2005 Texas Insurance Code CHAPTER 4151. THIRD-PARTY ADMINISTRATORS

INSURANCE CODE

SUBTITLE D. OTHER PROFESSIONALS

CHAPTER 4151. THIRD-PARTY ADMINISTRATORS

SUBCHAPTER A. GENERAL PROVISIONS


	§ 4151.001. DEFINITIONS.  In this chapter:                                  
		(1)  "Administrator" means a person who, in connection 
with annuities or life, health, and accident benefits, including 
pharmacy benefits, collects premiums or contributions from or 
adjusts or settles claims for residents of this state.  The term 
does not include a person described by Section 4151.002.
		(2)  "Insurer" means a person who engages in the 
business of life, health, or accident insurance under the law of 
this state.
		(3)  "Person" means an individual, partnership, 
corporation, organization, government or governmental subdivision 
or agency, business trust, estate trust, association, or any other 
legal entity.
		(4)  "Plan" means a plan, fund, or program established, 
adopted, or maintained by a plan sponsor or insurer to the extent 
that the plan, fund, or program is established, adopted, or 
maintained to provide indemnification or expense reimbursement for 
any type of life, health, or accident benefit.
		(5)  "Plan sponsor" means a person, other than an 
insurer, who establishes, adopts, or maintains a plan that covers 
residents of this state, including a plan established, adopted, or 
maintained by two or more employers or jointly by one or more 
employers and one or more employee organizations, an association, a 
committee, a joint board of trustees, or any similar group of 
representatives who establish, adopt, or maintain a plan.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.002. EXEMPTIONS.  A person is not an administrator 
if the person is:
		(1)  an employer acting on behalf of its employees or 
the employees of one or more subsidiaries or affiliated 
corporations of the employer;
		(2)  a union acting on behalf of its members;                                 
		(3)  an insurer or a group hospital service corporation 
subject to Chapter 842 acting with respect to a policy lawfully 
issued and delivered by the insurer or corporation in and under the 
law of a state in which the insurer or corporation was authorized to 
engage in the business of insurance;
		(4)  a health maintenance organization that is 
authorized to operate in this state under Chapter 843 with respect 
to any activity that is specifically regulated under that chapter, 
Chapter 1271, 1272, or 1367, Subchapter A, Chapter 1452, or 
Subchapter B, Chapter 1507;
		(5)  an agent licensed under Subchapter B, Chapter 
4054, who receives commissions as an agent and is acting:
			(A)  under appointment on behalf of an insurer 
authorized to engage in the business of insurance in this state;  
and
			(B)  in the customary scope and duties of the 
person's authority as an agent;
		(6)  a creditor acting on behalf of its debtor with 
respect to insurance that covers a debt between the creditor and its 
debtor, if the creditor performs only the functions of a group 
policyholder or a creditor;
		(7)  a trust established in conformity with 29 U.S.C. 
Section 186 or a trustee or employee who is acting under the trust;
		(8)  a trust that is exempt from taxation under Section 
501(a), Internal Revenue Code of 1986, or a trustee or employee 
acting under the trust;
		(9)  a custodian or a custodian's agent or employee who 
is acting under a custodian account that complies with Section 
401(f), Internal Revenue Code of 1986;
		(10)  a bank, credit union, savings and loan 
association, or other financial institution that is subject to 
supervision or examination under federal or state law by a federal 
or state regulatory authority, if the institution is performing 
only those functions for which the institution holds a license 
under federal or state law;
		(11)  a company that advances and collects a premium or 
charge from its credit card holders on their authorization, if the 
company does not adjust or settle claims and acts only in the 
company's debtor-creditor relationship with its credit card 
holders;
		(12)  a person who adjusts or settles claims in the 
normal course of the person's practice or employment as a licensed 
attorney and who does not collect any premium or charge in 
connection with annuities or with life, health, or accident 
benefits, including pharmacy benefits;
		(13)  an adjuster licensed by the department who is 
engaged in the performance of the person's powers and duties as an 
adjuster in the scope of the person's license;
		(14)  a person who provides technical, advisory, 
utilization review, precertification, or consulting services to an 
insurer, plan, or plan sponsor but does not make any management or 
discretionary decisions on behalf of the insurer, plan, or plan 
sponsor;
		(15)  an attorney in fact for a Lloyd's plan operating 
under Chapter 941 or for a reciprocal or interinsurance exchange 
operating under Chapter 942 who is acting in the capacity of 
attorney in fact under the applicable chapter;
		(16)  a joint fund, risk management pool, or 
self-insurance pool composed of political subdivisions of this 
state that participate in a fund or pool through interlocal 
agreements, any nonprofit administrative agency or governing body 
or other nonprofit entity that acts solely on behalf of a fund, 
pool, agency, or body, or any other fund, pool, agency, or body 
established under or for the purpose of implementing an interlocal 
governmental agreement;
		(17)  a self-insured political subdivision;                                   
		(18)  a plan under which insurance benefits are 
provided exclusively by an insurer authorized to engage in the 
business of insurance in this state and the administrator of which 
is:
			(A)  a full-time employee of the plan's organizing 
or sponsoring association, trust, or other entity;  or
			(B)  a trustee of the organizing or sponsoring 
trust;  or                  
		(19)  a parent of a wholly owned direct or indirect 
subsidiary insurer authorized to engage in the business of 
insurance in this state or a wholly owned direct or indirect 
subsidiary insurer that is a part of the parent's holding company 
system that, under an agreement regulated and approved under 
Chapter 823 or a similar statute of the domiciliary state if the 
parent or subsidiary insurer is a foreign insurer engaged in 
business in this state, on behalf of only itself or an affiliated 
insurer:
			(A)  collects premiums or contributions, if the 
parent or subsidiary insurer:
				(i)  prepares only billing statements and 
places those statements in the United States mail;  and
				(ii)  causes all collected premiums to be 
deposited directly in a depository account of the particular 
affiliated insurer;  or
			(B)  furnishes proof-of-loss forms, reviews 
claims, determines the amount of the liability for those claims, 
and negotiates settlements, if the parent or subsidiary insurer 
pays claims only from the funds of the particular subsidiary by 
checks or drafts of that subsidiary.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.  
Amended by Acts 2005, 79th Leg., ch. 728, § 11.074(j), eff. Sept. 
1, 2005.


