ATTORNEY GENERAL HENRY HAS ASKED ME TO RESPOND TO YOUR RECENT LETTER CONCERNING THE REGULATORY AUTHORITY OF THE INSURANCE COMMISSIONER OVER THIRD-PARTY ADMINISTRATORS, ADMINISTRATIVE SERVICE ONLY COMPANIES AND HMO PROVIDERS. THERE DOES NOT APPEAR TO BE A NEED TO ISSUE A FORMAL RESPONSE TO YOUR INQUIRY BECAUSE A CLEAR READING OF THE CONTROLLING STATUTES DISCLOSES THE ANSWER TO AT LEAST TWO OF YOUR QUESTIONS.
YOUR INQUIRY FIRST QUESTIONS THE JURISDICTION OF THE INSURANCE COMMISSIONER OVER THIRD-PARTY ADMINISTRATORS. THE THIRD-PARTY ADMINISTRATOR ACT, 36 O.S. 1441 (1989) ET SEQ., (I HAVE ENCLOSED A COPY OF THE STATUTE FOR YOUR CONVENIENCE) IS THE CONTROLLING STATUTE AND PROVIDES FOR LICENSING AND REGULATION BY THE INSURANCE COMMISSIONER
YOU ALSO INQUIRE AS TO THE REGULATION OF HMO PROVIDERS. HEALTH MAINTENANCE ORGANIZATIONS ARE ESTABLISHED PURSUANT TO 63 O.S. 2501 (19891) ET SEQ., AS AMENDED (SEE ENCLOSED COPY) AND ARE UNDER THE JURISDICTION OF THE OKLAHOMA STATE DEPARTMENT OF HEALTH. (SEE 2508 WHICH FIXES THE DUTIES OF THE STATE DEPARTMENT OF HEALTH). THE INSURANCE COMMISSIONER DOES HAVE A MINOR ROLE IN THE LICENSING PROCESS PURSUANT TO 63 O.S. 2504 WHICH PROVIDES IN PART AS FOLLOWS:
PRIOR TO THE ISSUING OF ANY LICENSE TO A HEALTH MAINTENANCE ORGANIZATION, THE DEPARTMENT SHALL FORWARD ONE COPY OF THE APPLICATION TO THE STATE INSURANCE COMMISSIONER, WHO SHALL BE REQUIRED WITHIN THIRTY (30) DAYS TO REVIEW SAID APPLICATION WITH REGARD TO THE PROVISIONS IN THE APPLICATION FOR FISCAL RESPONSIBILITY AND FIDUCIAL INTEGRITY, AND MAKE RECOMMENDATIONS TO THE DEPARTMENT.
HOWEVER, 63 O.S. 2504 FURTHER PROVIDES THAT THE DEPARTMENT OF HEALTH MAY PROCEED TO MAKE A DETERMINATION UPON THE APPLICATION AS SUBMITTED IF A RESPONSE IS NOT RECEIVED FROM THE STATE INSURANCE COMMISSIONER WITHIN THIRTY DAYS.
IN REVIEWING YOUR QUESTIONS I CONTACTED THE LEGAL DIVISION OF THE OKLAHOMA INSURANCE COMMISSION AND THEY ALSO READ THE APPLICABLE STATUTES AS STATED ABOVE. HOWEVER, WE ARE BOTH UNCLEAR AS TO THE MEANING OF ADMINISTRATIVE SERVICE ONLY COMPANIES. N IF YOU ARE REFERRING TO A COMPANY THAT MERELY COLLECTS PREMIUMS AND ADJUSTS OR SETTLES CLAIMS FOR AN INSURER, THAT FUNCTION IS INCORPORATED IN THE DEFINITION OF ADMINISTRATOR UNDER THE THIRD-PARTY ADMINISTRATOR ACT, 36 O.S. 1442(1).
(NED BASTOW)