INSURANCE
OKLAHOMA 2024 SESSION LAW SERVICE Fifty-Ninth Legislature, 2024 Second Regular Session
2024 Okla. Sess. Law Serv. Ch. 345 (S.B. 542) (WEST)
OKLAHOMA 2024 SESSION LAW SERVICE
Fifty-Ninth Legislature, 2024 Second Regular Session
CHAPTER 345
S.B. No. 542
INSURANCE
An Act relating to the Insurance Department; amending 36 O.S. 2021, Section 109, which relates to required compliance under the insurance code; requiring certain persons and organizations to furnish adequate response within certain timeframe; requiring certain information be kept current; amending 36 O.S. 2021, Section 307, which relates to the duties of the Insurance Commissioner; modifying language concerning the Patient's Right to Pharmacy Choice Commission; amending 36 O.S. 2021, Section 307.1, which relates to rules and regulations adopted by the Commissioner; clarifying what may be adopted; amending 36 O.S. 2021, Sections 312A, 313, and 319, which relate to civil penalties and fees, requirements for orders and notices, and hearings; modifying language concerning the Patient's Right to Pharmacy Choice Commission; permitting the imposition of certain penalties; establishing certain powers with the Insurance Commissioner; amending 36 O.S. 2021, Section 332, which relates to general duties and powers of the Commissioner; modifying language concerning the Patient's Right to Pharmacy Choice Commission; clarifying on what grounds certain examinations and investigations may be conducted; amending 36 O.S. 2021, Section 350, which relates to filings and payments in electronic format; directing for inclusion of certain payment; amending 36 O.S. 2021, Section 606.1, which relates to requirements and procedures for certain foreign insurers to become domestic insurers; modifying hearing requirements; providing inclusive language; amending 36 O.S. 2021, Section 607, as amended by Section 1, Chapter 152, O.S.L. 2022 (36 O.S. Supp. 2023, Section 607), which relates to general qualifications to transact insurance; requiring certain information be kept on file with the Commissioner; amending 36 O.S. 2021, Section 924.1, which relates to automobile or motorcycle accident prevention course; modifying language; amending 36 O.S. 2021, Section 1641, which relates to the Commissioner's rulemaking authority; modifying notice and hearing requirements; amending 36 O.S. 2021, Section 6124.1, which relates to transfer of prepaid funeral benefit permits; clarifying Commissioner's duties; defining term; amending 36 O.S. 2021, Section 6652, which relates to definitions used in the Hospital and Medical Services Utilization Review Act; providing clarifying language; repealing 36 O.S. 2021, Sections 107.3, 907, and 908; providing for codification; and providing an effective date.
SUBJECT: Insurance
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
<< OK ST T. 36 § 109 >>
SECTION 1. AMENDATORY 36 O.S. 2021, Section 109, is amended to read as follows:
Section 109. A. No person shall transact a business of insurance in Oklahoma without complying with the applicable provisions of this Code.
B. Any person and organization subject to the jurisdiction of the Insurance Commissioner, upon receipt of any inquiry from the Commissioner shall, within twenty (20) calendar days from the date of receipt of the inquiry, furnish the Commissioner with an adequate response to the inquiry. Any inquiry or response subject to this subsection shall be delivered electronically.
C. All persons and organizations subject to the jurisdiction of the Commissioner shall keep any contact information deemed necessary by the Commissioner on file with the Insurance Department. Contact information shall be kept current and be submitted electronically in the manner and form prescribed by the Commissioner, along with any applicable fees. Any change in contact information shall be submitted within twenty (20) days of the change.