	§ 4151.003. APPLICABILITY OF OTHER PROVISIONS OF 
CODE.  An administrator is subject to Section 823.457, Subchapter H 
of Chapter 101, Chapter 541, Subchapter A of Chapter 542, and 
Chapter 804.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.004. APPLICABILITY TO CERTAIN INSURERS AND HEALTH 
MAINTENANCE ORGANIZATIONS.  An insurer or health maintenance 
organization that is not exempt under Section 4151.002(3) or (4) is 
subject to all provisions of this chapter other than Sections 
4151.005, 4151.051-4151.054, 4151.056, and 4151.206(a)(1).

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.005. ADMINISTRATOR NOT INSURANCE AGENT.  (a) An 
administrator licensed in any state who accepts an agent's 
commission for coverage for a risk located in this state and 
disburses that commission to an agent in this state is not 
considered an agent for purposes of this state's laws relating to 
the licensing of agents.
	(b)  The exemption provided by this section does not 
authorize an administrator to perform any other act for which a 
license as an agent is required by law.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.006. RULES.  The commissioner may adopt fair and 
reasonable rules, minimum standards, or limitations as appropriate 
to augment and implement this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          

SUBCHAPTER B. CERTIFICATE OF AUTHORITY


	§ 4151.051. CERTIFICATE OF AUTHORITY REQUIRED.  (a) An 
individual, corporation, organization, trust, partnership, or 
other legal entity may not act as or hold itself out as an 
administrator unless the entity is covered by and is engaging in 
business under a certificate of authority issued under this 
chapter.
	(b)  An administrator is required to hold only one 
certificate of authority issued under this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.052. APPLICATION.  An application for a 
certificate of authority to engage in business as an administrator 
must be in a form prescribed by the commissioner and must include 
the following:
		(1)  a copy of each basic organizational document of 
the applicant, including the articles of incorporation, bylaws, 
articles of association, trade name certificate, and any other 
similar document and a copy of any amendment to any of those 
documents;
		(2)  a description of the applicant and the applicant's 
services, facilities, and personnel;
		(3)  if the applicant is not domiciled in this state, a 
power of attorney executed by the applicant appointing the 
commissioner, the commissioner's successors in office, or the 
commissioner's appointed designee as the applicant's attorney in 
this state on whom process may be served in any legal action or 
proceeding based on a cause of action arising in this state against 
the applicant;
		(4)  an audited financial statement of the applicant 
covering the preceding three calendar years or any lesser period 
that the applicant and any predecessors of the applicant have been 
in existence, or if an audited financial statement is not 
available, an unaudited financial statement as of a date not 
earlier than the 120th day before the date the application is filed, 
accompanied by an affidavit or certification of the applicant that:
			(A)  the unaudited financial statement is true and 
correct, as of its date;  and
			(B)  a material change in financial condition has 
not occurred from the date of the financial statement to the 
execution date of the affidavit or certification;  and
		(5)  any other information the commissioner reasonably 
requires.            

