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SB0134b -1- HCS SB 134(HSS)
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HOUSE CS FOR SENATE BILL NO. 134(HSS)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - FIRST SESSION
BY THE HOUSE HEALTH AND SOCIAL SERVICES COMMITTEE
Offered: 5/16/25
Referred: Rules
Sponsor(s): SENATOR GIESSEL
A BILL
FOR AN ACT ENTITLED
"An Act relating to pharmacy bene fits managers; relating to thi rd-party 1
administrators; and providing for an effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. AS 21.06.120(a) is amended to read: 4
(a) The director may examine th e affairs, transactions, accoun ts, records, and 5
assets of each authorized and formerly authorized insurer and e ach licensed and 6
formerly licensed managing general agent, reinsurance intermedi ary broker, 7
reinsurance intermediary manager, surplus lines broker, pharmacy benefits manager, 8
and surplus lines association as often as the director considers advisable. In scheduling 9
and determining the nature, scop e, and frequency of examination s , th e d ir e c to r may 10
consider any factor or material that the director determines is appropriate, including 11
the results of financial statement analysis and ratios, compete ncy of management or 12
change of ownership, actuarial opinions, reports of independent certified public 13
accountants, number and nature of consumer complaints, results of prior examinations, 14
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frequency of prior violations of statute and regulation, and cr iteria set out in the most 1
recent edition of the Financial Condition Examiners Handbook an d the Market 2
Regulation Handbook approved by the National Association of Ins urance 3
Commissioners and in effect when th e director conducts an examination. Examination 4
of an alien insurer may be limited to its insurance transactions and affairs in the United 5
States. Examination of a recipro cal insurer may also include ex amination of its 6
attorney-in-fact to the extent that the transactions of the att orney-in-fact relate to the 7
insurer. 8
* Sec. 2. AS 21.06.120(d) is amended to read: 9
( d ) T h e d i r e c t o r m a y e x a m i n e i n s u r e r s, third-party administrators, and 10
pharmacy benefits managers in participation with the National Association of 11
Insurance Commissioners. 12
* Sec. 3. AS 21.06.120 is amended by adding a new subsection to read: 13
(h) The director may examine a third-party administrator or pharmacy benefits 14
manager any time the director determines that an examination or investigation is 15
necessary. 16
* Sec. 4. AS 21.06.160(a) is amended to read: 17
(a) Each person examined, other than examinations under AS 21. 06.130 and 18
examinations of managing general agents, [THIRD-PARTY ADMINISTR ATORS,] 19
reinsurance intermediary managers, motor vehicle service contra ct providers, or 20
surplus lines brokers, shall pay a reasonable rate calculated o n salary, benefit costs, 21
and estimated division overhead for time spent directly or indi rectly related to the 22
examination. Each person examin ed, other than examinations unde r AS 21.06.130, 23
shall pay actual out-of-pocket business expenses, including tra vel expenses, incurred 24
by division staff examiners and shall pay the compensation of a contract examiner, to 25
be set at a reasonable customary rate, for conducting the exami nation upon 26
presentation of a detailed account of the charges and expenses by the director or under 27
an order of the director. The director may waive payment of all or part of the actual 28
out-of-pocket business expenses i ncurred by division staff exam iners, or the 29
compensation of a contract examiner, if the director determines that payment of the 30
expenses or compensation creates a financial hardship for a man aging general agent, 31
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third-party administrator, reinsurance intermediary manager, mo tor vehicle service 1
contract provider, or surplus lines broker. The accounting may either be presented 2
periodically during the course of the examination or at the ter mination of the 3
examination. A person may not pay and an examiner may not accep t additional 4
compensation for an examination. A person shall pay examination expenses to the 5
division under this subsection using an electronic payment meth od specified by the 6
director. 7
* Sec. 5. AS 21.27.010(a) is amended to read: 8
(a) Except as provided otherwise in this chapter, a person may not act as or 9
