediately remitted to the person entitled to them or shall be
deposited promptly in a fiduciary account established and
maintained by the administrator in a federally or state-insured
financial institution. The written agreement between the
administrator and the insurer shall provide for the administrator
to periodically render an accounting to the insurer detailing all
transactions performed by the administrator pertaining to the
business underwritten by the insurer.
(b) If charges or premiums deposited in a fiduciary account have been collected on behalf of or for one or more insurers, the
administrator shall keep records clearly recording the deposits in
and withdrawals from the account on behalf of each insurer. The
administrator shall keep copies of all the records and, upon
request of an insurer, shall furnish the insurer with copies of the
records pertaining to the deposits and withdrawals.
(c) The administrator shall not pay any claim by withdrawals
from a fiduciary account in which premiums or charges are
deposited. Withdrawals from the account shall be made as provided
in the written agreement between the administrator and the insurer.
The written agreement shall address, but not be limited to, the
(1) Remittance to an insurer entitled to remittance;
(2) Deposit in an account maintained in the name of the
(3) Transfer to and deposit in a claims-paying account, with
claims to be paid as provided for in subsection (d) of this
(4) Payment to a group policyholder for remittance to the
insurer entitled to the remittance;
(5) Payment to the administrator of its commissions, fees or
(6) Remittance of return premium to the person or persons
entitled to the return premium.
(d) All claims paid by the administrator from funds collected
on behalf of or for an insurer shall be paid only on drafts or
checks of and as authorized by the insurer.
§33-46-9. Compensation to the administrator.
(a) An administrator may not enter into an agreement or
understanding with an insurer in which the effect is to make the
amount of the administrator's commissions, fees or charges
contingent upon savings effected in the adjustment, settlement and
payment of losses covered by the insurer's obligations. This
provision shall not prohibit an administrator from receiving
performance-based compensation for providing hospital or other
(b) This section shall not prevent the compensation of an
administrator from being based on premiums or charges collected or
the number of claims paid or processed.
§33-46-10. Notice to covered individuals; disclosure of charges
(a) When the services of an administrator are used, the
administrator shall provide a written notice approved by the
insurer to covered individuals advising them of the identity of,
and relationship among, the administrator, the policyholder and the
(b) When an administrator collects funds, the reason for
collection of each item shall be identified to the insured party and each item shall be shown separately from any premium.
Additional charges may not be made for services to the extent the
services have been paid for by the insurer.
(c) The administrator shall disclose to the insurer all
charges, fees and commissions received from all services in
connection with the provision of administrative services for the
insurer, including any fees or commissions paid by insurers
§33-46-11. Delivery of materials to covered individuals.
Any policies, certificates, booklets, termination notices or
other written communications delivered by the insurer to the
administrator for delivery to insured parties or covered
individuals shall be delivered by the administrator promptly after
receipt of instructions from the insurer to deliver them.
§33-46-12. Home state certificate of authority or license.
(a) Prior to conducting business in West Virginia an
administrator or third-party administrator must be licensed in
accordance with the requirements of this article.
(b) If West Virginia is a person's home state, then the person
may apply for licensure in this state by filing a uniform
application with the insurance commissioner. The application shall
include or be accompanied by the following information and
(1) All basic organizational documents of the applicant, including any articles of incorporation, articles of association,
partnership agreement, trade name certificate, trust agreement,
shareholder agreement and other applicable documents and all
amendments to the documents;
(2) The bylaws, rules, regulations or similar documents
regulating the internal affairs of the applicant;
(3) National association of insurance commissioners'
biographical affidavits for the individuals who are responsible for
the conduct of affairs of the applicant, including all members of
the board of directors, board of trustees, executive committee or
other governing board or committee; the principal officers in the
case of a corporation or the partners or members in the case of a
partnership, association or limited liability company; any
shareholders or member holding directly or indirectly ten percent
or more of the voting stock, voting securities or voting interest
of the applicant; and any other person who exercises control or
influence over the affairs of the applicant;
(4) Audited annual financial statements or reports for the two
most recent fiscal years that prove that the applicant has a
positive net worth. If the applicant has been in existence for
less than two fiscal years, the application shall include financial
statements or reports, certified by an officer of the applicant and
prepared in accordance with GAAP, for any completed fiscal years
and for any month during the current fiscal year for which the financial statements or reports have been completed. An audited
financial/annual report prepared on a consolidated basis shall
include a columnar consolidating or combining worksheet that shall
be filed with the report and include the following:
(A) Amounts shown on the consolidated audited financial
(B) Amounts for each entity stated separately; and
(C) Explanations of consolidating and eliminating entries.
