CHAPTER 21 ‑ THIRD PARTY ADMINISTRATORS
SECTION .0100 ‑ GENERAL PROVISIONS
11 NCAC 21 .0101 DEFINITIONS: LICENSE APPLICATIONS
(a) The definitions in G.S. 58-56-2 are incorporated into
this Chapter by reference.
(b) In addition to those items listed in G.S. 58-56-51, the
following items shall be filed in order to constitute a complete application
for initial or renewal TPA licensure:
(1) Transmittal form;
(2) An application for administrator's license;
(3) Biographical form(s) completed by principal
officers;
(4) A narrative description specifying the
TPA's services performed in North Carolina;
(5) A power of attorney duly executed by the
TPA, if not domiciled in North Carolina, appointing the Commissioner as
attorney for the TPA in and for this State, upon whom process in any legal
action or proceeding against the TPA on a cause of action arising in this State
may be served;
(6) Internal controls narrative; and
(7) Administrator's questionnaire.
(c) Copies of all forms may be obtained from the Department.
History Note: Authority G.S. 58-2-40; 58-16-30;
58-56-2; 58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0102 FINANCIAL
STATEMENTS
The financial statements required by G.S. 58-56-51(b)(4)
shall include a balance sheet, a statement of operations, and a statement of
cash flows for the TPA's two most recent fiscal years. Financial statements
shall be prepared by an independent certified public accountant. Financial
statements of a TPA's parent company are acceptable if those statements contain
consolidating schedules that include a breakout of the finances of the TPA, and
if the certified public accountant's opinion letter does not disclaim
association with the consolidating schedules.
History Note: Authority G.S. 58-2-40; 58-2-205;
58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0103 DETERMINATION OF FINANCIAL
RESPONSIBILITY
In determining the financial responsibility of an applicant
for a TPA license, the Department shall require that an applicant be solvent.
In addition, the Department shall consider:
(1) Liquidity;
(2) Any internal controls the applicant may have in
place to afford protection for benefit plans, which may include the manner in
which benefit plan fund accounts are established; and
(3) Segregation of duties.
History Note: Authority G.S. 58-2-40; 58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0104 SERVICE CONTRACTS
No TPA shall enter into an agreement to administer insurance
with an insurance company or health maintenance organization unless the company
or HMO is licensed to operate in North Carolina.
History Note: Authority G.S. 58-2-40; 58-56-6;
58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0105 CLAIM ADJUSTING BY TPAs
A TPA or an employee of a TPA does not have to have a
license to adjust insurance claims for an insurer with which the TPA has a
written agreement under G.S. 58-56-6.
History Note: Authority G.S. 58-2-40; 58-56-2(5);
58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0106 PAYMENT OF CLAIMS
If claims filed with a TPA or insurer are not paid within 30
days after receipt of the initial claim by the TPA or the insurer, the TPA or
the insurer shall at that time mail a claim status report to the claimant.
History Note: Authority G.S. 58-2-40; 58-3-100;
58-56-31;
Eff. June 1, 1996.
11 NCAC 21 .0107 GENERAL ADMINISTRATION
Every TPA shall:
(1) Establish a governing body that is authorized to
set policy for the organization.
(2) Maintain complete corporate records in a secure and
accessible location.
(3) Employ a management information system that is able
to provide information on all areas of the TPA operations.
(4) Set internal policies and procedures for contract
management.
History Note: Authority G.S. 58-2-40; 58-56-6;
58-56-16; 58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0108 CLAIMS ADMINISTRATION
(a) Each TPA's claims administration service shall be
supported by a set of written policies, procedures, and performance standards
related to timeliness in payment of claims and its financial operations.
(b) Each TPA shall develop and implement a claims
administration internal audit and a quality assurance program to monitor and
improve claims processing services.
History Note: Authority G.S. 58-2-40; 58-56-26;
58-56-31; 58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0109 MARKETING AND SALES
(a) Each TPA shall ensure that all direct sales staff and
brokers are licensed by the State of North Carolina to sell insurance and meet
all continuing education requirements.
(b) Each TPA that markets or sells insurance products shall
quote only premium rates that have been filed with, and if applicable, approved
by the Commissioner for those products. Where premium rates accompany a policy
form filing and the rates are not subject to approval but the policy form
filing is subject to approval, the TPA shall not quote those premium rates
until the related forms have been approved by the Commissioner.
History Note: Authority G.S. 58-2-40; 58-56-31;
58-56-51; 58-63-15; 58-63-65;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
11 NCAC 21 .0110 SERVICES TO INSUREDS
(a) Each TPA shall make available to insureds and insurers
a written description of its premium collection and claims payment policies and
procedures.
(b) Each TPA shall be accessible to insureds and insurers
by telephone to respond to inquiries about premium collections and claims
payments.
History Note: Authority G.S. 58-2-40; 58-56-41;
58-56-51;
Eff. June 1, 1996;
Pursuant to G.S. 150B-21.3A, rule is necessary without
substantive public interest Eff. December 16, 2014.