represent to be an insurance producer, managing general agent, reinsurance 10
intermediary broker, reinsurance intermediary manager, surplus lines broker, third-11
party administrator, pharmacy benefits manager, or independent adjuster in this 12
state or relative to a subject resident, located, or to be perf ormed in this state unless 13
licensed under this chapter. A person may not act as or represe nt to be a managing 14
general agent, reinsurance intermediary broker, third-party administrator, 15
pharmacy benefits manager, or reinsurance intermediary manager representing an 16
insurer domiciled in this state regarding a risk located outside this state unless licensed 17
by this state. 18
* Sec. 6. AS 21.27.010(c) is amended to read: 19
(c) A third-party administrator is not required to be licensed as a managing 20
general agent if the third-party administrator 21
(1) is licensed [REGISTERED] under this chapter [AS 21.27.630 - 22
21.27.660]; or 23
(2) only investigates and adjusts claims and is licensed under t h i s 24
chapter as an independent adjuster. 25
* Sec. 7. AS 21.27.010 is amended by adding a new subsection to read: 26
(l) In addition to the requirements under AS 21.27.010 - 21.27.460, a 27
(1) third-party administrator is subject to the licensing requ irements 28
under AS 21.27.630 - 21.27.660; and 29
(2) pharmacy benefits manager is subject to the licensing requ irements 30
under AS 21.27.901 - 21.27.955. 31
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* Sec. 8. AS 21.27.060(d) is amended to read: 1
(d) This section does not apply to an applicant 2
(1) for a limited license under AS 21.27.150(a)(1), (4), (5), or (8); 3
[OR] 4
(2) who, at any time within the one-year period immediately pr eceding 5
the date the current pending app lication is received by the div ision, had been licensed 6
in good standing in this state under a license requiring substa ntially similar 7
qualifications as required by the license applied for; or 8
(3) who is a compliance officer for a third-party administrato r or 9
pharmacy benefits manager. 10
* Sec. 9. AS 21.27.380(b) is amended to read: 11
(b) If a license is not renewed on or before the renewal date set by the director, 12
the license expires. A licensee may not act as or represent to be an insurance producer, 13
managing general agent, reinsurance intermediary broker, third-party administrator, 14
pharmacy benefits manager, reinsurance intermediary manager, surplus lines broker, 15
or independent adjuster during the time a license has expired. The director may 16
reinstate an expired license if the person continues to qualify for the license and pays 17
renewal license fees and a delayed renewal penalty. Reinstateme nt does not exempt a 18
person from a penalty provided by law for transacting business while unlicensed. A 19
license may not be renewed if it has expired for two years or longer. 20
* Sec. 10. AS 21.27.630(a) is amended to read: 21
(a) A person may not act as or represent to be a third-party a dministrator in 22
this state or relative to a subject resident, located, or to be performed in this state, 23
unless licensed [REGISTERED] under this chapter or in another jurisdiction unde r 24
AS 21.27.650. A person may not act as or represent to be a thir d-party administrator 25
representing an insurer domiciled in this state regarding a risk located outside this state 26
unless licensed [REGISTERED] by this state under the provisions of this chapter. 27
* Sec. 11. AS 21.27.630(b) is amended to read: 28
(b) A third-party administrator may not transact business for a kind or class of 29
authority for which the person is not licensed [REGISTERED]. 30
* Sec. 12. AS 21.27.630(c) is amended to read: 31
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( c ) E x c e p t a s o t h e r w i s e p r o v i d e d i n t h i s c h a p t e r , a t h i r d - p a r ty administrator 1
shall be licensed [REGISTERED] under this chapter [AS 21.27.630 - 21.27.660] 2
unless the third-party administrator only investigates and adjusts claims and is licensed 3
under this chapter as an independent adjuster. 4
* Sec. 13. AS 21.27.630(d) is amended to read: 5
(d) A third-party administrator may not use a fictitious name or alias unless 6
the licensee's legal name and fictitious name or alias are on t he license 7
[REGISTRATION]. 8
* Sec. 14. AS 21.27.630(e) is amended to read: 9
(e) A person who is an employee of an admitted insurer, who ac ts within the 10
course and scope of that employme nt, and within the scope of th e insurer's certificate 11
