(1) The certificate
of authority or license of a third party administrator may be denied,
suspended, or revoked if the Commissioner finds that the third party
administrator:
(a) Has violated any lawful
rule or order of the Commissioner or any provision of the insurance laws of
this state specifically applicable to third party administrators;
(b) Is in an unsound financial or operational
condition. The Commissioner, in evaluating the financial or operational
condition of a third party administrator, may utilize the criteria contained in
Chapter 0780-01-66. The Commissioner may consider such other factors in
evaluating the financial or operational condition of a third party
administrator deemed to be appropriate;
(c) Is using such methods or practices in the
conduct of its business so as to render its further transaction of business in
this state hazardous or injurious to insured persons or the public;
(d) Has failed to pay any judgment rendered
against it in this state within sixty (60) days after the judgment has become
final;
(e) Has refused to be
examined or to make available its accounts, records and files for examination,
or if any individual responsible for the conduct or affairs of the third party
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 (10%) or more of the voting
stock, voting securities or voting interest of the third party administrator;
and any other person who exercises control or influence over the affairs of the
third party 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;
(f) Has, without just cause, refused to pay
proper claims or perform services arising under its contracts or has, without
just cause, caused covered employees to accept less than the amount due them or
caused covered employees to employ attorneys or bring suit against the third
party administrator or employer or pool to secure full payment or settlement of
such claims;
(g) At any time fails
to meet any qualification for which issuance of the certificate could have been
refused had the failure then existed and been known to the
Commissioner;
(h) If 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 (10%) 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 adjudication was withheld;
(i) Is under suspension or revocation in
another state; or
(j) Has failed to
timely file its annual renewal application pursuant to Rule
0780-01-81-.09.
(2) The
Commissioner may, in his or her discretion after making the finding required by
T.C.A. §
4-5-320 that public health, safety
or welfare imperatively requires emergency action, and without advance notice
or hearing, immediately suspend the certificate of authority or license of a
third party administrator if the Commissioner finds that one or more of the
following circumstances exist:
(a) The third
party administrator is insolvent or impaired;
(b) A proceeding for receivership,
conservatorship, rehabilitation, or other delinquency proceeding regarding the
third party administrator has been commenced in any state; or
(c) The financial condition or business
practices of the third party administrator otherwise pose an imminent threat to
the public health, safety, or welfare of the residents of this state.
(3) Any action by the Commissioner
to suspend or revoke a certificate of authority pursuant to this Chapter shall
be governed by the Uniform Administrative Procedures Act, compiled in T.C.A.
§§
4-5-101, et
seq.
(4) The Commissioner
may serve a notice or order in any action arising under this Chapter by
registered or certified mail to the third party administrator at the address of
record in the files of the Commissioner. Service in the manner set forth herein
shall be deemed to constitute service and reasonable notice to such third party
administrator or applicant. The Commissioner may also serve notice of such
action to all known employers or pools serviced by the third party
administrator.
(5) Nothing in this
Rule shall be deemed to create a private cause of action against a third party
administrator.
