Pharmacy Benefit Prompt Pay Act, Insurance Administrators and Managing General Agents; bring forward sections relating to.

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To: State Affairs
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representatives Waldo, Creekmore IV

HOUSE BILL NO. 1674

AN ACT TO BRING FORWARD SECTION 73-21-151 THROUGH 73-21-163, 1
MISSISSIPPI CODE OF 1972, WHICH ARE THE PHARMACY BENEFIT PROMPT 2
PAY ACT, FOR THE PURPOSE OF POSSIBLE AMENDMENT; TO BRING FORWARD 3
SECTIONS 83-18-1 THROUGH 83-18-29, MISSISSIPPI CODE OF 1972, WHICH 4
LICENSE INSURANCE ADMINISTRATORS, FOR THE PURPOSE OF POSSIBLE 5
AMENDMENT; TO BRING FORWARD SECTIONS 83-18-101 THROUGH 83-18-111, 6
MISSISSIPPI CODE OF 1972, WHICH ARE THE MANAGING GENERAL AGENTS 7
ACT, FOR THE PURPOSE OF POSSIBLE AMENDMENT; AND FOR RELATED 8
PURPOSES. 9
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 10
SECTION 1. Section 73-21-151, Mississippi Code of 1972, is 11
brought forward as follows: 12
73-21-151. Sections 73-21-151 through 73-21-163 shall be 13
known as the "Pharmacy Benefit Prompt Pay Act." 14
SECTION 2. Section 73-21-153, Mississippi Code of 1972, is 15
brought forward as follows: 16
73-21-153. For purposes of Sections 73-21-151 through 17
73-21-163, the following words and phrases shall have the meanings 18
ascribed herein unless the context clearly indicates otherwise: 19
(a) "Board" means the State Board of Pharmacy. 20
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(b) "Commissioner" means the Mississippi Commissioner 21
of Insurance. 22
(c) "Day" means a calendar day, unless otherwise 23
defined or limited. 24
(d) "Electronic claim" means the transmission of data 25
for purposes of payment of covered prescription drugs, other 26
products and supplies, and pharmacist services in an electronic 27
data format specified by a pharmacy benefit manager and approved 28
by the department. 29
(e) "Electronic adjudication" means the process of 30
electronically receiving, reviewing and accepting or rejecting an 31
electronic claim. 32
(f) "Enrollee" means an individual who has been 33
enrolled in a pharmacy benefit management plan. 34
(g) "Health insurance plan" means benefits consisting 35
of prescription drugs, other products and supplies, and pharmacist 36
services provided directly, through insurance or reimbursement, or 37
otherwise and including items and services paid for as 38
prescription drugs, other products and supplies, and pharmacist 39
services under any hospital or medical service policy or 40
certificate, hospital or medical service plan contract, preferred 41
provider organization agreement, or health maintenance 42
organization contract offered by a health insurance issuer. 43
(h) "Pharmacy benefit manager" shall have the same 44
definition as provided in Section 73-21-179. However, through 45
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June 30, 2014, the term "pharmacy benefit manager" shall not 46
include an insurance company that provides an integrated health 47
benefit plan and that does not separately contract for pharmacy 48
benefit management services. From and after July 1, 2014, the 49
term "pharmacy benefit manager" shall not include an insurance 50
company unless the insurance company is providing services as a 51
pharmacy benefit manager as defined in Section 73-21-179, in which 52
case the insurance company shall be subject to Sections 73-21-151 53
through 73-21-159 only for those pharmacy benefit manager 54
services. In addition, the term "pharmacy benefit manager" shall 55
not include the pharmacy benefit manager of the Mississippi State 56
and School Employees Health Insurance Plan or the Mississippi 57
Division of Medicaid or its contractors when performing pharmacy 58
benefit manager services for the Division of Medicaid. 59
(i) "Pharmacy benefit manager affiliate" means a 60
pharmacy or pharmacist that directly or indirectly, through one or 61
more intermediaries, owns or controls, is owned or controlled by, 62
or is under common ownership or control with a pharmacy benefit 63
manager. 64
(j) "Pharmacy benefit management plan" shall have the 65
same definition as provided in Section 73-21-179. 66
(k) "Pharmacist," "pharmacist services" and "pharmacy" 67
or "pharmacies" shall have the same definitions as provided in 68
Section 73-21-73. 69
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(l) "Uniform claim form" means a form prescribed by 70
rule by the State Board of Pharmacy; however, for purposes of 71
Sections 73-21-151 through 73-21-159, the board shall adopt the 72
same definition or rule where the State Department of Insurance 73
has adopted a rule covering the same type of claim. The board may 74
modify the terminology of the rule and form when necessary to 75
comply with the provisions of Sections 73-21-151 through 76
73-21-159. 77
(m) "Plan sponsors" means the employers, insurance 78
companies, unions and health maintenance organizations that 79
contract with a pharmacy benefit manager for delivery of 80
prescription services. 81
SECTION 3. Section 73-21-156, Mississippi Code of 1972, is 82
brought forward as follows: 83
73-21-156. (1) As used in this section, the following terms 84
shall be defined as provided in this subsection: 85
(a) "Maximum allowable cost list" means a listing of 86
drugs or other methodology used by a pharmacy benefit manager, 87
directly or indirectly, setting the maximum allowable payment to a 88
pharmacy or pharmacist for a generic drug, brand-name drug, 89
biologic product or other prescription drug. The term "maximum 90
allowable cost list" includes without limitation: 91
(i) Average acquisition cost, including national 92
average drug acquisition cost; 93
(ii) Average manufacturer price; 94
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(iii) Average wholesale price; 95
(iv) Brand effective rate or generic effective 96
rate; 97
(v) Discount indexing; 98
(vi) Federal upper limits; 99
(vii) Wholesale acquisition cost; and 100
(viii) Any other term that a pharmacy benefit 101
manager or a health care insurer may use to establish 102
reimbursement rates to a pharmacist or pharmacy for pharmacist 103
services. 104
(b) "Pharmacy acquisition cost" means the amount that a 105
pharmaceutical wholesaler charges for a pharmaceutical product as 106
listed on the pharmacy's billing invoice. 107
(2) Before a pharmacy benefit manager places or continues a 108
particular drug on a maximum allowable cost list, the drug: 109
(a) If the drug is a generic equivalent drug product as 110
defined in 73-21-73, shall be listed as therapeutically equivalent 111
and pharmaceutically equivalent "A" or "B" rated in the United 112
States Food and Drug Administration's most recent version of the 113
"Orange Book" or "Green Book" or have an NR or NA rating by 114
Medi-Span, Gold Standard, or a similar rating by a nationally 115
recognized reference approved by the board; 116
(b) Shall be available for purchase by each pharmacy in 117
the state from national or regional wholesalers operating in 118
Mississippi; and 119
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(c) Shall not be obsolete. 120
(3) A pharmacy benefit manager shall: 121
(a) Provide access to its maximum allowable cost list 122
to each pharmacy subject to the maximum allowable cost list; 123
(b) Update its maximum allowable cost list on a timely 124
basis, but in no event longer than three (3) calendar days; and 125
(c) Provide a process for each pharmacy subject to the 126
maximum allowable cost list to receive prompt notification of an 127
update to the maximum allowable cost list. 128
(4) A pharmacy benefit manager shall: 129
(a) Provide a reasonable administrative appeal 130
procedure to allow pharmacies to challenge a maximum allowable 131
cost list and reimbursements made under a maximum allowable cost 132
list for a specific drug or drugs as: 133
(i) Not meeting the requirements of this section; 134
or 135
(ii) Being below the pharmacy acquisition cost. 136
(b) The reasonable administrative appeal procedure 137
shall include the following: 138
(i) A dedicated telephone number, email address 139
and website for the purpose of submitting administrative appeals; 140
(ii) The ability to submit an administrative 141
appeal directly to the pharmacy benefit manager regarding the 142
pharmacy benefit management plan or through a pharmacy service 143
administrative organization; and 144