of authority is not required to be licensed [REGISTERED] under this chapter 12
[SECTION]. 13
* Sec. 15. AS 21.27.630(g) is amended to read: 14
(g) A credit union or a financial institution subject to super vision or 15
examination by federal or state banking authorities, or a mortg age lender, that 16
performs no functions other than advancing premiums to the insu rer and collecting a 17
debt from the insured is not required to be licensed [REGISTERED] as a third-party 18
administrator. 19
* Sec. 16. AS 21.27.630(h) is amended to read: 20
(h) A credit card issuing company that performs no functions, including 21
adjustment or settlement of claims, other than advancing and co llecting premiums 22
from its credit card holders who ha ve authorized collection is not required to be 23
licensed [REGISTERED] as a third-party administrator. 24
* Sec. 17. AS 21.27.630(i) is amended to read: 25
(i) A person who only provides services to bona fide employee benefit plans 26
that are established by an employer or an employee organization , or both, for which 27
the insurance laws of this state are preempted under the Employ ee Retirement Income 28
Security Act of 1974, is not required to be additionally licensed [REGISTERED] as a 29
third-party administrator if the person certifies to the direct or on or before February 1 30
of each year its exempt status. 31
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* Sec. 18. AS 21.27.630(j) is amended to read: 1
(j) A third-party administrator 2
[(1) SHALL APPLY FOR REGISTRATION UNDER THE 3
PROCEDURES OF AS 21.27.040; 4
(2) SHALL RENEW ITS REGISTRATION UNDER THE 5
PROCEDURES OF AS 21.27.380; AND 6
(3)] is subject to hearings and orders on violations; denial, nonrenewal, 7
suspension, or revocation of license [REGISTRATION]; penalties; and surrender of 8
license [REGISTRATION] under the procedures set out in AS 21.27.405 - 21.27.460. 9
* Sec. 19. AS 21.27.630(k) is amended to read: 10
(k) An insurer that holds a cer tificate of authority issued by the director and is 11
in good standing under this title is not required to be licensed [REGISTERED] as a 12
third-party administrator in this state. 13
* Sec. 20. AS 21.27.630(l) is amended to read: 14
(l) A person that is not required to be licensed [REGISTERED] as a third-15
party administrator under (e) - (k) of this section must file an annual [A] certification 16
with the director that the person meets the requirements for ex emption on or before 17
February 1 of each year. 18
* Sec. 21. AS 21.27.630(m) is amended to read: 19
(m) A person who is an employee of a third-party administrator and who acts 20
within the course and scope of that employment and within the s cope of the written 21
contract required under AS 21.27.650(a)(4) is not required to b e licensed 22
[REGISTERED] as a third-party administrator under this section unless that person 23
is the designated complia nce officer under AS 21.27.640(b)(6) . The third-party 24
administrator is responsible for the acts of its employees regulated under this title. 25
* Sec. 22. AS 21.27.640(a) is amended to read: 26
(a) The director may not issue or renew a license [REGISTRATION] except 27
in compliance with this chapter and may not issue a license [REGISTRATION] to a 28
person, or to be exercised by a person, found by the director t o be untrustworthy, 29
incompetent, financially irresponsible, or who has not established to the satisfaction of 30
the director that the person is qualified under this chapter. 31
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* Sec. 23. AS 21.27.640(b) is amended to read: 1
(b) To qualify for issuance or renewal of a license [REGISTRATION], an 2
applicant or licensee [REGISTRANT] shall comply with this title, regulations adopted 3
under AS 21.06.090, and 4
(1) be a trustworthy person; 5
(2) have active working experience in administrative functions that, in 6
the director's opinion, exhibits the ability to competently per form the administrative 7
functions of a third-party administrator; 8
(3) not have committed an act that is a cause for denial, nonr enewal, 9
suspension, or revocation of a registration or license in this state or another 10
jurisdiction; 11
(4) maintain a lawfully established place of business as descr ibed in 12
AS 21.27.330 in this state, unless licensed as a nonresident under AS 21.27.270; 13
(5) disclose to the director all owners, officers, directors, or partners, if 14
any; 15
(6) designate a compliance officer for the firm; 16
(7) provide in or with its application 17