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.053. APPROVAL OF APPLICATION.  The commissioner 
shall approve an application for a certificate of authority to 
engage in business in this state as an administrator if the 
commissioner is satisfied that:
		(1)  granting the application would not violate a 
federal or state law;     
		(2)  the financial condition of the applicant or of 
each person who would operate or control the applicant is such that 
granting a certificate of authority would not be adverse to the 
public interest;
		(3)  the applicant has not attempted to obtain the 
certificate of authority through fraud or bad faith;
		(4)  the applicant has complied with this chapter and 
rules adopted by the commissioner under this chapter;  and
		(5)  the name under which the applicant will engage in 
business in this state is not so similar to that of another 
administrator or insurer that it is likely to mislead the public.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.054. DENIAL OF APPLICATION.  (a) If the 
commissioner is unable to approve an application for a certificate 
of authority, the commissioner shall:
		(1)  provide the applicant with written notice 
specifying each deficiency in the application;  and
		(2)  offer the applicant the opportunity for a hearing 
to address each reason and circumstance for possible denial of the 
application.
	(b)  The commissioner must provide an opportunity for a 
hearing before the commissioner finally denies an application.
	(c)  At the hearing, the applicant has the burden to produce 
sufficient competent evidence on which the commissioner can make 
the determinations required by Section 4151.053.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.055. FIDELITY BOND REQUIRED.  (a) If the 
commissioner approves an application for a certificate of 
authority, before the commissioner issues the certificate of 
authority, the applicant must:
		(1)  obtain and maintain a fidelity bond that complies 
with this section;  and
		(2)  submit to the commissioner proof that the 
applicant has obtained the fidelity bond.
	(b)  The fidelity bond must protect against an act of fraud 
or dishonesty by the applicant in exercising the applicant's powers 
and duties as administrator.
	(c)  The fidelity bond may not be less than $10,000 and may 
not be more than the lesser of:
		(1)  10 percent of the amount of funds handled during 
the preceding year or, if no funds were handled during the preceding 
year, 10 percent of the amount of funds reasonably estimated to be 
handled by the administrator during the current calendar year;  or
		(2)  $500,000.                                                                
	(d)  On written request by an administrator for reduction of 
the amount of the fidelity bond for a particular year, the 
commissioner may authorize the reduction of the amount of the bond 
if the administrator presents evidence that the amount of funds to 
be handled during that year will be less than the amount handled 
during the preceding year.
	(e)  For purposes of this section, the amount of funds 
handled by a person in the person's capacity as administrator is 
either the total amount of premiums and contributions received by 
the administrator or the total amount of benefits paid by the 
administrator, whichever is greater, during the preceding calendar 
year in all jurisdictions in which the person acts as an 
administrator.
	(f)  Unless the administrator and the insurer or plan agree 
otherwise in writing, an administrator is required to obtain and 
maintain only one fidelity bond for all insurers and plans for which 
the administrator acts as administrator in this state.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.056. DURATION OF CERTIFICATE OF AUTHORITY.  A 
certificate of authority issued to an administrator under this 
chapter is effective until it is suspended, canceled, or revoked.  
The issuance, denial, suspension, cancellation, or revocation of a 
certificate of authority to act as an administrator is subject to:
		(1)  Subchapters B and C, Chapter 4005;  and                                  
		(2)  Chapter 82.                                                              