The applicant shall also include any other information
required by the commissioner in order to review the current
financial condition of the applicant;
(5) A statement describing the business plan including
information on staffing levels and activities proposed in this
state and nationwide. The plan shall provide details setting forth
the applicant's capability for providing a sufficient number of
experienced and qualified personnel in the areas of claims
processing, recordkeeping and underwriting; and
(6) Any other pertinent information required by the
(c) An administrator licensed or applying for licensure under
this section shall make available for inspection by the
commissioner copies of all contracts with insurers or other persons
using the services of the administrator.
(d) An administrator licensed or applying for licensure under this section shall produce its accounts, records and files for
examination and make its officers available to give information
with respect to its affairs as often as reasonably required by the
(e) The commissioner may refuse to issue a certificate of
authority or license if the commissioner determines that the
administrator, or any individual responsible for the conduct of
affairs of the administrator, is not competent, trustworthy,
financially responsible or of good personal and business reputation
or has had an insurance or an administrator certificate of
authority or license denied or revoked for cause by any
jurisdiction, or if the commissioner determines that any of the
grounds set forth in section seventeen of this article exists with
respect to the administrator.
(f) A certificate of authority or license issued under this
section shall remain valid, unless surrendered, suspended or
revoked by the commissioner, for as long as the administrator
continues in business in this state and remains in compliance with
(g) An administrator licensed or applying for licensure under
this section shall immediately notify the commissioner of any
material change in its ownership, control or other fact or
circumstance affecting its qualification for a certificate of
authority or license in this state.
(h) An administrator licensed or applying for a home state
certificate of authority/license that administers or will
administer governmental or church self-insured plans in its home
state or any other state shall maintain a surety bond for the use
and benefit of the home state commissioner and the insurance
regulatory authority of any additional state in which the
administrator is authorized to conduct business and cover
individuals and persons who have remitted premiums or insurance
charges or other moneys to the administrator in the course of the
administrator's business in the lessor of the following amounts:
(1) One hundred thousand dollars; or
(2) Ten percent of the aggregate total amount of self-funded
coverage under church plans or governmental plans handled in the
administrator's home state and all additional states in which the
administrator is authorized to conduct business.
§33-46-13. Registration requirement.
A person who directly or indirectly underwrites, collects
charges or premiums from, or adjusts or settles claims on residents
of this state, in connection with life, annuity or accident and
sickness coverage provided by a self-funded plan other than a
governmental or church plan shall register with the commissioner
annually, verifying its status as in this article described.
§33-46-14. Nonresident administrator
(a) Unless an administrator has obtained a home state license
in this state under section twelve of this article, any
administrator who performs administrator duties in this state shall
obtain a nonresident administrator license in accordance with this
section by filing with the commissioner the uniform application,
accompanied by a letter of certification. In lieu of requiring an
administrator to file a letter of certification with the uniform
application, the commissioner may verify the nonresident
administrator's home state certificate of authority or license
status through an electronic database maintained by the national
association of insurance commissioners, its affiliates or
(b) An administrator is not eligible for a nonresident
administrator license under this section if it does not hold a
certificate of authority or license as a resident in a home state
that has adopted the national association of insurance
commissioners' model third-party administrator act or a
substantially similar law governing administrators.
(c) Except as provided in subsections (b) and (h) of this
section, the commissioner shall issue to the administrator a
nonresident administrator license promptly upon receipt of a
complete application and the application fee.
