Third Party Administrators

 

Authority: Wyoming Insurance Department Regulations, Chapter 4, Administrators

 

Registration Required (Regulations, Section 14)

  • No insurer shall transact business in this state through an administrator unless the administrator has been registered and appointed by the insurer and the Department has issued a certificate of registration. 
  • The Department does not distinguish between resident and nonresident Third Party Administrators. 
  • Only business entities are licensed as Third Party Administrators.

 

Definition of Administrator (Regulations, Section 3)

A third part administrator (TPA) is any person who collects charges or premiums from, or who pays or settles claims on, residents of this state in connection with life, health/disability insurance coverage or variable annuity contracts, except a/an:

 

  • Employer on behalf of employees,
  • Union on behalf of members,
  • Fully self-funded insurance plan meeting ERISA definition,
  • Insurance company licensed in this state,
  • Prepaid hospital or medical care plan (This includes prepaid dental and vision prepaid programs not associated with an insurance policy),
  • Insurance producer acting in the capacity of a producer,
  • Creditor on behalf of debtors,
  • Financial institution when acting as such and not as an administrator,
  • Credit card company, provided that company does not adjust or settle claims, or
  • Person who adjusts or settles claims in the normal course of his business as an attorney or a licensed adjuster who does not collect charges or premiums in connection with insurance coverage or annuities.

 

Unless an entity falls into one of the exceptions listed above, there is no waiver of the registration requirement.  All TPA’s not exempted above must register with the Department. 

 

Renewal/Continuation of License (Regulations, Section 16)

  • Registrations renew annually on March 31.
  • Renewal notices are mailed on or before February 1.
  • Wyoming Application for TPA Registration (marked as Renewal) and required attachments must be filed on or before March 31. 

 

Fee:

No licensing or renewal fees are required.

 

Forms:

 

Updating Ownership, Address or Other Vital Information

The administrator may provide updated information throughout the year by letter or during the renewal process via the renewal application.  Forms and information to change a business entity name are located on the Address/Name Change page.

 

Written Agreement Necessary (Regulations, Section 4)

  • A written agreement between the TPA and the insurer is required and must be retained by the insurer and administrator for the duration of the contract and 3 years thereafter.
  • The agreement does not need to be filed with the Department.  Only the Insurer/Third Party Administrator Contract Checklist needs to be filed. 
  • The agreement must contain provisions that comply with Sections 4 through 13 of the Regulation, unless the provisions do not apply to the TPA’s functions.
  •  The provisions may be included as an appendix to the agreement so long as those terms supersede any conflicting contract language.
  • The Insurer/Third Party Administrator Contract Checklist must be filed subsequent to any contract being entered throughout the licensing period.

 

Appointment by Insurer (Regulations, Section 15)

  • Insurer must be authorized to conduct insurance in Wyoming in the lines of life, disability or variable contracts.
  • The insurer is required to certify that the TPA is competent, trustworthy, financially responsible and of good reputation.
  • The insurer must agree that any violation of the Wyoming Insurance Code or any rule of final order of the commissioner by the administrator while acting within its apparent scope of authority for the insurer shall be deemed to be a violation of the code by the insurer.
  • The Insurer Appointment of Third Party Administrator form must be filed subsequent to any contract being entered throughout the licensing period.

 

Bond Required/Amount (Regulations, Section 17)

  • A bond is required for no less than 10% of the amount of total funds to be handled by the TPA.  The minimum bond is $1,000 and the maximum is $500,000, unless a larger amount if required by the Commissioner.
  • The bond amount is determined by the total amount of funds handled by the TPA in the preceding year or, if no funds were handled in the preceding year, the amount reasonably estimated to be handled during the current licensing year. 
  • Bond must be issued by a non-affiliated insurer admitted in Wyoming with a surety line of authority.
  • Bond shall provide protection to the insurer’s policyholders or insureds in this state against loss by any reason of acts of fraud or dishonesty and negligence by the administrator.

 

Waiver of Bond (Regulations, Section 17(b))

  • The Department has considered waiving bonds on a case-by-case basis. 
  • Bonds are rarely waived and waivers are considered only if the administrator is handling business for fewer than 3 lives or $1,500 in total funds handled.
  • A request for a waiver of bond may be submitted via a letter to the Commissioner. 

 

Other Licenses may be Required (Regulations, Section 12)

  • A producer license is required if the administrator solicits applications for insurance or annuities for an insurer, negotiates insurance or annuities on its behalf, or carries out insurance policies. 
  • A producer license is required if, for compensation, the TPA is soliciting negotiating or procuring insurance or renewal for insureds or prospective insured.
  • Adjuster license is required if an individual is investigating and negotiating settlements of claims. The Department does not license accident, health or life adjusters.  Only individuals adjusting property, casualty and crop claims are licensed as adjusters. 

 

Notice to Insureds (Regulations, Section 13)

The administrator must provide written notice to insured individuals advising them of the identity and relationship between the administrator and the insurer.

 

 

 

Effective April 15, 2011