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          

SUBCHAPTER C. POWERS AND DUTIES OF THIRD-PARTY ADMINISTRATORS


	§ 4151.101. WRITTEN AGREEMENT WITH INSURER OR PLAN 
SPONSOR REQUIRED.  An administrator may provide services only 
under a written agreement with an insurer or plan sponsor.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.102. CONTENTS OF WRITTEN AGREEMENT.  (a) The 
written agreement must include each requirement prescribed by this 
subchapter except for a requirement that does not apply to any 
function the administrator performs.
	(b)  If a policy or plan document is issued to a trustee, a 
copy of the trust agreement and any amendment to that trust 
agreement becomes part of the written agreement.
	(c)  The written agreement may not contain a provision that 
unreasonably restricts the availability to a plan participant of an 
individual life, health, or accident policy or annuity through an 
agent selected by the plan participant.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.103. RETENTION OF WRITTEN AGREEMENT;  INSPECTION 
BY COMMISSIONER.  (a) During the term of the written agreement, the 
administrator and the insurer, plan, or plan sponsor shall retain a 
copy of the agreement as part of their official records.
	(b)  On written request by the commissioner, the 
administrator shall make the written agreement available for 
inspection by the commissioner or the commissioner's designee.
	(c)  Information the commissioner or the commissioner's 
designee obtains from the written agreement is confidential and may 
not be made available to the public.  An employee of the department 
may examine the information in exercising powers and performing 
duties under this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.104. NOTICE OF USE OF ADMINISTRATOR'S 
SERVICES.  If an insurer, plan, or plan sponsor uses the services 
of an administrator, the administrator shall give written notice to 
each insured or plan participant of the administrator's identity 
and the relationship among the administrator and the insurer, plan, 
or plan sponsor and the insured or plan participant.  The insurer, 
plan, or plan sponsor must approve the notice before the notice is 
distributed.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.105. PAYMENTS TO ADMINISTRATOR.  (a) If an 
insurer, plan, or plan sponsor uses the services of an 
administrator:
		(1)  a payment of a premium or contribution to the 
administrator by or on behalf of an insured or plan participant is 
considered to have been received by the insurer, plan, or plan 
sponsor;  and
		(2)  a payment of a return premium, contribution, or 
claim to the administrator by the insurer, plan, or plan sponsor is 
not considered payment to the insured, plan participant, or 
claimant until the insured, plan participant, or claimant receives 
the payment.
	(b)  This section does not limit a right of an insurer, plan, 
or plan sponsor against the administrator resulting from the 
administrator's failure to make a payment to an insured, plan 
participant, or claimant.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.106. CERTAIN FUNDS COLLECTED OR RECEIVED BY 
ADMINISTRATOR.  (a) An administrator who collects funds must 
identify and state separately in writing the amount of any premium 
or contribution specified by the insurer, plan, or plan sponsor for 
the coverage and provide the information to any person who pays to 
the administrator a premium or contribution.
	(b)  An administrator holds in a fiduciary capacity:                           
		(1)  a premium or contribution the administrator 
collects on behalf of an insurer, plan, or plan sponsor;  and
		(2)  a return premium the administrator receives from 
an insurer, plan, or plan sponsor.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.107. DELIVERY OR DEPOSIT OF CERTAIN FUNDS RECEIVED 
BY ADMINISTRATOR.  (a) On receiving a premium, contribution, or 
return premium, an administrator shall:
		(1)  timely deliver the funds to the person entitled to 
the funds according to terms of the written agreement;  or
		(2)  promptly deposit the funds in a fiduciary bank 
account established and maintained by the administrator.
	(b)  If premiums or contributions deposited in a fiduciary 
bank account were collected on behalf of more than one insurer, 
plan, or plan sponsor, the administrator shall:
		(1)  maintain records that clearly record separately 
the deposits to and withdrawals from the account on behalf of each 
insurer, plan, or plan sponsor;  and
		(2)  on request of an insurer, plan, or plan sponsor, 
provide to the insurer, plan, or plan sponsor a copy of the records 
relating to deposits and withdrawals on behalf of that insurer or 
plan.
	(c)  The requirements of Subsection (b):                                       
		(1)  are in addition to requirements of any other 
federal or state law;  and
		(2)  do not authorize the commingling of funds if 
otherwise prohibited by law.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.108. WITHDRAWALS FROM FIDUCIARY ACCOUNT.  A 
withdrawal from a fiduciary bank account established under Section 
4151.107 may be made only as provided in the written agreement for 
any of the following purposes:
		(1)  delivery to an insurer, plan, or plan sponsor 
entitled to payment;     
		(2)  deposit in an account controlled and maintained in 
the name of the insurer, plan, or plan sponsor;
		(3)  transfer to and deposit in a claims payment 
account for payment of a claim as provided by Section 4151.111;
		(4)  payment to a group policyholder for delivery to 
the insurer entitled to payment;
		(5)  payment to the administrator of the 
administrator's commission, fees, or charges;
		(6)  delivery of a return premium to any person 
entitled to payment;  or    
		(7)  payment of a premium for stop-loss or excess loss 
insurance.           