(A) all basic organizational documents of the third-party 18
administrator, including article s of incorporation, articles of association, 19
partnership agreement, trade name certificate, trust agreement, shareholder 20
agreement, and other applicable documents and all endorsements to the 21
required documents; 22
(B) the bylaws, rules, regulations, or similar documents 23
regulating the internal affairs of the administrator; 24
(C) the names, mailing addresses, physical addresses, official 25
positions, and professional qualif ications of persons who are r esponsible for 26
the conduct of affairs of the third-party administrator, includ ing the members 27
of the board of directors, board of trustees, executive committ ee, or other 28
governing board or committee; the principal officers in the cas e of a 29
corporation, or the partners or m embers in the case of a partne rship, limited 30
liability company, limited liability partnership, or associatio n; shareholders 31
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holding directly or indirectly 10 percent or more of the voting securities of the 1
third-party administrator; and an y other person who exercises c ontrol or 2
influence over the affairs of the third-party administrator; 3
(D) certified financial statements for the preceding two years , 4
or for each year and partial year that the applicant has been i n business if less 5
than two years, prepared by an independent certified public acc ountant 6
establishing that the applicant is solvent, that the applicant' s system of 7
accounting, internal control, and procedure is operating effect ively to provide 8
reasonable assurance that money is promptly accounted for and p aid to the 9
person entitled to the money, and any other information that th e director may 10
require to review the current financial condition of the applicant; and 11
(E) a statement describing the business plan, including 12
information on staffing levels and activities proposed in this state and in other 13
jurisdictions and providing details establishing the third-part y administrator's 14
capability for providing a sufficient number of experienced and qualified 15
personnel in the areas of claims handling, underwriting, and record keeping; 16
(8) provide to the director documents necessary to verify the 17
statements contained in or in connection with the application; and 18
(9) notify the director, in writing, not later than 30 days after 19
(A) a change in compliance officer, residence, place of 20
business, mailing address, or phone number; 21
(B) the final disposition of an administrative action taken 22
against the licensee [REGISTRANT] by a governmental agency of another 23
state, by a governmental agency of another jurisdiction, or by a financial 24
industry regulatory authority sanction or arbitration proceedin g; in addition, a 25
licensee [REGISTRANT] shall submit to the director documents relating to the 26
final disposition on, including the final order and other relev ant legal 27
documents in, the action; or 28
(C) a conviction of a misdemeanor or felony of the third-party 29
administrator, its officers, directors, partners, owners, or employees. 30
* Sec. 24. AS 21.27.640(d) is amended to read: 31
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(d) If the director finds that the applicant or licensee [REGISTRANT] is 1
qualified and that application, license [REGISTRATION], or renewal fees have been 2
paid, the director may issue or renew the license [REGISTRATION]. 3
* Sec. 25. AS 21.27.650(a) is amended to read: 4
(a) An insurer may not transact business with a third-party ad ministrator 5
unless 6
(1) the insurer holds a certificate of authority in this state if required 7
under this title; 8
(2) the third-party administrator is licensed [REGISTERED] under 9
t h i s c h a p t e r [ O R T H E T H I R D - P A R T Y A D M I N I S T R A T O R H A S F I L E D A 10
CERTIFICATION WITH THE DIRECTOR CERTIFYING THAT THE THIRD-11
PARTY ADMINISTRATOR IS OPERATING ONLY FOR A FOREIGN INSURER 12
OTHER THAN A SELF-FUNDED MULTIPLE EMPLOYER WELFARE 13
ARRANGEMENT REGULATED UNDER AS 21.85 AND IS REGISTERED AS A 14
THIRD-PARTY ADMINISTRATOR BY THE THIRD-PARTY 15
ADMINISTRATOR'S RESIDENT INSURANCE REGULATOR IN A STATE 16
THAT THE DIRECTOR HAS DETERMINED HAS ENACTED PROVISIONS 17
SUBSTANTIALLY SIMILAR TO THOSE CONTAINED IN AS 21.27.630 - 18
21.27.650 AND THAT IS ACCREDITED BY THE NATIONAL ASSOCIATION OF 19
INSURANCE COMMISSIONERS]; 20
(3) the third-party administrat or provides the director on Jan uary 1, 21