<< OK ST T. 36 § 307 >>
SECTION 2. AMENDATORY 36 O.S. 2021, Section 307, is amended to read as follows:
Section 307. The Insurance Commissioner shall be charged with the duty of administration and enforcement of the provisions of the Oklahoma Insurance Code, of any requirements placed on an insurance company pursuant to the Oklahoma Statutes and determining the duties assigned to the Patient's Right to Pharmacy Choice Commission. The Commissioner shall have jurisdiction over complaints against all persons engaged in the business of insurance, and shall hear all matters either in person, by authorized disinterested employees or by hearing examiners appointed by the Commissioner for that purpose and not specifically addressed otherwise in this act. It shall be the duty of the Commissioner to file and safely keep all books and papers required by law to be filed with the Insurance Department, and to keep and preserve in permanent form a full record of proceedings including a concise statement of the conditions of such insurers and other entities reported and examined by the Department and its examiners. The Commissioner shall, annually, at the earliest practicable date after returns are received from the several authorized insurers and other organizations, make a report to the Governor of the affairs of the office of the Commissioner, which report shall contain a tabular statement and synopsis of the several statements, as accepted by the Commissioner, which shall include with respect to each insurance company the admitted assets, liabilities except capital, capital and surplus, Oklahoma premium income, amount of claims paid in Oklahoma and such other matters as may be of benefit to the public. The Commissioner shall, on a quarterly basis, report to the Pharmacy Choice Commission an accounting of matters relating to pharmacy benefits managers including, but not limited to, the number and types of complaints:
The Commissioner may educate consumers and make recommendations regarding the subject of insurance in this state, and shall set forth in a statement the various sums received and disbursed by the Department, from and to whom and for what purpose. Such report shall be published by and subject to the order of the Commissioner. The Commissioner shall, upon retiring from office, deliver to the qualified successor all furniture, records, papers and property of the office.
<< OK ST T. 36 § 307.1 >>
SECTION 3. AMENDATORY 36 O.S. 2021, Section 307.1, is amended to read as follows:
Section 307.1. The Insurance Commissioner may adopt reasonable bulletins, orders, rules and regulations for the implementation and administration of the provisions of the Insurance Code and other statutes for which the Commissioner has jurisdiction.
<< OK ST T. 36 § 312A >>
SECTION 4. AMENDATORY 36 O.S. 2021, Section 312A, is amended to read as follows:
Section 312A. Civil penalties and fees imposed by the Insurance Commissioner or the Patient's Right to Pharmacy Choice Commission pursuant to Oklahoma law may be enforced in the same manner in which civil judgments may be enforced. All final orders of the Insurance Commissioner or Pharmacy Choice Commission imposing administrative charges, fees, civil penalties, restitution or fines may be recorded in the office of the Clerk of the District Court of Oklahoma County and, upon such recording, all appropriate writs and process shall issue and shall be enforced by the judges of said court upon application.
<< OK ST T. 36 § 313 >>
SECTION 5. AMENDATORY 36 O.S. 2021, Section 313, is amended to read as follows:
Section 313. A. Orders and notices of the Insurance Commissioner or Patient's Right to Pharmacy Choice Commission shall be in writing and shall be signed by either the Commissioner, an authorized employee of the Insurance Department, or an independent hearing examiner or the Pharmacy Choice Commission. A final order signed by an independent hearing examiner, or the chair or vice-chair of the Pharmacy Choice Commission, after hearing, shall be final agency action, notwithstanding the provisions of Section 311 of Title 75 of the Oklahoma Statutes.
B. In the exercise of the powers and the performance of the duties enumerated in this title, the Commissioner and the Pharmacy Choice Commission shall comply with the procedures of the Administrative Procedures Act. Any conflict between the provisions of Title 75 of the Oklahoma Statutes and of this title shall be resolved in favor of the provisions of this title.
<< OK ST T. 36 § 319 >>
SECTION 6. AMENDATORY 36 O.S. 2021, Section 319, is amended to read as follows:
Section 319. A. In conducting any hearing pursuant to the Insurance Code, the Insurance Commissioner may appoint an independent hearing examiner who shall sit as a quasi-judicial officer. The ordinary fees and costs of such hearing examiner shall be assessed by the hearing examiner against the respondent, unless the respondent is the prevailing party. Within thirty (30) days after termination of the hearing or of any rehearing thereof or reargument thereon, unless such time is extended by stipulation, a final order shall be issued.