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(iii) A period of less than thirty (30) business 145
days to file an administrative appeal. 146
(c) The pharmacy benefit manager shall respond to the 147
challenge under paragraph (a) of this subsection (4) within thirty 148
(30) business days after receipt of the challenge. 149
(d) If a challenge is made under paragraph (a) of this 150
subsection (4), the pharmacy benefit manager shall within thirty 151
(30) business days after receipt of the challenge either: 152
(i) If the appeal is upheld: 153
1. Make the change in the maximum allowable 154
cost list payment to at least the pharmacy acquisition cost; 155
2. Permit the challenging pharmacy or 156
pharmacist to reverse and rebill the claim in question; 157
3. Provide the National Drug Code that the 158
increase or change is based on to the pharmacy or pharmacist; and 159
4. Make the change under item 1 of this 160
subparagraph (i) effective for each similarly situated pharmacy as 161
defined by the payor subject to the maximum allowable cost list; 162
or 163
(ii) If the appeal is denied, provide the 164
challenging pharmacy or pharmacist the National Drug Code and the 165
name of the national or regional pharmaceutical wholesalers 166
operating in Mississippi that have the drug currently in stock at 167
a price below the maximum allowable cost as listed on the maximum 168
allowable cost list; or 169
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(iii) If the National Drug Code provided by the 170
pharmacy benefit manager is not available below the pharmacy 171
acquisition cost from the pharmaceutical wholesaler from whom the 172
pharmacy or pharmacist purchases the majority of prescription 173
drugs for resale, then the pharmacy benefit manager shall adjust 174
the maximum allowable cost as listed on the maximum allowable cost 175
list above the challenging pharmacy's pharmacy acquisition cost 176
and permit the pharmacy to reverse and rebill each claim affected 177
by the inability to procure the drug at a cost that is equal to or 178
less than the previously challenged maximum allowable cost. 179
(5) (a) A pharmacy benefit manager shall not reimburse a 180
pharmacy or pharmacist in the state an amount less than the amount 181
that the pharmacy benefit manager reimburses a pharmacy benefit 182
manager affiliate for providing the same pharmacist services. 183
(b) The amount shall be calculated on a per unit basis 184
based on the same brand and generic product identifier or brand 185
and generic code number. 186
SECTION 4. Section 73-21-157, Mississippi Code of 1972, is 187
brought forward as follows: 188
73-21-157. (1) Before beginning to do business as a 189
pharmacy benefit manager, a pharmacy benefit manager shall obtain 190
a license to do business from the board. To obtain a license, the 191
applicant shall submit an application to the board on a form to be 192
prescribed by the board. 193
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(2) Each pharmacy benefit manager providing pharmacy 194
management benefit plans in this state shall file a statement with 195
the board annually by March 1 or within sixty (60) days of the end 196
of its fiscal year if not a calendar year. The statement shall be 197
verified by at least two (2) principal officers and shall cover 198
the preceding calendar year or the immediately preceding fiscal 199
year of the pharmacy benefit manager. 200
(3) The statement shall be on forms prescribed by the board 201
and shall include: 202
(a) A financial statement of the organization, 203
including its balance sheet and income statement for the preceding 204
year; and 205
(b) Any other information relating to the operations of 206
the pharmacy benefit manager required by the board under this 207
section. 208
(4) (a) Any information required to be submitted to the 209
board pursuant to licensure application that is considered 210
proprietary by a pharmacy benefit manager shall be marked as 211
confidential when submitted to the board. All such information 212
shall not be subject to the provisions of the federal Freedom of 213
Information Act or the Mississippi Public Records Act and shall 214
not be released by the board unless subject to an order from a 215
court of competent jurisdiction. The board shall destroy or 216
delete or cause to be destroyed or deleted all such information 217
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thirty (30) days after the board determines that the information 218
is no longer necessary or useful. 219
(b) Any person who knowingly releases, causes to be 220
released or assists in the release of any such information shall 221
be subject to a monetary penalty imposed by the board in an amount 222
not exceeding Fifty Thousand Dollars ($50,000.00) per violation. 223
When the board is considering the imposition of any penalty under 224
this paragraph (b), it shall follow the same policies and 225
procedures provided for the imposition of other sanctions in the 226
Pharmacy Practice Act. Any penalty collected under this paragraph 227
(b) shall be deposited into the special fund of the board and used 228
to support the operations of the board relating to the regulation 229
of pharmacy benefit managers. 230
(c) All employees of the board who have access to the 231
information described in paragraph (a) of this subsection shall be 232
fingerprinted, and the board shall submit a set of fingerprints 233
for each employee to the Department of Public Safety for the 234
purpose of conducting a criminal history records check. If no 235
disqualifying record is identified at the state level, the 236
Department of Public Safety shall forward the fingerprints to the 237
Federal Bureau of Investigation for a national criminal history 238
records check. 239
(5) If the pharmacy benefit manager is audited annually by 240
an independent certified public accountant, a copy of the 241
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certified audit report shall be filed annually with the board by 242
June 30 or within thirty (30) days of the report being final. 243
(6) The board may extend the time prescribed for any 244
pharmacy benefit manager for filing annual statements or other 245
reports or exhibits of any kind for good cause shown. However, 246
the board shall not extend the time for filing annual statements 247
beyond sixty (60) days after the time prescribed by subsection (1) 248
of this section. The board may waive the requirements for filing 249
financial information for the pharmacy benefit manager if an 250
affiliate of the pharmacy benefit manager is already required to 251
file such information under current law with the Commissioner of 252
Insurance and allow the pharmacy benefit manager to file a copy of 253
documents containing such information with the board in lieu of 254
the statement required by this section. 255
(7) The expense of administering this section shall be 256
assessed annually by the board against all pharmacy benefit 257
managers operating in this state. 258
(8) A pharmacy benefit manager or third-party payor may not 259
require pharmacy accreditation standards or recertification 260
requirements inconsistent with, more stringent than, or in 261
addition to federal and state requirements for licensure as a 262
pharmacy in this state. 263
SECTION 5. Section 73-21-159, Mississippi Code of 1972, is 264
brought forward as follows: 265
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73-21-159. (1) In lieu of or in addition to making its own 266
financial examination of a pharmacy benefit manager, the board may 267
accept the report of a financial examination of other persons 268
responsible for the pharmacy benefit manager under the laws of 269
another state certified by the applicable official of such other 270
state. 271
(2) The board shall coordinate financial examinations of a 272
pharmacy benefit manager that provides pharmacy management benefit 273
plans in this state to ensure an appropriate level of regulatory 274
oversight and to avoid any undue duplication of effort or 275
regulation. The pharmacy benefit manager being examined shall pay 276
the cost of the examination. The cost of the examination shall be 277
deposited in a special fund that shall provide all expenses for 278
the licensing, supervision and examination of all pharmacy benefit 279
managers subject to regulation under Sections 73-21-71 through 280
73-21-129 and Sections 73-21-151 through 73-21-163. 281