April 1, July 1, and October 1 of each year 22
(A) a list of persons who supervise or have responsibility ove r 23
personnel performing administrative functions, including claims administration 24
and payment, marketing adminis trative functions, premium accoun ting, 25
premium billing, coverage verification, underwriting, or certificate issuance on 26
[UPON] a subject resident, located, or to be performed in this state; 27
(B) a list of current insurers under contract; and 28
(C) other information the director may require; 29
(4) a written contract is in effect between the parties that e stablishes 30
the responsibilities of each party, indicates both parties' sha re of responsibility for a 31
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particular function, and specifies the division of responsibilities; 1
(5) there is in effect a written contract between the insurer and third-2
party administrator that contains the following provisions: 3
(A) the insurer may terminate the contract for cause upon 4
written notice sent by certified mail to the third-party admini strator and may 5
suspend the underwriting authorit y of the third-party administr ator during a 6
dispute regarding the cause for t ermination; but the insurer mu st fulfill all 7
lawful obligations with respect to policies affected by the wri tten agreement, 8
regardless of any dispute between the insurer and the third-party administrator; 9
(B) the third-party administr ator shall render accounts to the 10
insurer detailing all transactions and remit all money due unde r the contract to 11
the insurer at least monthly; 12
(C) all money collected for the account of an insurer shall be 13
held by the third-party administrator as a fiduciary; 14
(D) all payments on behalf of the insurer shall be held by the 15
third-party administrator as a fiduciary; 16
(E) the third-party administrator may not retain more than thr ee 17
months' estimated claims payments and allocated loss adjustment expenses; 18
(F) the third-party administrator shall maintain separate reco rds 19
for each insurer in a form usable by the insurer; the insurer o r its authorized 20
representative shall have the rig ht to audit and the right to c opy all accounts 21
and records related to the insur er's business; the director, in addition to other 22
authority granted in this title, shall have access to all books, bank accounts, and 23
records of the third-party administrator in a form usable to th e director; any 24
trade secrets contained in books and records reviewed by the di rector, 25
including the identity and addr esses of policyholders and certi ficate holders, 26
shall be kept confidential, except that the director may use th e information in a 27
proceeding instituted against the third-party administrator or the insurer; 28
(G) the contract may not be assigned in whole or in part by th e 29
third-party administrator; 30
(H) if the contract permits the third-party administrator to d o 31
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underwriting, the contract must include the following: 1
(i) the third-party administrator's maximum annual 2
premium volume; 3
(ii) the rating system and basis of the rates to be 4
charged; 5
(iii) the types of risks that may be written; 6
(iv) maximum limits of liability; 7
(v) applicable exclusions; 8
(vi) territorial limitations; 9
(vii) policy cancellation provisions; 10
(viii) the maximum policy term; and 11
(ix) that the insurer shall have the right to cancel or not 12
renew a policy of insurance subject to applicable state law; 13
(I) if the contract permits the third-party administrator to 14
administer claims on behalf of the insurer, the contract must i nclude the 15
following: 16
(i) written settlement authority must be provided by the 17
insurer and may be terminated for cause upon the insurer's writ ten 18
notice sent by certified mail to the third-party administrator or upon the 19
termination of the contract, but the insurer may suspend the se ttlement 20
authority during a dispute regarding the cause of termination; 21
(ii) claims shall be reported to the insurer within 30 22
days; 23
(iii) a copy of the claim file shall be sent to the insurer 24
upon request or as soon as it beco mes known that the claim has the 25
potential to exceed an amount determined by the director or exceeds the 26
limit set by the insurer, whicheve r is less, involves a coverag e dispute, 27
may exceed the third-party administrator's claims settlement au thority, 28
is open for more than six mont hs, involves extra contractual 29
