Key Takeaways
- The Delaware Department of Insurance (Department) is conducting targeted market conduct exams of Third Party Administrators (TPAs) for compliance with state insurance laws and regulations.
- Reviews will cover areas such as claims handling, premium collection, disclosures, audits and operational practices, following NAIC guidelines.
- The Department will consider each TPAs specific business activities in Delaware and nationally when determining examination requirements.
Recently, the Department began notifying TPAs domiciled in Delaware that they will undergo targeted market conduct examinations.
According to the Department, these market conduct examinations are designed to review TPAs’ practices and procedures for compliance with 18 Del Admin Code 1406, Delaware insurance statutes, rules and regulations, and Department of Insurance Bulletins. Additionally, the Department stated that the scope of these market conduct examinations includes all services where a TPA directly or indirectly underwrites, collects charges or premiums, or denies, modifies, adjusts or settles claims on residents of Delaware in connection with health coverage offered or provided by an insurer.
The Department also indicated that the format of the market conduct examination reports will follow the format recommended by the NAIC Market Regulation Handbook and that the functional areas to be reviewed in the exams include:
- Company operations and management;
- Complaints;
- Terminated agreements;
- Advertising;
- Audits;
- Notice to covered individuals;
- Disclosure of charges and fees;
- Requirements of written agreement;
- Payments to the TPA;
- Maintenance of information;
- Premium collection and payment of claims; and
- Delivery of materials to covered individuals.
In our discussions with the Department regarding these examinations, we have learned that the Department will consider the scope of a TPA’s actual business and activities in Delaware and nationally when evaluating the information that will be required during an examination.