SECTION 7. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 322 of Title 36, unless there is created a duplication in numbering, reads as follows:
<< OK ST T. 36 § 322 >>
The Insurance Commissioner may, if the Commissioner finds that any person or organization has violated the provisions of any statute, rule, bulletin, or order for which the Commissioner has jurisdiction, impose a penalty of not more than Five Thousand Dollars ($5,000.00) for each such violation. Such penalties may be in addition to any other penalty provided by law.
No penalty shall be imposed except upon a written order of the Commissioner or the appointed independent hearing examiner, stating the findings of the Commissioner or the appointed independent hearing examiner after notice and opportunity for a hearing in accordance with Article II of the Administrative Procedures Act.
SECTION 8. NEW LAW A new section of law to be codified in the Oklahoma Statutes as Section 323 of Title 36, unless there is created a duplication in numbering, reads as follows:
<< OK ST T. 36 § 323 >>
In addition to any powers herein before expressly enumerated in this law, the Insurance Commissioner shall have full power and authority to enforce by regulations, orders, bulletins or otherwise all and singular, the provisions of this law, and the full intent thereof. In particular the Commissioner shall have the authority and power:
1. To examine all records of persons or organizations falling under the jurisdiction of the Commissioner and to require the same to furnish under oath such information as the Commissioner may deem necessary for the administration of this law.  The expense of such examination shall be paid by the insurer or advisory organization examined. In lieu of such examination, the Commissioner may, in the discretion of the Commissioner, accept a report of examination made by any other insurance supervisory authority;
2. To make and enforce such reasonable bulletins, orders, rules and regulations as may be necessary in making this law effective, but such bulletins, orders, rules and regulations shall not be contrary to or inconsistent with the provisions of this law; and
3. To issue an order in accordance with Article II of the Administrative Procedures Act to all parties in interest requiring any person or organization falling under the jurisdiction of the Commissioner to cease and desist from any unfair or unreasonable practice.
<< OK ST T. 36 § 332 >>
SECTION 9. AMENDATORY 36 O.S. 2021, Section 332, is amended to read as follows:
Section 332. A. The powers and duties of the Patient's Right to Pharmacy Choice Commission shall be created by the Insurance Commissioner and set forth in the applicable provisions of the Insurance Code.
1. The Commissioner shall maintain a list of technicians qualified pursuant to rules adopted by the Commissioner who are proficient in the lines of insurance being reviewed. Upon request of the Commissioner, the Commissioner shall employ the next available technician in rotation on the list, proficient in the line or lines of insurance being reviewed. The Commissioner may deviate from the list when employing technicians for loss cost filings pursuant to Section 901.5 of this title.
2. All reasonable expenses incurred in such filing review shall be paid by the insurer or advisory organization making the filing.
1. Any insurer or pharmacy benefits manager company examined pursuant to the provisions of this section shall pay all reasonable charges incurred in such examination including the actual expense of the Commissioner, the Pharmacy Choice Commission and the expenses and compensation of the authorized representative of the Commissioner and the expense and compensation of assistants and examiners employed therein.
2. All expenses incurred in such examination shall be verified by affidavit and a copy shall be filed and kept in the office of the Insurance Commissioner.
<< OK ST T. 36 § 350 >>
SECTION 10. AMENDATORY 36 O.S. 2021, Section 350, is amended to read as follows:
Section 350. Notwithstanding any other provision of law that requires a particular form and associated payment to be filed with the Insurance Department in paper form, or to be mailed or hand-delivered to the Insurance Department, the Insurance Commissioner may, by appropriate order, require that all filings of that specific type be filed or delivered in an electronic format. Electronic filings shall include payment of any transaction, filing, or other applicable fees.