allegations, or is closed by payment in excess of an amount set by the 30
director or an amount set by the insurer, whichever is less; 31
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(iv) each party to the contract shall comply with unfair 1
claims settlement statutes and regulations; 2
(v) transmission of electronic data must occur at least 3
monthly if electronic claim files are in existence; and 4
(vi) claim files shall be the s ole property of the insurer; 5
upon an order of liquidation of the insurer, the third-party ad ministrator 6
shall have reasonable access to and the right to copy the files on a 7
timely basis; and 8
(J) the contract may not provide for commissions, fees, or 9
charges contingent upon savings obtained in the adjustment, set tlement, and 10
payment of losses covered by the insurer's obligations; but a t hird-party 11
administrator may receive performance-based compensation for pr oviding 12
hospital or other auditing services or may receive compensation b a s e d o n 13
premiums or charges collected or the number of claims paid or processed. 14
* Sec. 26. AS 21.27.650(q) is amended to read: 15
(q) The director may, without advance notice or hearing, immediately suspend 16
by order the license [REGISTRATION] of a third-party administrator if the director 17
finds that one or more of the following circumstances exist: 18
(1) the third-party administrator is insolvent or impaired; 19
(2) a proceeding for bankruptcy, receivership, conservatorship , or 20
rehabilitation, or another delinque ncy proceeding regarding the third-party 21
administrator has been commenced in any state or by a governmen tal agency of 22
another jurisdiction; 23
(3) the third-party administrator is in an unsound condition, or is in a 24
condition or using methods or pr actices that render its further transaction of insurance 25
injurious to policy holders or the public. 26
* Sec. 27. AS 21.27.901 is amended to read: 27
Sec. 21.27.901. Licensure [R EGISTRATION] of pharmacy benefits 28
managers; scope of business practice. (a) A person may not conduct business in the 29
state as a pharmacy benefits manager unless the person is licensed [REGISTERED] 30
with the director. 31
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(b) A pharmacy benefits manager licensed [REGISTERED] under this section 1
may 2
(1) contract with an insurer to administer or manage pharmacy benefits 3
provided by an insurer for a c overed person, including claims p rocessing services for 4
and audits of payments for prescription drugs and medical devices and supplies; and 5
(2) contract with network pharmacies. 6
(c) A pharmacy benefits manager 7
(1) shall apply for license [ R E G I S T R A T I O N ] f o l l o w i n g t h e s a m e 8
procedures for licensure set out in AS 21.27.040; 9
(2) is subject to hearings and orders on violations; denial, n onrenewal, 10
suspension, or revocation of license [REGISTRATION]; penalties; and surrender of 11
license [REGISTRATION] under the procedures set out in AS 21.27.405 - 21.27.460. 12
(d) Each day that a pharmacy benefits manager conducts busines s in the state 13
as a pharmacy benefits manager without being licensed [REGISTERED] is a separate 14
violation of this section, and e ach separate violation is subje ct to the maximum civil 15
penalty under AS 21.97.020. 16
* Sec. 28. AS 21.27 is amended by adding new sections to read: 17
Sec. 21.27.903. Pharmacy benefit manager qualifications. (a) An 18
application for a pharmacy benefits manager license must be in a form prescribed by 19
the director. 20
(b) The director may only issue or renew a license if the director is satisfied 21
that the applicant is a trustworthy person. The director may no t issue a license to an 22
applicant who has committed an act that is a cause for denial, nonrenewal, suspension, 23
or revocation of a registration or license in this state or another jurisdiction. 24
(c) An application must disclose 25
(1) information concerning the identity, professional history, 26
professional experience, and background history of all owners, officers, directors, or 27
partners; 28
(2) any administrative action ta ken against the owners, office rs, 29
directors, or partners by a gove rnmental agency of this or anot her jurisdiction and any 30
sanction imposed by a financial industry regulatory authority o r arbitration 31
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proceeding; 1
(3) any criminal prosecution in this state or another state or jurisdiction 2
