The Office of General Counsel issued the following informal opinion on November 5, 2001, representing the position of the New York State Insurance Department.
Re: Third Party Administrators
Question Presented:
Are "third party administrators" required to be licensed or registered in New York State?
Conclusion:
The Department does not issue a license that is denominated a "third party administrator" license, nor are there registration requirements under the Insurance Law with regard to "third party administrators". However, an entity that engages in activities that would require licensing (e.g., acting as an insurer, agent, broker, or adjuster), or registration (e.g., service contract providers, purchasing groups and risk retention groups, among others), must obtain the appropriate license from, or register with, the Insurance Department.
Facts:
The inquiry contains no specific facts.
Analysis:
The Insurance Law does not specifically define "third party administrator", and does not regulate activities of "third party administrators" as such. However, an entity that engages in activities that would require licensing (e.g., acting as an insurer, agent, broker, or adjuster), or registration (e.g., service contract providers, purchasing groups and risk retention groups, among others), must obtain the appropriate license from, or register with, the Insurance Department.
The inquiry did not describe the specific nature of the services that the "third party administrator" would be performing, therefore, the Department can not advise as to whether licensing or registration is required. Particular information concerning the various licenses issued, and requirements for registration, are contained in the Insurance Law and the Departments Regulations. The Department will provide comment upon submission of a legal analysis applicable to the particular activity proposed by the "third party administrator".
For further information you may contact Senior Attorney Sally Geisel at the New York City Office.