(d) Unless notified by the commissioner that the commissioner
is able to verify the nonresident administrator's home state
certificate of authority or license status through an electronic
database maintained by the national association of insurance
commissioners, its affiliates or subsidiaries, each nonresident
administrator shall annually file a statement that its home state
administrator certificate of authority or license remains in force
and has not been revoked or suspended by its home state during the
(e) At the time of filing the statement required under
subsection (d) of this section or, if the commissioner has notified
the nonresident administrator that the commissioner is able to
verify the nonresident administrator's home state certificate of
authority or license status through an electronic database, on or
before the first day of October, the nonresident administrator
shall pay the fee set forth in section fifteen of this article.
(f) An administrator licensed or applying for licensure under
this section shall produce its accounts, records and files for
examination and make its officers available to give information
with respect to its affairs as often as reasonably required by the
(g) A nonresident administrator is not required to hold a
nonresident administrator license in this state if the
administrator's duties in this state are limited to the
administration of a group policy or plan of insurance and no more
than a total of one hundred lives for all plans reside in this
state. This subsection applies only to multistate administrators.
The administrator must be licensed in its home state regardless of
the number of lives under a group policy or plan.
(h) The commissioner may refuse to issue a nonresident
administrator license, or may delay the issuance of a nonresident
administrator license, if the commissioner determines that, due to
events or information obtained subsequent to the home state's
licensure of the administrator, the nonresident administrator
cannot satisfy the requirements of this article or that grounds
exist for the home state's revocation or suspension of the
administrator's home state certificate of authority or license. In
that event, the commissioner shall give written notice of its
determination to the commissioner of the home state and the
commissioner may delay the issuance of a nonresident administrator
license to the nonresident administrator until such time, if at
all, that the commissioner determines that the administrator can
satisfy the requirements of this article and that no grounds exist
for the home state's revocation or suspension of the
administrator's home state certificate of authority or license.
§33-46-15. Fees and charges.
Except where it is otherwise specially provided, the
commissioner shall assess third-party administrators the following
fees: For annual fee for each license, two hundred dollars; for
receiving and filing annual reports, one hundred dollars; for filing a certified copy of articles of incorporation, fifty
dollars; for filing a copy of its charter, fifty dollars; for
filing statements preliminary to admission, one hundred dollars;
for filing any additional paper required by law or furnishing
copies of the additional paper, one dollar; and for every copy of
a report or certificate of condition of administrator to be filed
in any other state, twenty-five dollars. The commissioner may by
rule set reasonable charges for printed forms for the annual
statements required by law. He or she may sell at cost
publications purchased by, or printed on behalf of the
commissioner. All fees and moneys collected shall be used for the
purposes set forth in section thirteen, article three of this
§33-46-16. Annual report and filing fee.
(a) Each administrator licensed under section twelve of this
article shall file an annual report for the preceding calendar year
with the commissioner on or before the first day of July of each
year or within an extension of time granted by the commissioner for
good cause. The annual report shall include an audited financial
statement performed by an independent certified public accountant.
An audited financial/annual report prepared on a consolidated basis
shall include a columnar consolidating or combining worksheet that
shall be filed with the report and include the following:
(1) Amounts shown on the consolidated audited financial report;
(2) Amounts for each entity stated separately; and
The report shall be in the form and contain any matters
prescribed by the commissioner and shall be verified by at least
two officers of the administrator.
(3) Explanations of consolidating and eliminating entries.
(b) The annual report shall include the complete names and
addresses of all insurers with which the administrator had
agreements during the preceding fiscal year.
(c) At the time of filing its annual report, the administrator
shall pay the filing fee provided in section fifteen of this
(d) The commissioner shall review the most recently filed
annual report of each administrator on or before the first day of
September of each year. Upon completion of its review, the
commissioner shall either:
(1) Issue a certification to the administrator that the annual
report shows that the administrator has a positive net worth as
evidenced by audited financial statements and is currently licensed
and in good standing, or noting any deficiencies found in that
annual report and financial statements; or
(2) Update any electronic database maintained by the national
association of insurance commissioners, its affiliates or
subsidiaries, indicating the annual report shows that the
administrator has a positive net worth as evidenced by audited
financial statements and is in compliance with existing law, or
noting any deficiencies found in the annual report.
