2019 US Virgin Islands Code
Title 22 - Insurance
Chapter 60 - Third Party Administrators
§ 1534. Bond requirement for TPAs
(a) Every applicant for a TPA license shall file with the application and maintain while so licensed, a fidelity bond in favor of the Government of the Virgin Islands executed by a surety company and payable to any party injured under the terms of the bond. The bond must be continuous and in one of the following amounts:
(1) for a TPA that maintains a TPATFA but does not maintain a CASA, the greater of $50,000 or 5 percent of contributions and premiums projected to be received or collected in the TPATFA for the forthcoming plan year from Virgin Islands residents, but not to exceed $1,000,000;
(2) for a TPA that maintains a CASA but does not maintain a TPATFA, the greater of $50,000 or 5 percent of the claims and claim expenses projected to be held in the CASA for the forthcoming year to pay claims and claim expenses for Virgin Islands residents, but not to exceed $1,000,000; and
(3) for a TPA that maintains both a TPATFA and a CASA, the greater amount in paragraphs (1) or (2), but not to exceed $1,000,000.
(b) Notwithstanding paragraphs (1), (2), and (3) of subsection (a), upon an administrative finding by the Commissioner that the amounts prescribed in one or more of the paragraphs provide inadequate protection to the public, the Commissioner may, by regulation, prescribe higher amounts. A bond is required of a TPA who maintains or should maintain funds in a fiduciary capacity as set forth in sections 1527, 1528 and 1529, unless the TPA has contracted with the insurer as a TPA and if the plan is fully insured by the insurer on whose behalf the funds are being held.
(c) The bond remains valid until the surety is released from liability by the Commissioner or until the bond is cancelled by the surety. The surety may cancel the bond and be released from further liability upon 30 days” advance written notice to the Commissioner. The cancellation does not affect any liability incurred or accrued under the bond before the end of the 30-day period. Upon receipt of any notice of cancellation, the Commissioner shall immediately notify the licensee of the cancellation.
(d) The license required by section 1533 automatically terminates if the bond required is cancelled or otherwise not valid. Not later than 30 days after cancellation or invalidity of the bond, the TPA shall return the license to the Commissioner for cancellation.
