2019 US Virgin Islands Code
Title 22 - Insurance
Chapter 60 - Third Party Administrators
§ 1527. Collection of premium, fiduciary duties of TPA

(a) All insurance charges, premiums, collateral, and loss reimbursements collected by a TPA on behalf of or for a payor, the return of premiums or collateral received from a payor, and any funds held by the TPA for the payment of claims, must be held by the TPA in a fiduciary capacity. The funds may not be used as general operating funds of the TPA and must be immediately remitted to the person entitled to them, or must be deposited promptly in a fiduciary account established and maintained by the TPA in a federally insured financial institution. This special fiduciary account must be known as a “Third Party Administrator Trust Fund Account” (TPATFA). The TPA shall render a periodic accounting to the payor detailing all transactions performed by the TPA pertaining to the business of the payor and the written agreement between the payor, and the TPA must include the specifications of this reporting. All TPATFA funds must be deposited and maintained in financial institutions that are located within the Virgin Islands and are subject to the jurisdiction of courts located within the Virgin Islands.

(b) The TPA shall keep copies of all records of any TPATFA maintained or controlled by the TPA, and, upon request of a payor, shall furnish the payor with copies of the records pertaining to the deposits and withdrawals made on behalf of the payor. If funds deposited in a TPATFA have been collected on behalf of or for more than one payor or for the payment of claims associated with more than one policy, the TPA shall keep records clearly recording the deposits in and withdrawals from the account on behalf of each payor and relating to each policyholder.

(c) The TPA may not pay any claim by withdrawals from a TPATFA in which premiums or charges are deposited. Withdrawals from a TPATFA must be made as provided in the written agreement between the TPA and the payor, and only for the following purposes:

• (1) remittance to a payor entitled to remittance;

• (2) deposit in an account maintained in the name of the payor;

• (3) transfer to and deposit in a CASA, with claims to be paid as provided in section 1528;

• (4) payment to a group policyholder for remittance to the payor entitled to such remittance;

• (5) payment to the TPA of its earned commissions, fees or charges as set forth in the written agreement between the TPA and the payor;

• (6) remittance of return premium to the person or persons entitled to such return premium; or

• (7) payment to other service providers as authorized by the payor.