<< OK ST T. 36 § 606.1 >>
SECTION 11. AMENDATORY 36 O.S. 2021, Section 606.1, is amended to read as follows:
Section 606.1. A. 1. Any foreign or alien insurer which is organized under the laws of any other jurisdiction for the purpose of transacting insurance may become a domestic insurer by complying with all of the requirements of law relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a location in this state, provided, the Insurance Commissioner approves the insurer's application for redomestication following a public hearing. Said Such domestic insurer will be entitled to like certificates and licenses to transact business in this state and shall be subject to the authority and jurisdiction of this state.
2. The Commissioner shall approve an insurer's application to redomesticate unless, after a public hearing thereon, he or she finds that:
a. the insurer cannot comply with all the requirements of law relative to the organization and licensing of a domestic insurer,
b. after redomestication, the insurer would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed,
c. the effect of the redomestication would be substantially to lessen competition in insurance in this state or tend to create a monopoly therein,
d. the financial condition of the insurer is such as might jeopardize or prejudice the interest of its policyholders or the state and is not in the public interest, or
e. the competence, experience and integrity of those persons who control the operation of the insurer are such that it would not be in the interest of the policyholders, the public or the state to permit the redomestication.
3. The insurer's application to redomesticate shall contain information acceptable to the Commissioner concerning its financial condition, its plan of operation for the succeeding three (3) years, and information concerning the competence, experience and integrity of those persons who control the operation of the insurer.
4. If the Commissioner determines that grounds exist to disapprove the application to redomesticate, a public hearing shall be held. The application for redomestication shall be deemed approved unless the Commissioner has, within thirty (30) days after the conclusion of the hearing, entered his or her order disapproving the redomestication.
B. Any domestic insurer may, upon the approval of the Insurance Commissioner, transfer its domicile to any other state in which it is admitted to transact the business of insurance, and upon such a transfer, shall cease to be a domestic insurer, and shall be admitted to this state if qualified as a foreign insurer. The Commissioner shall approve any such proposed transfer unless he or she shall determine such transfer is not in the interest of the policyholders of this state.
C. The certificate of authority, agents appointments and licenses, rates, and other items which the Insurance Commissioner allows, in his or her discretion, which are in existence at the time any insurer licensed to transact the business of insurance in this state transfers its corporate domicile to this or any other state by merger, consolidation or any other lawful method shall continue in full force and effect upon such transfer if such insurer remains duly qualified to transact the business of insurance in this state. All outstanding policies and other contracts of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the Commissioner. Every transferring insurer shall file new policy forms with the Commissioner on or before the effective date of the transfer, but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the Commissioner. However, every such transferring insurer shall notify the Commissioner of the details of the proposed transfer, and shall file promptly, any resulting amendments to corporate documents required to be filed with the Commissioner.
D. The Insurance Commissioner may promulgate rules and regulations to carry out the purposes of this section.
<< OK ST T. 36 § 607 >>
SECTION 12. AMENDATORY 36 O.S. 2021, Section 607, as amended by Section 1, Chapter 152, O.S.L. 2022 (36 O.S. Supp. 2023, Section 607), is amended to read as follows:
Section 607. A. To qualify for and hold authority to transact insurance in Oklahoma an insurer must be otherwise in compliance with the provisions of this the Oklahoma Insurance Code and with its charter powers, and must be an incorporated stock insurer, an incorporated mutual insurer, a mutual benefit association, a nonprofit hospital service and medical indemnity corporation, a farmers mutual fire insurance association, a Lloyd's association or a reciprocal insurer, of the same general type as may be formed as a domestic insurer under this Code; except, that no foreign or alien insurer shall be authorized to transact insurance in Oklahoma which does not maintain reserves as required by Article 15 of this Code applicable to the kind or kinds of insurance transacted by such insurer.
B. No certificate of authority or license to transact any kind of direct insurance business in this state shall be issued, renewed or continued in effect, to any domestic, foreign or alien insurance company or other insurance entity which is owned or financially controlled in whole or in part by another state of the United States, or by a foreign government, or by any political subdivision of either, or which is an agency of any such state, government or subdivision.