of an owner, officer, director, or partner; the application mus t include the criminal 3
complaint, calendaring order, and other relevant legal documents. 4
(d) An application must designate a compliance officer for the p h a r m a c y 5
benefits manager and include the name, business address, teleph one number, 6
electronic mailing address, professional experience, and inform ation concerning the 7
background history of the officer. 8
(e) An application must include 9
(1) the required application fee; 10
(2) the organizational document s of the pharmacy benefits mana ger, 11
including articles of incorporation, articles of association, partnership agreement, trade 12
name certificate, trust agreement, shareholder agreement, and o ther applicable 13
documents, as well as the endorsements to the required documents; 14
(3) the name and address of the pharmacy benefits manager's ag ent for 15
service of process in the state; 16
(4) the bylaws, rules, regulations, or similar documents regul ating the 17
internal affairs of the pharmacy benefits manager; 18
(5) the name, electronic mailing address, physical address, of ficial 19
position, and professi onal qualifications of each person who is responsible for the 20
conduct of affairs of the pharmac y benefits manager, including the board of directors, 21
board of trustees, executive committee, or other governing boar d or committee; the 22
principal officers in the case of a corporation, or the partners or members in the case of 23
a partnership, limited liability company, limited liability par tnership, or association; 24
shareholders holding directly or indirectly 10 percent or more of the voting securities 25
of the pharmacy benefits manager; and any other person who exer cises control or 26
influence over the affairs of the pharmacy benefits manager; 27
(6) certified financial statements for the preceding two years , or for 28
each year and partial year that the applicant has been in business if less than two years, 29
prepared by an independent certified public accountant establis hing that the applicant 30
is solvent, that the applicant's system of accounting, internal control, and procedure is 31
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operating effectively to provide reasonable assurance that mone y is promptly 1
accounted for and paid to the person entitled to the money, and any other information 2
that the director may require to review the current financial condition of the applicant. 3
Sec. 21.27.904. Pharmacy benefit m anager required notifications . (a) A 4
licensed pharmacy benefit manage r shall notify the director in writing, not later than 5
30 days after 6
(1) a change in the information contained within the licensee's license, 7
place of business, electronic mailing address, physical mailing address, or telephone 8
number; 9
(2) a change in compliance officer, residence, place of busine ss, 10
mailing address, or telephone number; 11
(3) the final disposition of an administrative action taken ag ainst the 12
licensee by a governmental agenc y of another state, by a govern mental agency of 13
another jurisdiction, or by a fi nancial industry regulatory aut hority sanction or 14
arbitration proceeding; in add ition, a licensee shall submit to the director documents 15
relating to the final disposition on, including the final order and other relevant legal 16
documents in, the action; or 17
(4) a conviction of a misdemeanor or felony of the pharmacy be nefits 18
manager, its officers, designated compliance officer, directors, partners, or owners. 19
(b) Failure to provide the inf ormation required under this sec tion within 30 20
days is cause for denial, revocation, or suspension of license. 21
* Sec. 29. AS 21.27.905 is amended to read: 22
Sec. 21.27.905. Renewal of li cense [REGISTRATION]. (a) A pharmacy 23
benefits manager shall biennially renew a license [REGISTRATION] with the director 24
following the procedures for license renewal in AS 21.27.380. 25
(b) To renew a license [REGISTRATION] under this section, a pharmacy 26
benefits manager shall pay a renewal fee established by the director. The director shall 27
set the amount of the renewal fee to allow the renewal and over sight activities of the 28
division to be self-supporting. 29
* Sec. 30. AS 21.27.905 is amended by adding a new subsection to read: 30
(c) The fees required under (b) of this section must include f ees to cover the 31
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cost of 1
(1) salaries and benefits paid to the personnel of the divisio n engaged 2