(3) The board may provide a copy of the financial 282
examination to the person or entity who provides or operates the 283
health insurance plan or to a pharmacist or pharmacy. 284
(4) The board is authorized to hire independent financial 285
consultants to conduct financial examinations of a pharmacy 286
benefit manager and to expend funds collected under this section 287
to pay the costs of such examinations. 288
SECTION 6. Section 73-21-161, Mississippi Code of 1972, is 289
brought forward as follows: 290
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73-21-161. (1) As used in this section, the term "referral" 291
means: 292
(a) Ordering of a patient to a pharmacy by a pharmacy 293
benefit manager affiliate either orally or in writing, including 294
online messaging; 295
(b) Offering or implementing plan designs that require 296
patients to use affiliated pharmacies; or 297
(c) Patient or prospective patient specific 298
advertising, marketing, or promotion of a pharmacy by an 299
affiliate. 300
The term "referral" does not include a pharmacy's inclusion 301
by a pharmacy benefit manager affiliate in communications to 302
patients, including patient and prospective patient specific 303
communications, regarding network pharmacies and prices, provided 304
that the affiliate includes information regarding eligible 305
nonaffiliate pharmacies in those communications and the 306
information provided is accurate. 307
(2) A pharmacy, pharmacy benefit manager, or pharmacy 308
benefit manager affiliate licensed or operating in Mississippi 309
shall be prohibited from: 310
(a) Making referrals; 311
(b) Transferring or sharing records relative to 312
prescription information containing patient identifiable and 313
prescriber identifiable data to or from a pharmacy benefit manager 314
affiliate for any commercial purpose; however, nothing in this 315
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section shall be construed to prohibit the exchange of 316
prescription information between a pharmacy and its affiliate for 317
the limited purposes of pharmacy reimbursement; formulary 318
compliance; pharmacy care; public health activities otherwise 319
authorized by law; or utilization review by a health care 320
provider; or 321
(c) Presenting a claim for payment to any individual, 322
third-party payor, affiliate, or other entity for a service 323
furnished pursuant to a referral from an affiliate. 324
(3) This section shall not be construed to prohibit a 325
pharmacy from entering into an agreement with a pharmacy benefit 326
manager affiliate to provide pharmacy care to patients, provided 327
that the pharmacy does not receive referrals in violation of 328
subsection (2) of this section and the pharmacy provides the 329
disclosures required in subsection (1) of this section. 330
(4) If a pharmacy licensed or holding a nonresident pharmacy 331
permit in this state has an affiliate, it shall annually file with 332
the board a disclosure statement identifying all such affiliates. 333
(5) In addition to any other remedy provided by law, a 334
violation of this section by a pharmacy shall be grounds for 335
disciplinary action by the board under its authority granted in 336
this chapter. 337
(6) A pharmacist who fills a prescription that violates 338
subsection (2) of this section shall not be liable under this 339
section. 340
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SECTION 7. Section 73-21-163, Mississippi Code of 1972, is 341
brought forward as follows: 342
73-21-163. (1) Whenever the board has reason to believe 343
that a pharmacy benefit manager or pharmacy benefit manager 344
affiliate is using, has used, or is about to use any method, act 345
or practice prohibited in Sections 73-21-151 through 73-21-163 and 346
that proceedings would be in the public interest, it may bring an 347
action in the name of the board against the pharmacy benefit 348
manager or pharmacy benefit manager affiliate to restrain by 349
temporary or permanent injunction the use of such method, act or 350
practice. The action shall be brought in the Chancery Court of 351
the First Judicial District of Hinds County, Mississippi. The 352
court is authorized to issue temporary or permanent injunctions to 353
restrain and prevent violations of Sections 73-21-151 through 354
73-21-163 and such injunctions shall be issued without bond. 355
(2) The board may impose a monetary penalty on a pharmacy 356
benefit manager or a pharmacy benefit manager affiliate for 357
noncompliance with the provisions of the Sections 73-21-151 358
through 73-21-163, in amounts of not less than One Thousand 359
Dollars ($1,000.00) per violation and not more than Twenty-five 360
Thousand Dollars ($25,000.00) per violation. Each day a violation 361
continues for the same brand or generic product identifier or 362
brand or generic code number is a separate violation. The board 363
shall prepare a record entered upon its minutes that states the 364
basic facts upon which the monetary penalty was imposed. Any 365
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penalty collected under this subsection (2) shall be deposited 366
into the special fund of the board. 367
(3) The board may assess a monetary penalty for those 368
reasonable costs that are expended by the board in the 369
investigation and conduct of a proceeding if the board imposes a 370
monetary penalty under subsection (2) of this section. A monetary 371
penalty assessed and levied under this section shall be paid to 372
the board by the licensee, registrant or permit holder upon the 373
expiration of the period allowed for appeal of those penalties 374
under Section 73-21-101, or may be paid sooner if the licensee, 375
registrant or permit holder elects. Any penalty collected by the 376
board under this subsection (3) shall be deposited into the 377
special fund of the board. 378
(4) When payment of a monetary penalty assessed and levied 379
by the board against a licensee, registrant or permit holder in 380
accordance with this section is not paid by the licensee, 381
registrant or permit holder when due under this section, the board 382
shall have the power to institute and maintain proceedings in its 383
name for enforcement of payment in the chancery court of the 384
county and judicial district of residence of the licensee, 385
registrant or permit holder, or if the licensee, registrant or 386
permit holder is a nonresident of the State of Mississippi, in the 387
Chancery Court of the First Judicial District of Hinds County, 388
Mississippi. When those proceedings are instituted, the board 389
shall certify the record of its proceedings, together with all 390
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documents and evidence, to the chancery court and the matter shall 391
be heard in due course by the court, which shall review the record 392
and make its determination thereon in accordance with the 393
provisions of Section 73-21-101. The hearing on the matter may, 394
in the discretion of the chancellor, be tried in vacation. 395
(5) The board shall develop and implement a uniform penalty 396
policy that sets the minimum and maximum penalty for any given 397
violation of Sections 73-21-151 through 73-21-163. The board 398
shall adhere to its uniform penalty policy except in those cases 399
where the board specifically finds, by majority vote, that a 400
penalty in excess of, or less than, the uniform penalty is 401
appropriate. That vote shall be reflected in the minutes of the 402
board and shall not be imposed unless it appears as having been 403
adopted by the board. 404
SECTION 8. Section 83-18-1, Mississippi Code of 1972, is 405
brought forward as follows: 406
83-18-1. As used in this chapter unless the context 407
otherwise requires: 408
(a) "Administrator" or "third-party administrator" or 409
"TPA" means a person who directly or indirectly solicits or 410
effects coverage of, underwrites, collects charges or premiums 411
from, or adjusts or settles claims on residents of this state, or 412
residents of another state from offices in this state, in 413
connection with life or health insurance coverage or annuities, 414
except any of the following: 415
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(i) An employer on behalf of its employees or the 416
employees of one or more subsidiaries or affiliated corporations 417
of such employer; 418