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.109. PAYMENT OF CLAIMS FROM FIDUCIARY ACCOUNT 
PROHIBITED.  An administrator may not pay a claim from a fiduciary 
bank account established under Section 4151.107.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.110. UNDERWRITING STANDARDS.  If an administrator 
has the authority to accept or reject a risk, the written agreement 
must address underwriting or other standards of the insurer or 
plan.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.111. ADJUDICATION OF CLAIMS.  (a) An administrator 
shall adjudicate a claim not later than the 60th day after the date 
on which the administrator receives valid proof of loss in 
connection with the claim.
	(b)  The administrator shall pay each claim on a draft 
authorized by the insurer, plan, or plan sponsor in the written 
agreement.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.112. MAINTENANCE OF BOOKS AND RECORDS.  (a) An 
administrator shall maintain at the administrator's principal 
administrative office adequate books and records of each 
transaction in which the administrator engages with an insurer, 
plan, plan sponsor, insured, or plan participant.
	(b)  The administrator shall maintain the books and records:                   
		(1)  until the fifth anniversary of the end of the term 
of the written agreement to which the books and records relate;  and
		(2)  in accordance with prudent standards of insurance 
recordkeeping.       

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.113. ACCESS TO BOOKS AND RECORDS.  (a) For the 
purpose of examination, audit, and inspection, the administrator 
shall provide to the commissioner and the commissioner's designee 
access to the books and records maintained as required by Section 
4151.112.
	(b)  A trade secret, including the identity and address of a 
policyholder or certificate holder, is confidential, except the 
commissioner may use that information in a proceeding against the 
administrator.
	(c)  An insurer, plan, or plan sponsor is entitled to 
continuing access to the books and records sufficient to permit the 
insurer, plan, or plan sponsor to fulfill a contractual obligation 
to an insured or plan participant.  The right provided by this 
subsection is subject to any restriction included in the written 
agreement relating to the parties' proprietary rights to the books 
and records.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.114. DISPOSITION OF BOOKS AND RECORDS ON 
TERMINATION OF WRITTEN AGREEMENT.  On termination of the written 
agreement, an administrator may fulfill the requirements of 
Sections 4151.112 and 4151.113 by:
		(1)  delivering the books and records:                                        
			(A)  to a successor administrator;  or                                       
			(B)  if there is not a successor administrator, to 
the insurer, plan, or plan sponsor;  and
		(2)  giving written notice to the commissioner of the 
location of the books and records.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.115. CONFIDENTIALITY OF PERSONAL 
INFORMATION.  (a) Information that identifies an individual 
covered by a plan is confidential.
	(b)  During the time information described by Subsection (a) 
is in an administrator's custody or control, the administrator 
shall take all reasonable precautions to prevent disclosure or use 
of the information for a purpose unrelated to administration of the 
plan.
	(c)  The administrator shall disclose information described 
by Subsection (a) only:
		(1)  in response to a court order;                                            
		(2)  for an examination conducted by the commissioner 
under this chapter;   
		(3)  for an audit or investigation conducted under the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et 
seq.);
		(4)  to or at the request of the insurer or plan 
sponsor;  or               
		(5)  with the written consent of the identified 
individual or the individual's legal representative.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.116. ADVERTISING.  Before an administrator uses 
advertising relating to business underwritten by an insurer, plan, 
or plan sponsor, the insurer, plan, or plan sponsor must approve use 
of the advertising.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.117. COMPENSATION OF ADMINISTRATOR.  An 
administrator's compensation may be determined:
		(1)  as a percentage of the premiums or charges the 
administrator collects or the amount of claims the administrator 
pays or processes;  or
		(2)  on another basis as specified in the written 
agreement.                

