What is an Illinois Third Party Administrator Bond?
Get to know what this surety bond is for and how to obtain one fast efficiently!
A surety bond is required before the issuance of a third-party administrator license. It will serve a purpose in assuming liability for the failure in duty of the Principal or the licensed third party administrator through a bond claim.
Under the conditions of the surety bond, the third-party administrator must comply with the provisions of the Illinois Insurance Code that are specific to his or her profession.
This includes, but is not limited to, the following:
- Settles claims relating to life, accident, or health benefits
- Collects premiums on behalf of an insurer or plan sponsor
- Pay the number of transactions owed to a company that owns the monies that comes into the possession of the third party administrator
What is the Third Party Administrator Bond amount?
Third-party administrators who maintain a Claims Administration Services Account (CASA)
- $50,000 up to $1,000,000
- The bond amount should be 5% of the projected claims and claims expenses to be held in the CASA for the payment of the claims and claims expenses of Illinois residents for the upcoming year
Third-party administrators who maintain an Administrator Trust Fund (ATF)
- $50,000 up to $1,000,000
- The bond amount should be 5% of the projected receivable contributions and premiums for the upcoming year
Third-party administrators who maintain a Claims Administration Services Account (CASA) and Administrator Trust Fund (ATF)
- $50,000 up to $1,000,000
- 5% of the projected claims and claims expenses to be held in the CASA for the upcoming year
- 5% of the projected receivable contributions and premiums for the upcoming year
How can I get a Third Party Administrator Bond?
STEP 1: Apply for the bond
You need to submit a bond application to us. If you’re ready to apply now, you may do so HERE!
STEP 2: Underwriting
We will ask you for a couple of relevant information needed for the bond. This will include your financial history, business performance history, and your credit score. An expert underwriter will take a thorough look at all those.
STEP 3: Bond execution
Once the underwriter is done with the prequalification process, we will immediately issue the bond and send it to you!
What are the surety bond requirements?
- The surety bond should be issued by a Surety that is authorized to conduct business in the State of Illinois
- The People of the State of Illinois should be named as the Obligee
- The third-party administrator must comply with the provisions of Sections 511.100 – 511.118 of the Illinois Insurance Code as well as the rules and regulations of the Illinois Department of Insurance
- If the third party administrator commits a violation, the aggrieved party will be eligible to file a claim against the bond