(ii) A union on behalf of its members; 419
(iii) An insurer which is authorized to transact 420
insurance in this state with respect to a policy lawfully issued 421
and delivered in and pursuant to the laws of this state or another 422
state; 423
(iv) An agent or broker licensed to sell life or 424
health insurance in this state, whose activities are limited 425
exclusively to the sale of insurance; 426
(v) A creditor on behalf of its debtors with 427
respect to insurance covering a debt between the creditor and its 428
debtors; 429
(vi) A trust and its trustees, agents and 430
employees acting pursuant to such trust established in conformity 431
with 29 USC Section 186; 432
(vii) A trust exempt from taxation under Section 433
501(a) of the Internal Revenue Code, its trustees and employees 434
acting pursuant to such trust, or a custodian and the custodian's 435
agents or employees acting pursuant to a custodian account which 436
meets the requirements of Section 401(f) of the Internal Revenue 437
Code; 438
(viii) A credit union or a financial institution 439
which is subject to supervision or examination by federal or state 440
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banking authorities, or a mortgage lender, to the extent they 441
collect and remit premiums to licensed insurance agents or 442
authorized insurers in connection with loan payments; 443
(ix) A credit card issuing company which advances 444
for and collects premiums or charges from its credit card holders 445
who have authorized collection if the company does not adjust or 446
settle claims; 447
(x) A person who adjusts or settles claims in the 448
normal course of that person's practice or employment as an 449
attorney at law and who does not collect charges or premiums in 450
connection with life or health insurance coverage or annuities; 451
(xi) An adjuster licensed by this state whose 452
activities are limited to adjustment of claims; 453
(xii) A person who acts solely as an administrator 454
of one or more bona fide employee benefit plans established by an 455
employer or an employee organization; or 456
(xiii) A person licensed as a managing general 457
agent in this state, whose activities are limited exclusively to 458
the scope of activities conveyed under such license. 459
(b) "Affiliate" or "affiliated" means any entity or 460
person who directly or indirectly, through one or more 461
intermediaries, controls or is controlled by, or is under common 462
control with, a specified entity or person. 463
(c) "Commissioner" means the Commissioner of Insurance. 464
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(d) "Insurance" or "insurance coverage" means any 465
coverage offered or provided by an insurer. 466
(e) "Insurer" means any person undertaking to provide 467
life or health insurance coverage in this state. For the purposes 468
of this chapter, insurer includes a licensed insurance company, a 469
prepaid hospital or medical care plan, a health maintenance 470
organization, a multiple employer welfare arrangement, or any 471
other person providing a plan of insurance subject to state 472
insurance regulation. Insurer does not include a bona fide 473
employee benefit plan established by an employer or an employee 474
organization, or both, for which the insurance laws of this state 475
are preempted pursuant to the Employee Retirement Income Security 476
Act of 1974. 477
(f) "Underwrites" or "underwriting" means, but is not 478
limited to, the acceptance of employer or individual applications 479
for coverage of individuals in accordance with the written rules 480
of the insurer; the overall planning and coordinating of an 481
insurance program; and the ability to procure bonds and excess 482
insurance. 483
SECTION 9. Section 83-18-3, Mississippi Code of 1972, is 484
brought forward as follows: 485
83-18-3. (1) No person shall act as or hold himself out to 486
be an administrator in this state, other than an adjuster licensed 487
in this state for the kinds of business for which he is acting as 488
an adjuster, unless he shall hold a license as an administrator 489
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issued by the Mississippi Commissioner of Insurance. Failure to 490
hold such a license shall subject the administrator to a fine of 491
not less than One Hundred Dollars ($100.00) nor more than Five 492
Hundred Dollars ($500.00). Such license shall be issued by the 493
commissioner to an administrator unless the commissioner, after 494
due notice and hearing, shall have determined that the 495
administrator is not competent, trustworthy, financially 496
responsible or of good personal and business reputation or has had 497
a previous application for an insurance license denied for cause 498
within five (5) years. 499
(2) All applications shall be accompanied by a fee of Two 500
Hundred Dollars ($200.00). The license is renewable annually on 501
the date of issue. A request for renewal must be accompanied by a 502
renewal fee of One Hundred Dollars ($100.00). Prior to the 503
issuance or renewal of the license of any administrator, a 504
fidelity bond in a form and amount as determined by the 505
commissioner shall be obtained by the licensee. 506
(3) After notice and hearing, the commissioner may revoke a 507
license or fine an administrator not more than Five Hundred 508
Dollars ($500.00), or both, or the commissioner may suspend such 509
license or fine such administrator not more than Five Hundred 510
Dollars ($500.00), or both, upon finding that either the 511
administrator violated any of the requirements of this chapter or 512
the administrator is not competent, trustworthy, financially 513
responsible or of good personal and business reputation. 514
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(4) The Commissioner of Insurance may promulgate rules and 515
regulations which are necessary to accomplish the purposes of this 516
chapter. 517
(5) In addition to the reasons specified in this section, 518
the commissioner shall be authorized to suspend the license of any 519
licensee for being out of compliance with an order for support, as 520
defined in Section 93-11-153. The procedure for suspension of a 521
license for being out of compliance with an order for support, and 522
the procedure for the reissuance or reinstatement of a license 523
suspended for that purpose, and the payment of any fees for the 524
reissuance or reinstatement of a license suspended for that 525
purpose, shall be governed by Section 93-11-157 or 93-11-163, as 526
the case may be. Actions taken by the board in suspending a 527
license when required by Section 93-11-157 or 93-11-163 are not 528
actions from which an appeal may be taken under this section. Any 529
appeal of a license suspension that is required by Section 530
93-11-157 or 93-11-163 shall be taken in accordance with the 531
appeal procedure specified in Section 93-11-157 or 93-11-163, as 532
the case may be, rather than the procedure specified in this 533
section. If there is any conflict between any provision of 534
Section 93-11-157 or 93-11-163 and any provision of this chapter, 535
the provisions of Section 93-11-157 or 93-11-163, as the case may 536
be, shall control. 537
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(6) Each application or filing made under this section shall 538
include the Social Security number(s) of the applicant in 539
accordance with Section 93-11-64, Mississippi Code of 1972. 540
SECTION 10. Section 83-18-5, Mississippi Code of 1972, is 541
brought forward as follows: 542
83-18-5. (1) No administrator shall act as such without a 543
written agreement between the administrator and the insurer or 544
employer, and such written agreement shall be retained as part of 545
the official records of both the insurer or employer and the 546
administrator for the duration of the agreement and for five (5) 547
years thereafter. The agreement shall contain all provisions 548
required by this statute, except insofar as those requirements do 549
not apply to the functions performed by the administrator. 550
(2) The written agreement shall include a statement of 551
duties which the administrator is expected to perform on behalf of 552
the insurer or employer and the lines, classes or types of 553
insurance for which the administrator is to be authorized to 554
administer. The agreement shall make provision with respect to 555
underwriting or other standards pertaining to the business 556