C. A domestic, foreign, or alien insurance company, or entity thereof which is owned or financially controlled in whole or in part by another state of the United States, a foreign government, or any political subdivision thereof, or which is an agency of any such state, government, or subdivision may apply only for a certificate of authority as a reinsurer. Such insurance company or entity shall establish and maintain a regional home office in this state, in a building owned or leased by the insurer, that employs Oklahoma employees as defined pursuant to Section 625.1 of this title. Insurance companies or entities obtaining a certificate of authority under this subsection shall maintain security deposits pursuant to this code Code in a bank as defined pursuant to Section 102 of Title 6 of the Oklahoma Statutes.
D. Any insurance company or other insurance entity which is owned or financially controlled in whole or in part by any federally recognized American Indian tribe or nation may apply for a certificate of authority or license to transact insurance business in this state and will not be subject to subsection B of this section.
E. Insurers under the jurisdiction of the Insurance Commissioner shall keep any contact information deemed necessary by the Commissioner on file with the Insurance Department. Contact information shall be kept current and submitted electronically in the manner and form prescribed by the Commissioner, along with any applicable fees. Any change in contact information shall be submitted within twenty (20) days of the change.
<< OK ST T. 36 § 924.1 >>
SECTION 13. AMENDATORY 36 O.S. 2021, Section 924.1, is amended to read as follows:
Section 924.1. A. Any schedule of rates or rating plan for automobile or motorcycle liability and physical damage insurance submitted to or filed with the State Insurance Commissioner shall provide for an appropriate reduction in premium charges for those insured persons for a three-year period after successfully completing a motor vehicle accident prevention course which shall include but not be limited to an automobile or motorcycle accident prevention course as approved by the insurance company of the policyholder. Provided, however, there shall be no reduction in premiums for a self-instructed course or a course which does not provide for actual classroom or field driving instruction for a minimum number of hours as provided in subsection E of this section. Provided further, there shall be no reduction in premiums for a course attended pursuant to a court order in connection with a motor vehicle violation or an alcohol- or drug-related offense.
B. All insurance companies writing automobile or motorcycle liability and physical damage insurance in this state shall allow an appropriate reduction in premium charges to all eligible persons pursuant to this section.
C. Upon successfully completing the approved course, each participant shall be issued by the sponsoring agency of the course, a certificate which shall be the basis of qualification for the discount on insurance.
D. Each participant shall successfully complete an approved course each three (3) years to continue to be eligible for the discount on insurance.
E. An approved course pursuant to this section shall provide at least six (6) hours of instruction.
<< OK ST T. 36 § 1641 >>
SECTION 14. AMENDATORY 36 O.S. 2021, Section 1641, is amended to read as follows:
Section 1641. The Commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations and orders as shall be necessary to carry out the provisions of this act Section 1631 et seq. of this title.
<< OK ST T. 36 § 6124.1 >>
SECTION 15. AMENDATORY 36 O.S. 2021, Section 6124.1, is amended to read as follows:
Section 6124.1. A. No prepaid funeral benefit permit shall be transferable from one organization to another except as provided in this section. The selling organization shall notify the Insurance Commissioner at least forty-five (45) days prior to transfer of ownership. Notification shall be in a form provided by the Insurance Commissioner and shall contain at a minimum the following information:
1. The name of the acquiring organization;
2. The date the acquiring organization will take control of the funeral establishment;
3. A listing of all unrealized prepaid funeral benefit contracts funded by insurance assignments;
4. A listing of all unrealized prepaid funeral benefit contracts funded by trusts;
5. A detailed description of existing trusts to include, but not be limited to, the name of the contract holder and the trust value per contract; and
6. Any other information the Insurance Commissioner may request.
B. The Insurance Commissioner may waive the notice requirement provided for in subsection A of this section upon good cause shown.