§33-46-17. Grounds for denial, suspension or revocation of
(a) The license of an administrator shall be denied, suspended
or revoked if the commissioner finds that the administrator:
(1) Is in an unsound financial condition;
(2) Is using methods or practices in the conduct of its
business that render its further transaction of business in this
state hazardous or injurious to insured persons or the public; or
(3) Has failed to pay any judgment rendered against it in this
state within sixty days after the judgment has become final.
(b) The commissioner may deny, suspend or revoke the license
of an administrator if the commissioner finds that the
(1) Has violated any lawful rule or order of the commissioner
or any provision of the insurance laws of this state;
(2) Has refused to be examined or to produce its accounts,
records and files for examination, or if any individual responsible
for the conduct of affairs of the administrator, including members
of the board of directors, board of trustees, executive committee
or other governing board or committee; the principal officers in
the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any
shareholder or member holding directly or indirectly ten percent or
more of the voting stock, voting securities or voting interest of
the administrator; and any other person who exercises control or
influence over the affairs of the administrator; has refused to
give information with respect to its affairs; or has refused to
perform any other legal obligation as to an examination, when
required by the commissioner;
(3) Has, without just cause, refused to pay proper claims or
perform services arising under its contracts or has, without just
cause, caused covered individuals to accept less than the amount
due them or caused covered individuals to employ attorneys or bring
suit against the administrator to secure full payment or settlement
of their claims;
(4) At any time fails to meet any qualification for which
issuance of the license could have been refused had the failure
then existed and been known to the commissioner;
(5) Or any of the individuals responsible for the conduct of
its affairs, including members of the board of directors, board of
trustees, executive committee or other governing board or
committee; the principal officers in the case of a corporation or
the partners or members in the case of a partnership, association
or limited liability company; any shareholder or member holding
directly or indirectly ten percent or more of its voting stock, voting securities or voting interest; and any other person who
exercises control or influence over its affairs has been convicted
of, or has entered a plea of guilty or nolo contendere to, a felony
without regard to whether the adjudication was withheld;
(6) Is under suspension or revocation in another state; or
(7) Has failed to timely file its annual report pursuant to
section sixteen of this article, if a resident administrator, or
its statement and filing fee, as applicable, pursuant to
subsections (d) and (e), section fourteen of this article if a
(c) The commissioner may, in his or her discretion and without
advance notice or hearing, immediately suspend the license of an
administrator if the commissioner finds that one or more of the
following circumstances exist:
(1) The administrator is insolvent or impaired;
(2) A proceeding for receivership, conservatorship,
rehabilitation or other delinquency proceeding regarding the
administrator has been commenced in any state; or
(3) The financial condition or business practices of the
administrator otherwise pose an imminent threat to the public
health, safety or welfare of the residents of this state.
(d) If the commissioner finds that one or more grounds exist
for the suspension or revocation of a license issued under this
article, in any case except where that action is not mandatory, the commissioner may, in lieu of suspension or revocation, by order
require the administrator to pay to the state of West Virginia a
penalty in a sum not exceeding ten thousand dollars and upon the
failure of the administrator to pay the penalty within thirty days
after notice of the penalty, the commissioner may revoke or suspend
the license of the administrator.
(e) When any license has been revoked or suspended or renewal
of the license refused, the commissioner may reissue, terminate the
suspension or renew the license when he or she is satisfied that
the conditions causing the revocation, suspension or refusal to
renew have ceased to exist and are unlikely to recur.
§33-46-18. Exemption for administrators of public health programs.
Programs supervised by the department of health and human
resources, pursuant to chapter nine of this code; the public
employees insurance agency, pursuant to articles sixteen and
sixteen-c, chapter five of this code; and the department of
administration, pursuant to article sixteen-b, chapter five of this
code, are exempted from the provisions of this article. Third-
party administrators who administer the above-referenced programs
are exempt from the provisions of this article with respect to
these specific programs only.
§33-46-19. Unauthorized business.
The unauthorized conduct of the business of an administrator
shall be treated as unauthorized insurance business and shall be subject to the same criminal and civil penalties as provided in
article forty-four for violation of the unauthorized insurers act.
§33-46-20. Commissioner authorized to propose rules.
The insurance commissioner may propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code that are necessary to effectuate