underwritten by such insurer. 557
(3) The insurer, employer or administrator may, with written 558
notice, terminate the written agreement for cause as provided in 559
the agreement. The insurer may suspend the underwriting authority 560
of the administrator during the pendency of any dispute regarding 561
the cause for termination of the written agreement. The insurer 562
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must fulfill any lawful obligations with respect to policies 563
affected by the written agreement, regardless of any dispute 564
between the insurer and the administrator. 565
SECTION 11. Section 83-18-7, Mississippi Code of 1972, is 566
brought forward as follows: 567
83-18-7. If an insurer utilizes the services of an 568
administrator, the payment to the administrator of any premiums or 569
charges for insurance by or on behalf of the insured party shall 570
be deemed to have been received by the insurer, and the payment of 571
return premiums or claim payments forwarded by the insurer to the 572
administrator shall not be deemed to have been paid to the insured 573
party or claimant until such payments are received by the insured 574
party or claimant. Nothing in this section limits any right of the 575
insurer against the administrator resulting from the failure of 576
the administrator to make payments to the insurer, insured parties 577
or claimants. 578
SECTION 12. Section 83-18-9, Mississippi Code of 1972, is 579
brought forward as follows: 580
83-18-9. (1) Every administrator shall maintain and make 581
available to the insurer or employer complete books and records of 582
all transactions performed on behalf of the insurer or employer. 583
The books and records shall be maintained in accordance with 584
prudent standards of insurance record keeping and must be 585
maintained for a period of not less than five (5) years from the 586
date of their creation. 587
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(2) The commissioner shall have access to books and records 588
maintained by an administrator for the purposes of examination, 589
audit and inspection. Any trade secrets contained in such books 590
and records, including the identity and addresses of policyholders 591
and certificate holders, shall be kept confidential, except that 592
the commissioner may use such information in any proceeding 593
instituted against the administrator. 594
(3) The insurer or employer shall own the records generated 595
by the administrator pertaining to the insurer; however, the 596
administrator shall retain the right to continuing access to books 597
and records to permit the administrator to fulfill all of its 598
contractual obligations to insured parties, claimants, and the 599
insurer. 600
(4) In the event the insurer or employer and the 601
administrator cancel their agreement, notwithstanding the 602
provisions of subsection (1) of this section, the administrator 603
may, by written agreement with the insurer or employer, transfer 604
all records to a new administrator rather than retain them for 605
five (5) years. In such cases, the new administrator shall 606
acknowledge, in writing, that it is responsible for retaining the 607
records of the prior administrator as required in subsection (1) 608
of this section. 609
SECTION 13. Section 83-18-11, Mississippi Code of 1972, is 610
brought forward as follows: 611
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83-18-11. An administrator may use only such advertising 612
pertaining to the business underwritten by an insurer as has been 613
approved in writing by the insurer in advance of its use. 614
SECTION 14. Section 83-18-13, Mississippi Code of 1972, is 615
brought forward as follows: 616
83-18-13. (1) If an insurer utilizes the services of an 617
administrator, the insurer shall be responsible for determining 618
the benefits, premium rates, underwriting criteria and claims 619
payment procedures applicable to such coverage and for securing 620
reinsurance, if any. The rules pertaining to these matters must be 621
provided, in writing, by the insurer to the administrator. The 622
responsibilities of the administrator as to any of these matters 623
shall be set forth in the written agreement between the 624
administrator and the insurer. 625
(2) It is the sole responsibility of the insurer or employer 626
to provide for competent administration of its programs. 627
(3) In cases where an administrator benefits for more than 628
one hundred (100) certificate holders on behalf of an insurer, the 629
insurer shall, at least semiannually, conduct a review of the 630
operations of the administrator. At least one (1) such review 631
shall be an on-site audit of the operations of the administrator. 632
SECTION 15. Section 83-18-15, Mississippi Code of 1972, is 633
brought forward as follows: 634
83-18-15. (1) All insurance charges or premiums collected 635
by an administrator on behalf of or for an insurer or insurers, 636
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and the return of premiums received from that insurer or insurers, 637
shall be held by the administrator in a fiduciary capacity. Such 638
funds shall be immediately remitted to the person or persons 639
entitled to them or shall be deposited promptly in a fiduciary 640
account established and maintained by the administrator in a 641
federally insured financial institution. The written agreement 642
between the administrator and the insurer shall provide for the 643
administrator to periodically render an accounting to the insurer 644
detailing all transactions performed by the administrator 645
pertaining to the business underwritten by the insurer. 646
(2) If charges or premiums deposited in a fiduciary account 647
have been collected on behalf of or for one or more insurers, the 648
administrator shall keep records clearly recording the deposits in 649
and withdrawals from the account on behalf of each insurer. The 650
administrator shall keep copies of all the records, and upon 651
request of an insurer, shall furnish the insurer with copies of 652
the records pertaining to such deposits and withdrawals. 653
(3) The administrator shall not pay any claim by withdrawals 654
from a fiduciary account in which premiums or charges are 655
deposited. Withdrawals from such account shall be made as provided 656
in the written agreement between the administrator and the 657
insurer. The written agreement shall address, but not be limited 658
to, the following: 659
(a) Remittance to an insurer entitled to remittance; 660
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(b) Deposit in an account maintained in the name of the 661
insurer; 662
(c) Transfer to and deposit in a claims-paying account, 663
with claims to be paid as provided in subsection (4); 664
(d) Payment to a group policyholder for remittance to 665
the insurer entitled to such remittance; 666
(e) Payment to the administrator of its commissions, 667
fees or charges; and 668
(f) Remittance of return premium to the person or 669
persons entitled to such return premium. 670
(4) All claims paid by the administrator from funds 671
collected on behalf of or for an insurer shall be paid only on 672
drafts or checks of and as authorized by the insurer. 673
SECTION 16. Section 83-18-17, Mississippi Code of 1972, is 674
brought forward as follows: 675
83-18-17. (1) An administrator shall not enter into any 676
agreement or understanding with an insurer in which the effect is 677
to make the amount of the administrator's commissions, fees or 678
charges contingent upon savings effected in the adjustment, 679
settlement and payment of losses covered by the insurer's 680
obligations. This provision shall not prohibit an administrator 681
from receiving performance-based compensation for providing 682
hospital or other auditing services. 683
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(2) This section shall not prevent the compensation of an 684
administrator from being based on premiums or charges collected or 685
the number of claims paid or processed. 686
SECTION 17. Section 83-18-19, Mississippi Code of 1972, is 687
brought forward as follows: 688
83-18-19. (1) When the services of an administrator are 689
utilized, the administrator shall provide a written notice 690
approved by the insurer to covered individuals advising them of 691
the identity of, and relationship among, the administrator, the 692