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          

SUBCHAPTER D. PHARMACY BENEFIT PLANS


	§ 4151.151. DEFINITION.  In this subchapter, "pharmacy 
benefit manager" means a person, other than a pharmacy or 
pharmacist, who acts as an administrator in connection with 
pharmacy benefits.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.152. IDENTIFICATION CARDS.  (a) Except as provided 
by rules adopted by the commissioner, an administrator for a plan 
that provides pharmacy benefits shall issue an identification card 
to each individual covered by the plan.  The administrator shall 
issue the identification card not later than the 30th day after the 
date the administrator receives notice that the individual is 
eligible for the benefits.
	(b)  The commissioner by rule shall adopt standard 
information to be included on the identification card.  The 
standard form identification card must include:
		(1)  the name or logo of the entity administering the 
pharmacy benefits;    
		(2)  the international identification number assigned 
by the American National Standards Institute for the entity 
administering the pharmacy benefits;
		(3)  the group number applicable to the covered 
individual;                 
		(4)  the effective date of the coverage evidenced by 
the card;              
		(5)  a telephone number to be used to contact an 
appropriate person to obtain information relating to the pharmacy 
benefits provided under the coverage;  and
		(6)  copayment information for generic and brand-name 
prescription drugs.   

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.153. DISCLOSURE OF CERTAIN PATIENT INFORMATION 
PROHIBITED.  (a) A pharmacy benefit manager may not sell a list of 
patients that contains information through which the identity of an 
individual patient is disclosed. 
	(b)  A pharmacy benefit manager shall maintain all data that 
identifies a patient in a confidential manner that prevents 
disclosure to a third party unless the disclosure is otherwise 
authorized by law or by the patient.
	(c)  This section does not prohibit:                                           
		(1)  general advertising about a specific 
pharmaceutical product or service;  or
		(2)  the request and receipt by a person of information 
regarding:          
			(A)  a specific pharmaceutical product or 
service;                         
			(B)  the person's own records or claims;  or                                 
			(C)  the person's dependent's records or claims.                             

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          

SUBCHAPTER E. REGULATION OF THIRD-PARTY ADMINISTRATORS


	§ 4151.201. EXAMINATION OF ADMINISTRATOR.  (a) The 
commissioner may examine an administrator with regard to its 
business in this state.
	(b)  The commissioner may designate one or more employees to 
perform an examination.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.202. CONTENTS OF EXAMINATION;  ON-SITE 
EVALUATION.  (a) An examination under Section 4151.201 must 
include a review of:
		(1)  each existing written agreement between the 
administrator and an insurer or plan sponsor;  and
		(2)  the administrator's financial statements.                                
	(b)  The commissioner also may have examiners conduct an 
on-site evaluation of the administrator's personnel and facilities 
and any books and records of the administrator relating to the 
transaction of business by and the financial condition of the 
administrator.
	(c)  Before an examiner enters an administrator's property, 
the commissioner shall give notice to the administrator of the 
examiner's intent to conduct an on-site evaluation.  The notice 
must:
		(1)  be in the form required by rule adopted by the 
commissioner;  and      
		(2)  include the date and estimated time that the 
examiner will enter the administrator's property.
	(d)  An examiner shall comply with operational rules of an 
administrator while on the administrator's property.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.203. COST OF EXAMINATION.  The cost of an 
examination under Section 4151.201 shall be paid from the fee 
collected under Section 4151.206(a)(2) and with revenue from the 
maintenance tax levied under Chapter 259.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.204. EXAMINATION UNDER OATH.  If necessary to make 
a complete evaluation of the activities and operations of an 
administrator, the commissioner may summon and examine under oath 
the administrator and the administrator's personnel.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.205. ANNUAL REPORT.  (a) An administrator shall 
annually, not later than March 1, file with the commissioner a 
report on a form prescribed by the commissioner.
	(b)  The annual report must cover the preceding calendar 
year.               

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.206. FEES.  (a) The commissioner shall collect and 
an applicant or administrator shall pay to the commissioner fees in 
an amount to be determined by the commissioner as follows:
		(1)  a filing fee not to exceed $1,000 for processing an 
original application for a certificate of authority for an 
administrator;
		(2)  a fee not to exceed $500 for an examination under 
Section 4201.201;  and
		(3)  a filing fee not to exceed $200 for an annual 
report.                  
	(b)  The commissioner shall deposit a fee collected under 
this section to the credit of the Texas Department of Insurance 
operating account.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.207. ADMINISTRATIVE SANCTIONS.  An administrator 
or other person who violates this chapter is subject to the 
sanctions provided by Chapter 82.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.          


	§ 4151.208. OFFENSE.  (a) An administrator commits an 
offense if the administrator knowingly violates this chapter or a 
rule of the commissioner adopted under this chapter.
	(b)  An offense under this section is a misdemeanor 
punishable by a fine of not less than $500 or more than $5,000.

Added by Acts 2003, 78th Leg., ch. 1274, § 7, eff. April 1, 2005.