2019 US Virgin Islands Code
Title 22 - Insurance
Chapter 60 - Third Party Administrators
§ 1539. Grounds for denial, suspension or revocation of licensure
(a) The Commissioner shall, deny, suspend or revoke the license of a TPA, or shall issue a cease and desist order if the TPA does not have a license if, after notice and opportunity for hearing, the Commissioner finds that the TPA:
(1) is in an unsound financial condition;
(2) is using such methods or practices in the conduct of its business so as to render its further transaction of business in the Virgin Islands hazardous or injurious to insured persons or the public;
(3) has failed to pay any judgment rendered against it in the Virgin Islands within 60 days after the judgment has become final;
(4) has, in the transaction of business under its license, used fraudulent, coercive or dishonest practices, or has demonstrated untrustworthiness or financial irresponsibility; or is not of good personal and business reputation; or
(5) has obtained or attempted to obtain a license through misrepresentation or fraud.
(b) The Commissioner may deny, suspend or revoke the license of a TPA, or may issue a cease and desist order if the TPA does not have a license if, after notice and opportunity for hearing, the Commissioner finds that the TPA:
(1) has violated any lawful rule or order of the Commissioner or any provision of the insurance laws of the Virgin Islands;
(2) has refused to be examined or to produce its accounts, records and files for examination, or if any individual responsible for the conduct of affairs of the TPA, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly 10 percent or more of the voting stock, voting securities or voting interest of the TPA, and any other person who exercises control or influence over the affairs of the TPA, has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to an examination when required by the Commissioner;
(3) has failed to appear without reasonable cause or excuse in response to a subpoena, examination warrant or any other order lawfully issued by the Commissioner;
(4) has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered individuals to accept less than the amount due them or caused covered individuals to employ attorneys or bring suit against the TPA or a payor that it represents to secure full payment or settlement of such claims;
(5) has misappropriated or converted to its own use, or improperly withheld, money required to be held in a fiduciary capacity;
(6) is required under this chapter to have a license and fails at any time to meet any qualification for which issuance of a license may have been refused had the failure then existed and been known to the Commissioner, unless the Commissioner issued a license with knowledge of the ground for disqualification and had the authority to waive it;
(7) has intentionally made a material misstatement on its application for a license;
(8) if any of the individuals responsible for the conduct of its affairs, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly 10 percent or more of its voting stock, voting securities or voting interest; and any other person who exercises control or influence over its affairs has been, within the past three years, convicted of, or has entered a plea of guilty or nolo contendere to a felony without regard to whether adjudication was withheld, unless the person demonstrates to the Commissioner sufficient rehabilitation to warrant the public trust;
(9) has had its license suspended or revoked or its application denied in any of the 50 states, the District of Columbia, or territories of the United States;
(10) is affiliated with and is under the same general management or control as another TPA that transacts business in the Virgin Islands without a license issued under this chapter; or
(11) has failed to file a timely annual report and the required filing fee pursuant to section 1537.
(c) Denial of an application, suspension or revocation of a license, pursuant to subsections (a) and (b) must be by written order sent to the applicant or TPA by certified or registered mail at the address specified in the Commissioner’s records. The order must state the grounds, charges or conduct on which denial, suspension or revocation is predicated upon. The applicant or TPA may make a written request for a hearing not later than 30 days after the postmarked date of the order, if mailed or from the date of receipt, if hand delivered. If a written request for a hearing is not received by the Commissioner within the time specified, the order becomes final 30 days after the date of the order. Upon receipt of the request for a hearing, the Commissioner shall issue an order scheduling:
(1) a specific date for the hearing which may not be less than 20 nor more than 30 days after receipt of the request for a hearing; and
(2) a specific place and time for the hearing.
(d) The Commissioner, in the Commissioner’s discretion, without notice, and before a hearing, may issue an order immediately suspending the license of a TPA, or may issue a cease and desist order if the TPA does not have a license, if the Commissioner finds that one or more of the following circumstances exist:
(1) The TPA is insolvent or impaired;
(2) A proceeding for receivership, conservatorship, rehabilitation or other delinquency proceeding regarding the TPA has been commenced in any state; or
(3) The financial condition or business practices of the TPA otherwise pose an imminent threat to the public health, safety or welfare of the residents of the Virgin Islands.
(e) At the time an order has been issued by the Commissioner in accordance with subsection (d)(1) through (3), the Commissioner shall serve notice to the TPA that the TPA may request a hearing not later than 10 business days after the receipt of the order. If a hearing is requested, the Commissioner shall schedule a hearing not later than 10 business days after receipt of the request. If a hearing is not requested and the Commissioner orders none, the order remains in effect until modified or vacated by the Commissioner.
(f) If the Commissioner finds that one or more grounds exist for the suspension or revocation of a license issued under this chapter, or for a cease and desist order, the Commissioner may, in lieu of or in addition to the suspension, revocation or cease and desist order, impose a fine upon the TPA.
(g) Any TPA whose license is revoked, suspended, or whose application is denied under this section is ineligible to reapply for any license for two years after the date of revocation or suspension of the license or denial of the application. A suspension under this section may be for a period of up to two years.