policyholder and the insurer. 693
(2) When an administrator collects funds, the reason for 694
collection of each item must be identified to the insured party 695
and each item must be shown separately from any premium. 696
Additional charges may not be made for services to the extent the 697
services have been paid for by the insurer. 698
(3) The administrator shall disclose to the insurer or 699
employer all charges, fees and commissions received from all 700
services in connection with the provision of administrative 701
services for the insurer, including any fees or commissions paid 702
by insurers providing reinsurance. 703
SECTION 18. Section 83-18-21, Mississippi Code of 1972, is 704
brought forward as follows: 705
83-18-21. Any policies, certificates, booklets, termination 706
notices or other written communications delivered by the insurer 707
to the administrator for delivery to insured parties or covered 708
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individuals shall be delivered by the administrator promptly after 709
receipt of instructions from the insurer to deliver them. 710
SECTION 19. Section 83-18-23, Mississippi Code of 1972, is 711
brought forward as follows: 712
83-18-23. (1) No person shall act as, or offer to act as, 713
or hold himself out to be an administrator in this state without a 714
valid certificate of authority as an administrator issued by the 715
commissioner. 716
(2) Applicants to be an administrator shall make an 717
application to the commissioner upon a form to be furnished by the 718
commissioner. The application shall include or be accompanied by 719
the following information and documents: 720
(a) All basic organizational documents of the 721
administrator, including any articles of incorporation, articles 722
of association, partnership agreement, trade name certificate, 723
trust agreement, shareholder agreement and other applicable 724
documents and all amendments to such documents; 725
(b) The bylaws, rules, regulations or similar documents 726
regulating the internal affairs of the administrator; 727
(c) The names, addresses, official positions and 728
professional qualifications of the individuals who are responsible 729
for the conduct of affairs of the administrator; including all 730
members of the board of directors, board of trustees, executive 731
committee or other governing board or committee; the principal 732
officers in the case of a corporation or the partners or members 733
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in the case of a partnership or association; shareholders holding 734
directly or indirectly ten percent (10%) or more of the voting 735
securities of the administrator; and any other person who 736
exercises control or influence over the affairs of the 737
administrator; 738
(d) Annual financial statements or reports for the two 739
(2) most recent years which prove that the applicant is solvent 740
and such information as the commissioner may require in order to 741
review the current financial condition of the applicant; 742
(e) A statement describing the business plan including 743
information on staffing levels and activities proposed in this 744
state and nationwide. The plan must provide details setting forth 745
the administrator's capability for providing a sufficient number 746
of experienced and qualified personnel in the areas of claims 747
processing, record keeping and underwriting; 748
(f) If the applicant will be managing the solicitation 749
of new or renewal business, proof that it employs or has 750
contracted with an agent licensed by this state for solicitation 751
and taking of applications. Any applicant which intends to 752
directly solicit insurance contracts or to otherwise act as an 753
insurance agent must provide proof that it has a license as an 754
insurance agent in this state; 755
(g) Such other pertinent information as may be required 756
by the commissioner. 757
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(3) The applicant shall make available for inspection by the 758
commissioner copies of all contracts with insurers or other 759
persons utilizing the services of the administrator. 760
(4) The commissioner may refuse to issue a certificate of 761
authority if the commissioner determines that the administrator, 762
or any individual responsible for the conduct of affairs of the 763
administrator as defined in subsection (2)(c) of this section, is 764
not competent, trustworthy, financially responsible or of good 765
personal and business reputation, or has had an insurance or an 766
administrator license denied or revoked for cause by any state. 767
(5) A certificate of authority issued under this section 768
shall remain valid, unless surrendered, suspended or revoked by 769
the commissioner, for so long as the administrator continues in 770
business in this state and remains in compliance with this 771
chapter. 772
(6) An administrator is not required to hold a certificate 773
of authority as an administrator in this state if all of the 774
following conditions are met: 775
(a) The administrator is not soliciting business as an 776
administrator in this state; 777
(b) In the case of any group policy or plan of 778
insurance serviced by the administrator, the lesser of five 779
percent (5%) or one hundred (100) certificate holders reside in 780
this state. 781
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(7) An administrator shall immediately notify the 782
commissioner of any material change in its ownership, control or 783
other fact or circumstance affecting its qualification for a 784
certificate of authority in this state. 785
(8) No bonding shall be required by the commissioner of any 786
administrator whose business is restricted solely to benefit plans 787
which are either fully insured by an authorized insurer or which 788
are bona fide employee benefit plans established by an employer or 789
any employee organization, or both, for which the insurance laws 790
of this state are preempted pursuant to the Employee Retirement 791
Income Security Act of 1974. 792
SECTION 20. Section 83-18-25, Mississippi Code of 1972, is 793
brought forward as follows: 794
83-18-25. Upon request from an administrator, the 795
commissioner may waive the application requirements of subsection 796
(2) of Section 83-18-23 if the administrator has a valid 797
certificate of authority as an administrator issued in a state 798
which has standards for administrators that are at least as 799
stringent as those contained in the model statute for third-party 800
administrators of the National Association of Insurance 801
Commissioners. 802
SECTION 21. Section 83-18-27, Mississippi Code of 1972, is 803
brought forward as follows: 804
83-18-27. (1) Each administrator shall file an annual 805
report for the preceding calendar year with the commissioner on or 806
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before March 1 of each year, or within such extension of time 807
therefor as the commissioner for good cause may grant. The report 808
shall be in the form and contain such matters as the commissioner 809
prescribes and shall be verified by at least two (2) officers of 810
the administrator. 811
(2) The annual report shall include the complete names and 812
addresses of all insurers with which the administrator had an 813
agreement during the preceding fiscal year. 814
(3) At the time of filing its annual report, the 815
administrator shall pay a filing fee as required by the 816
commissioner. 817
SECTION 22. Section 83-18-29, Mississippi Code of 1972, is 818
brought forward as follows: 819
83-18-29. (1) The certificate of authority of an 820
administrator shall be suspended or revoked if the commissioner 821
finds that the administrator: 822
(a) Is in an unsound financial condition; 823
(b) Is using such methods or practices in the conduct 824
of its business so as to render its further transaction of 825
business in this state hazardous or injurious to insured persons 826
or the public; or 827
(c) Has failed to pay any judgment rendered against it 828
in this state within sixty (60) days after the judgment has become 829
final. 830
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(2) The commissioner may, in his or her discretion, suspend 831
or revoke the certificate of authority of an administrator if the 832
commissioner finds that the administrator: 833
(a) Has violated any lawful rule or order of the 834
