SB 2773 - Third Party Administrators

• Establishes licensing requirements for third party administrators (TPAs) who collect premiums or adjust claims for self-insurance, workers' compensation, life insurance, or health insurance in Hawaii, with specific exemptions for employers, unions, insurers, and licensed professionals.

• Requires TPAs to obtain a license from the insurance commissioner, maintain a minimum $300,000 surety bond, file annual audited financial statements, and comply with written agreement requirements with insurers.

• Mandates TPAs maintain fiduciary accounts for collected premiums and return premiums, with restrictions on account withdrawals limited to remittance to insurers, claims payments, and administrator compensation.

• Requires TPAs to provide written notice to insureds disclosing relationships between administrator, insurer, and insured; maintain complete records for commissioner inspection; and file annual reports identifying all affiliated insurers.

• Establishes grounds for license denial, suspension, or revocation including insolvency, unsafe business practices, failure to pay judgments, violations of rules, and inadequate claim handling; sets licensing fees at $150 for issuance and $150 annually for renewal.