in the enforcement of this chapter; 3
(2) reasonable technology costs r elated to the enforcement pro cess, 4
including the actual cost of soft ware and hardware used in the enforcement process 5
and the cost of training personnel in the proper use of the software or hardware; and 6
(3) reasonable education and trai ning costs incurred by the di vision to 7
maintain the proficiency and competence of the enforcing personnel. 8
* Sec. 31. AS 21.27.975(15) is amended to read: 9
(15) "pharmacy benefits manager" means a person that contracts with a 10
pharmacy on behalf of an insurer to process claims or pay pharm acies for prescription 11
drugs or medical devices and supplies or provide network management for pharmacies 12
regardless of ownership of the pharmacy benefits manager; 13
* Sec. 32. AS 21.36.520(a) is amended to read: 14
(a) An insurer providing a health care insurance policy or its pharmacy 15
benefits manager may not 16
(1) interfere with a covered person's right to choose a pharma cy or 17
provider; 18
( 2 ) i n t e r f e r e w i t h a c o v e r e d p e r s o n ' s r i g h t o f a c c e s s t o a c l inician-19
administered drug; 20
(3) interfere with the right of a pharmacy or pharmacist to pa rticipate 21
as a network pharmacy; 22
(4) reimburse a pharmacy or pharmacist an amount less than the 23
amount the pharmacy benefits man ager reimburses an affiliate fo r providing the same 24
pharmacy services, calculated on a per-unit basis using the sam e generic product 25
identifier or generic code number; 26
(5) impose a reduction in reim bursement for pharmacy services 27
because of the person's choice among pharmacies that have agreed to participate in the 28
plan according to the terms offered by the insurer or its pharmacy benefits manager; 29
(6) use a covered person's pharmacy services data collected un der the 30
provision of claims processing ser vices for the purpose of soli citing, marketing, or 31
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referring the person to an affiliate of the pharmacy benefits manager; 1
(7) prohibit or limit a pharmacy from mailing, shipping, or de livering 2
drugs to a patient as an ancillary service; however, the insurer or its pharmacy benefits 3
manager 4
( A ) i s n o t r e q u i r e d t o r e i m b u r s e a d e l i v e r y f e e c h a r g e d b y a 5
pharmacy unless the fee is specified in the contract between th e pharmacy 6
benefits manager and the pharmacy; 7
(B) may not require a patient signature as proof of delivery o f a 8
mailed or shipped drug if the pharmacy 9
(i) maintains a mailing or shipping log signed by a 10
representative of the pharmacy or keeps a record of each notifi cation of 11
delivery provided by the United St a t e s m a i l o r a p a c k a g e d e l i v ery 12
service; and 13
(ii) is responsible for the c ost of mailing, shipping, or 14
delivering a replacement for a drug that was ma iled or shipped but not 15
received by the covered person; 16
(8) prohibit or limit a networ k pharmacy from informing an ins ured 17
person of the difference between the out-of-pocket cost to the covered person to 18
purchase a drug, medical device, or supply using the covered pe rson's pharmacy 19
benefits and the pharmacy's usual and customary charge for the drug, medical device, 20
or supply; 21
(9) conduct or participate in spread pricing in the state; 22
(10) assess, charge, or collect a form of remuneration that pa sses from 23
a pharmacy or a pharmacist in a pharmacy network to the pharmac y benefits manager, 24
including claim processing fees, performance-based fees, networ k participation fees, 25
or accreditation fees; 26
(11) reverse and resubmit the cl aim of a pharmacy more than 90 days 27
after the date the claim was first adjudicated, and may not rev erse and resubmit the 28
claim of a pharmacy unless the insurer or pharmacy benefits manager 29
(A) provides prior written notification to the pharmacy; 30
(B) has just cause; 31
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(C) first attempts to reconcile the claim with the pharmacy; and 1
(D) provides to the pharmacy, at the time of the reversal and 2
resubmittal, a written description that includes details of and justification for 3
the reversal and resubmittal; 4
(12) prohibit or limit a pharmacy from collecting a fee from a 5
covered person for a service or product not covered by the cove red person's 6
health care insurance policy. 7
* Sec. 33. AS 21.27.630(f) is repealed. 8
* Sec. 34. This Act takes effect January 1, 2026. 9