commissioner or any provision of the insurance laws of this state; 835
(b) Has refused to be examined or to produce its 836
accounts, records and files for examination, or if any of its 837
officers has refused to give information with respect to its 838
affairs or has refused to perform any other legal obligation as to 839
such examination, when required by the commissioner; 840
(c) Has, without just cause, refused to pay proper 841
claims or perform services arising under its contracts or has, 842
without just cause, caused covered individuals to accept less than 843
the amount due them or caused covered individuals to employ 844
attorneys or bring suit against the administrator to secure full 845
payment or settlement of such claims; 846
(d) Is affiliated with or under the same general 847
management or interlocking directorate or ownership as another 848
administrator or insurer which unlawfully transacts business in 849
this state without having a certificate of authority; 850
(e) At any time fails to meet any qualification for 851
which issuance of the certificate could have been refused had such 852
failure then existed and been known to the department; 853
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(f) Has been convicted of, or has entered a plea of 854
guilty or nolo contendere to, a felony without regard to whether 855
adjudication was withheld; or 856
(g) Is under suspension or revocation in another state. 857
(3) The commissioner may, in his or her discretion and 858
without advance notice or hearing thereon, immediately suspend the 859
certificate of any administrator if the commissioner finds that 860
one or more of the following circumstances exist: 861
(a) The administrator is insolvent or impaired; 862
(b) A proceeding for receivership, conservatorship, 863
rehabilitation or other delinquency proceeding regarding the 864
administrator has been commenced in any state; 865
(c) The financial condition or business practices of 866
the administrator otherwise pose an imminent threat to the public 867
health, safety or welfare of the residents of this state. 868
(4) If the commissioner finds that one or more grounds exist 869
for the suspension or revocation of a certificate of authority 870
issued under this chapter, the commissioner may, in lieu of such 871
suspension or revocation, impose a fine upon the administrator. 872
SECTION 23. Section 83-18-101, Mississippi Code of 1972, is 873
brought forward as follows: 874
83-18-101. Sections 83-18-101 through 83-18-111 may be cited 875
as the Managing General Agents Act. 876
SECTION 24. Section 83-18-103, Mississippi Code of 1972, is 877
brought forward as follows: 878
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83-18-103. As used in Sections 83-18-101 through 83-18-111: 879
(a) "Actuary" means a person who is a member in good 880
standing of the American Academy of Actuaries. 881
(b) "Insurer" means any person, firm, association or 882
corporation duly licensed in this state as an insurance company as 883
defined in Section 83-5-1, Mississippi Code of 1972. 884
(c) "Managing general agent" means any person, firm, 885
association or corporation who negotiates and binds ceding 886
reinsurance contracts on behalf of an insurer or manages all or 887
part of the insurance business of an insurer (including the 888
management of a separate division, department or underwriting 889
office) and acts as an agent for such insurer whether known as a 890
managing general agent, manager or other similar term, who, with 891
or without the authority, either separately or together with 892
affiliates, produces, directly or indirectly, and underwrites an 893
amount of gross direct written premium equal to or more than five 894
percent (5%) of the policyholder surplus as reported in the last 895
annual statement of the insurer in any one (1) quarter or year 896
together with one or more of the following: (i) adjusts or pays 897
claims in excess of an amount determined by the commissioner; or 898
(ii) negotiates reinsurance on behalf of the insurer. 899
Notwithstanding the above, the following persons shall not be 900
considered as a managing general agent for the purposes of 901
Sections 83-18-101 through 83-18-111: 902
(i) An employee of the insurer; 903
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(ii) A United States manager of the United States 904
branch of an alien insurer; 905
(iii) An underwriting manager which, pursuant to 906
contract, manages all the insurance operations of the insurer, is 907
under common control with the insurer, subject to the holding 908
company regulatory act, and whose compensation is not based on the 909
volume of premiums written; or 910
(iv) The attorney-in-fact authorized by and acting 911
for the subscribers of a reciprocal insurer or interinsurance 912
exchange under powers of attorney. 913
(d) "Underwrite" means the authority to accept or 914
reject risk on behalf of the insurer. 915
SECTION 25. Section 83-18-105, Mississippi Code of 1972, is 916
brought forward as follows: 917
83-18-105. (1) No person, firm, association or corporation 918
shall act in the capacity of a managing general agent with respect 919
to risks located in this state for an insurer licensed in this 920
state unless such person is a licensed producer in this state. 921
(2) No person, firm, association or corporation shall act in 922
the capacity of a managing general agent representing an insurer 923
domiciled in this state with respect to risks located outside this 924
state unless such person is licensed as a producer in this state 925
(such license may be a nonresident license) under Sections 926
83-18-101 through 83-18-111. 927
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(3) The commissioner may require a bond in an amount 928
acceptable to him for the protection of the insurer. The 929
commissioner may require the managing general agent to maintain an 930
errors and omissions policy. 931
(4) The commissioner may adopt reasonable rules and 932
regulations to implement Sections 83-18-101 through 83-18-111. 933
SECTION 26. Section 83-18-107, Mississippi Code of 1972, is 934
brought forward as follows: 935
83-18-107. (1) No person, firm, association or corporation 936
acting in the capacity of a managing general agent shall place 937
business with an insurer unless there is in force a written 938
contract between the parties which sets forth the responsibilities 939
of each party and where both parties share responsibility for a 940
particular function, specifies the division of such 941
responsibilities and which contains the following minimum 942
provisions: 943
(a) The insurer may terminate the contract for cause 944
upon written notice to the managing general agent. The insurer may 945
suspend the underwriting authority of the managing general agent 946
during the pendency of any dispute regarding the cause for 947
termination. 948
(b) The managing general agent will render accounts to 949
the insurer detailing all transactions and remit all funds due 950
under the contract to the insurer on not less than a monthly 951
basis. 952
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(c) All funds collected for the account of an insurer 953
will be held by the managing general agent in a fiduciary capacity 954
in a bank which is a member of the Federal Reserve System. This 955
account shall be used for all payments on behalf of the insurer. 956
The managing general agent may retain no more than three (3) 957
months estimated claims payments and allocated loss adjustment 958
expenses. 959
(d) Separate records of business written by the 960
managing general agent shall be maintained. The insurer shall have 961
access and right to copy all accounts and records related to its 962
business in a form usable by the insurer and the commissioner 963
shall have access to all books, bank accounts and records of the 964
managing general agent in a form usable to the commissioner. 965
(e) The contract may not be assigned in whole or part 966
by the managing general agent. 967
(f) Appropriate underwriting guidelines including: 968
(i) The maximum annual premium volume; 969
(ii) The basis of the rates to be charged; 970
(iii) The types of risks which may be written; 971
(iv) Maximum limits of liability; 972
(v) Applicable exclusions; 973
(vi) Territorial limitations; 974
(vii) Policy cancellation provisions; and 975
(viii) The maximum policy period. 976