C. The acquiring organization shall make application for a permit at least thirty (30) days prior to the transfer of ownership. Approval is contingent upon the organization receiving an establishment license as provided for in Sections 395.1 through 396.33 of Title 59 of the Oklahoma Statutes. The application shall include an assumption agreement executed by the acquiring organization in a form provided by the Insurance Commissioner.
D. The acquiring organization shall be issued a prepaid funeral benefit permit prior to the relinquishment of control of the trust by the selling organization. The acquiring organization shall not access funds held in the trust until authorization has been given by the Insurance Commissioner.
E. Upon good cause shown, the Insurance Commissioner may deny transfer of the trust from the selling organization to the acquiring organization.
F. The Insurance Commissioner may assume the role of acting trust conservator as a means of safeguarding the rights and interests of the individual contract holder holders or purchasers, their beneficiaries, successors, or personal representatives, or whenever necessary to protect the public welfare. The organization may make application to the Insurance Commissioner to draw down funds upon fulfillment of the prepaid funeral service contract.
G. Whenever a prepaid funeral benefit permit holder refuses to submit the books, records, papers and instruments of the prepaid funeral benefit contracts to the examination and inspection of the assistants or examiners of the Insurance Commissioner, or refuses or neglects to establish or maintain a prepaid funeral benefit permit in accordance with the requirements of the Prepaid Funeral Benefits Act within ninety (90) days after a written demand to establish or maintain a prepaid funeral benefit permit is made by the Commissioner, or in any manner obstructs or interferes with the examination of its prepaid funeral benefit contracts or refuses to be examined on oath concerning any of the affairs of its prepaid funeral benefit contracts, or for any other grounds listed in Article 18 or 19 of this title, the Commissioner may make application for receivership in the manner of a domestic insurer or take any other action pursuant to Articles 18 and 19, Sections 1901 through 1920 of this title.
H. The Insurance Commissioner may prescribe rules concerning matters incidental to this section.
I. For the purposes of Sections 6121 through 6136.18 of this title, “personal representative” means the person or persons designated by the purchaser of the contract for prepaid funeral benefits as having rights of ownership and control to the prepaid funds upon death of the purchaser; the guardian, executor, or the personal representative of the estate of the purchaser; or the claiming successor or successors establishing lawful right to the prepaid funds in accordance with Section 393 of Title 58 of the Oklahoma Statutes.
<< OK ST T. 36 § 6652 >>
SECTION 16. AMENDATORY 36 O.S. 2021, Section 6652, is amended to read as follows:
Section 6652. A. No vehicle protection product may be sold or offered for sale in this state unless the seller, warrantor and administrator, if any, comply with the provisions of the Vehicle Protection Product Act.
B. Vehicle protection product warrantors and related vehicle protection product sellers and warranty administrators complying with the Vehicle Protection Product Act are not required to comply with and are not subject to any other provisions of the Oklahoma Insurance Code.
C. Service Licensed service contract providers who may sell vehicle protection products and are licensed motor vehicle ancillary protection products under the Service Warranty Act in Title 15 of the Oklahoma Statutes are and such sales shall not be subject to the requirements of the Vehicle Protection Product Act and sales. Licensed service contract providers may also be registered under the Vehicle Protection Product Act. Sales of the vehicle protection products under the Vehicle Protection Product Act are exempt from the requirements of the Service Warranty Act.
D. Warranties, indemnity agreements and guarantees that are not provided as a part of a vehicle protection product are not subject to the provisions of the Vehicle Protection Product Act.
<< Repealed: OK ST T. 36 § 107.3 >>
SECTION 17. REPEALER 36 O.S. 2021, Section 107.3, is hereby repealed.
<< Repealed: OK ST T. 36 § 907 >>
SECTION 18. REPEALER 36 O.S. 2021, Section 907, is hereby repealed.
<< Repealed: OK ST T. 36 § 908 >>
SECTION 19. REPEALER 36 O.S. 2021, Section 908, is hereby repealed.
SECTION 20. This act shall become effective November 1, 2024.
Approved May 28, 2024.
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