HB 5090 Summary

• Establishes licensing requirements for third-party administrators (TPAs) that underwrite, collect premiums, or settle claims for life, annuity, or health coverage in Connecticut, effective October 1, 2010.

• Requires TPAs to maintain written agreements with insurers specifying activities, responsibilities, underwriting standards, accounting procedures, and termination provisions.

• Mandates TPAs hold collected premiums in fiduciary accounts, maintain detailed records for five years, and prohibit compensation contingent on claims savings or reduction of losses.

• Requires TPAs applying for licensure to submit uniform applications, audited financial statements showing positive net worth, business plans, and biographical information on responsible individuals; annual license fees of $500 with $350 renewal fees.

• Grants Insurance Commissioner authority to suspend or revoke TPA licenses for unsound financial condition, violations of insurance law, refusal to cooperate with examinations, or other specified grounds, and allows market conduct examinations of TPAs.