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The insurer shall have the right to cancel or nonrenew any policy 977
of insurance subject to the applicable laws and regulations. 978
(g) If the contract permits the managing general agent 979
to settle claims on behalf of the insurer: 980
(i) All claims must be reported to the company in 981
a timely manner. 982
(ii) A copy of the claim file shall be sent to the 983
insurer at its request or as soon as it becomes known that the 984
claim: 985
(A) Has the potential to exceed an amount 986
determined by the commissioner or exceeds the limit set by the 987
company, whichever is less; 988
(B) Involves a coverage dispute; 989
(C) May exceed the managing general agent's 990
claims settlement authority; 991
(D) Is open for more than six (6) months; or 992
(E) Is closed by payment of an amount set by 993
the commissioner or an amount set by the company, whichever is 994
less. 995
(h) Where electronic claims files are in existence, the 996
contract must address the timely transmission of the data. 997
(2) All claim files shall be the joint property of the 998
insurer and managing general agent. However, upon an order of 999
liquidation of the insurer such files shall become the sole 1000
property of the insurer or its estate; the managing general agent 1001
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shall have reasonable access to and the right to copy the files on 1002
a timely basis. 1003
(3) Any settlement authority granted to the managing general 1004
agent may be terminated for cause upon the insurer's written 1005
notice to the managing general agent or upon the termination of 1006
the contract. The insurer may suspend the settlement authority 1007
during the pendency of any dispute regarding the cause for 1008
termination. 1009
(4) If the contract provides for a sharing of interim 1010
profits by the managing general agent, and the managing general 1011
agent has the authority to determine the amount of the interim 1012
profits by establishing loss reserves or controlling claim 1013
payments, or in any other manner, interim profits shall not be 1014
paid to the managing general agent until one (1) year after they 1015
are earned for property insurance business and five (5) years 1016
after they are earned on casualty business and not until the 1017
profits have been verified pursuant to Section 83-18-109. 1018
(5) The managing general agent shall not: 1019
(a) Bind reinsurance or retrocessions on behalf of the 1020
insurer, except that the managing general agent may bind 1021
facultative reinsurance contracts pursuant to obligatory 1022
facultative agreements if the contract with the insurer contains 1023
reinsurance underwriting guidelines including, for both 1024
reinsurance assumed and ceded, a list of reinsurers with which 1025
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such automatic agreements are in effect, the coverages and amounts 1026
or percentages that may be reinsured and commission schedules; 1027
(b) Commit the insurer to participate in insurance or 1028
reinsurance syndicates; 1029
(c) Appoint any producer without assuring that the 1030
producer is lawfully licensed to transact the type of insurance 1031
for which he is appointed; 1032
(d) Without prior approval of the insurer, pay or 1033
commit the insurer to pay a claim over a specified amount, net of 1034
reinsurance, which shall not exceed one percent (1%) of the 1035
insurer's policyholder's surplus as of December 31 of the last 1036
completed calendar year; 1037
(e) Collect any payment from a reinsurer or commit the 1038
insurer to any claim settlement with a reinsurer without prior 1039
approval of the insurer. If prior approval is given, a report must 1040
be promptly forwarded to the insurer; 1041
(f) Permit its subproducer to serve on the insurer's 1042
board of directors; 1043
(g) Jointly employ an individual who is employed with 1044
the insurer; or 1045
(h) Appoint a submanaging general agent. 1046
SECTION 27. Section 83-18-109, Mississippi Code of 1972, is 1047
brought forward as follows: 1048
83-18-109. (1) The insurer shall have on file an 1049
independent financial examination, in a form acceptable to the 1050
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commissioner, of each managing general agent with which it has 1051
done business. 1052
(2) If a managing general agent establishes loss reserves, 1053
the insurer shall annually obtain the opinion of an actuary 1054
attesting to the adequacy of loss reserves established for losses 1055
incurred and outstanding on business produced by the managing 1056
general agent. This is in addition to any other required loss 1057
reserve certification. 1058
(3) The insurer shall periodically (at least semiannually) 1059
conduct an on-site review of the underwriting and claims 1060
processing operations of the managing general agent. 1061
(4) Binding authority for all reinsurance contracts or 1062
participation in insurance or reinsurance syndicates shall rest 1063
with an officer of the insurer, who shall not be affiliated with 1064
the managing general agent. 1065
(5) Within thirty (30) days of entering into or termination 1066
of a contract with a managing general agent, the insurer shall 1067
provide written notification of such appointment or termination to 1068
the commissioner. Notices of appointment of a managing general 1069
agent shall include a statement of duties which the applicant is 1070
expected to perform on behalf of the insurer, the lines of 1071
insurance for which the applicant is to be authorized to act and 1072
any other information the commissioner may request. 1073
(6) An insurer shall review its books and records each 1074
quarter to determine if any producer as defined by Section 1075
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83-18-103 has become, by operation of Section 83-18-103, a 1076
managing general agent as defined in that section. If the insurer 1077
determines that a producer has become a managing general agent 1078
pursuant to the above, the insurer shall promptly notify the 1079
producer and the commissioner of such determination and the 1080
insurer and producer must fully comply with the provisions of 1081
Sections 83-18-101 and 83-18-111 within thirty (30) days. 1082
(7) An insurer shall not appoint to its board of directors 1083
an officer, director, employee, subproducer or controlling 1084
shareholder of its managing general agent. This subsection shall 1085
not apply to relationships governed by the Insurance Holding 1086
Company Act or, if applicable, the Broker Controlled Insurer Act. 1087
(8) The acts of the managing general agent are considered to 1088
be the acts of the insurer on whose behalf it is acting. A 1089
managing general agent may be examined as if it were the insurer. 1090
SECTION 28. Section 83-18-111, Mississippi Code of 1972, is 1091
brought forward as follows: 1092
83-18-111. (1) If the commissioner finds after a hearing 1093
conducted in accordance with Section 83-6-39, Mississippi Code of 1094
1972, that any person has violated Sections 83-18-101 through 1095
83-18-111, the commissioner may order: 1096
(a) For each separate violation, a penalty in an amount 1097
not to exceed Five Hundred Dollars ($500.00); 1098
(b) Revocation or suspension of the producer's license; 1099
and 1100
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ST: Pharmacy Benefit Prompt Pay Act, Insurance
Administrators and Managing General Agents;
bring forward sections relating to.
(c) The managing general agent to reimburse the 1101
insurer, the rehabilitator or liquidator of the insurer for any 1102
losses incurred by the insurer caused by a violation of Sections 1103
83-18-101 through 83-18-111 committed by the managing general 1104
agent. 1105
(2) The decision, determination or order of the commissioner 1106
pursuant to subsection (1) shall be subject to judicial review 1107
pursuant to Section 83-6-41, Mississippi Code of 1972. 1108
(3) Nothing contained in this section shall affect the right 1109
of the commissioner to impose any other penalties provided for in 1110
the insurance law. 1111
(4) Nothing contained in Sections 83-18-101 through 1112
83-18-111 is intended to or shall in any manner limit or restrict 1113
the rights of policyholders, claimants and auditors. 1114
SECTION 29. This act shall take effect and be in force from 1115
and after July 1, 2026. 1116