Senate Bill text for SB0295

SENATE BILL 295

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Dede Feldman

AN ACT

RELATING TO PRESCRIPTION DRUGS; ENACTING THE PHARMACY BENEFITS MANAGER REGULATION ACT; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 14 of this act may be cited as the "Pharmacy Benefits Manager Regulation Act".

Section 2. [NEW MATERIAL] DEFINITIONS.--As used in the Pharmacy Benefits Manager Regulation Act:

A. "covered entity" means a nonprofit hospital or medical service corporation, health insurer, health benefit plan or health maintenance organization, a health program administered by the state as a provider of health coverage; or an employer, labor union or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state. "Covered entity" does not include a self-funded plan that is exempt from state regulation pursuant to the Employee Retirement Income Security Act of 1974, a plan issued for coverage for federal employees or a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, medicare supplement, disability income, long-term care or other limited benefit health insurance policies and contracts;

B. "covered individual" means a member, participant, enrollee, contract holder, policy holder or beneficiary of a covered entity who is provided health coverage by the covered entity and includes a dependent or other person provided health coverage through a policy, contract or plan for a covered individual;

C. "maintenance drug" means a drug prescribed by a prescribing practitioner authorized to prescribe drugs and used to treat a medical condition for a period greater than thirty days;

D. "medicare advantage plan" or "MA-PD" means a prescription drug program authorized pursuant to Part C of Title 18 of the federal Medicare Modernization Act that provides qualified prescription drug coverage;

E. "pharmacist" means an individual licensed as a pharmacist by the board of pharmacy;

F. "pharmacy" means a licensed place of business where drugs are compounded or dispensed and pharmacist services are provided;

G. "pharmacy benefits manager" means a person or a wholly or partially owned or controlled subsidiary of a person that provides claims administration, benefit design and management, pharmacy network management, negotiation and administration of product discounts, rebates and other benefits accruing to the pharmacy benefits manager or other prescription drug or device services to third parties, but "pharmacy benefits manager" does not include licensed health care facilities, pharmacies, licensed health care professionals, insurance companies, unions, health maintenance organizations, a medicare advantage plan or a prescription drug plan;

H. "prescription drug plan" or "PDP" means prescription drug coverage that is offered pursuant to a policy, contract or plan that has been approved as specified in 42 CFR Part 423 and that is offered by a prescription drug plan sponsor that has a contract with the federal centers for medicare and medicaid services of the United States department of health and human services; and

I. "superintendent" means the superintendent of insurance.

Section 3. [NEW MATERIAL] LICENSE.--

A. A person shall not operate as a pharmacy benefits manager unless licensed by the superintendent pursuant to Section 59A-12A-3 NMSA 1978 and in accordance with the Pharmacy Benefits Manager Regulation Act and applicable federal and state laws.

B. The superintendent may suspend or revoke a license issued to a pharmacy benefits manager or deny an application for a license or renewal of a license if:

(1) the pharmacy benefits manager is operating materially in contravention of:

(a) its application or other information submitted as a part of its application for a license or renewal of its license; or

(b) a condition imposed by the superintendent with respect to the issuance or renewal of its license;

(2) the pharmacy benefits manager has failed to continuously meet or substantially comply with the requirements for issuance of a license;

(3) the continued operation of the pharmacy benefits manager adversely affects the public health and safety; or

(4) the pharmacy benefits manager has failed to substantially comply with applicable state or federal laws or rules.

C. If the certificate of authority of a pharmacy benefits manager is revoked, the manager shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs and conduct no further business except as may be essential to the orderly conclusion of its affairs. The superintendent may permit further operation of the pharmacy benefits manager if the superintendent finds it to be in the best interest of patients to obtain pharmacist services.

Section 4. [NEW MATERIAL] RULES.--The superintendent shall adopt rules consistent with the Pharmacy Benefits Manager Regulation Act regulating pharmacy benefits managers with regard to all business and financial issues.

Section 5. [NEW MATERIAL] PHARMACY BENEFITS MANAGER CONTRACTS.--

A. A pharmacy benefits manager that contracts with a pharmacy or pharmacist to provide pharmacist services shall inform the pharmacy in writing of the number of, and other relevant information concerning, patients to be served under the contract. There shall be a separate contract with each independent pharmacy or pharmacy organization for each of the pharmacy benefits manager's provider networks. Contracts providing for indemnity of the pharmacy shall be separate from contracts providing for cash discounts. A pharmacy benefits manager shall not require that a pharmacy participate in one contract in order to participate in another contract.

B. Each pharmacy benefits manager shall provide to the pharmacies, at least thirty days prior to its execution, a contract written in plain English.

C. A contract between a pharmacy benefits manager and a pharmacy shall provide specific time limits for the pharmacy benefits manager to pay the pharmacy for services rendered.

D. A pharmacy benefits manager contract shall not mandate that any pharmacy change a patient's maintenance drug unless the prescribing practitioner so orders.

E. Before terminating a pharmacy from a pharmacy benefits manager's provider network, the pharmacy benefits manager shall give the pharmacy a written explanation of the reason for the termination thirty days before the actual termination unless the termination is taken in reaction to:

(1) loss of a professional or facility license;

(2) loss of professional liability insurance; or

(3) conviction of fraud or misrepresentation.

F. A pharmacy shall not be held responsible for acts or omissions of a pharmacy benefits manager. A pharmacy benefits manager shall not be held responsible for the acts or omissions of a pharmacy.

Section 6. [NEW MATERIAL] DISCLOSURE REQUIRED.--

A. A covered entity may request that any pharmacy benefits manager with which it has a pharmacy benefits management services contract disclose to the covered entity the amount of all rebate revenues and the nature, type and amounts of all other revenues that the pharmacy benefits manager receives from each pharmaceutical manufacturer or labeler with whom the pharmacy benefits manager has a contract. The pharmacy benefits manager shall disclose in writing:

(1) the aggregate amount, and for a list of drugs to be specified in the contract, the specific amount, of all rebates and other retrospective utilization discounts received by the pharmacy benefits manager directly or indirectly, from each pharmaceutical manufacturer or labeler that are earned in connection with the dispensing of prescription drugs to covered individuals of the health benefit plans issued by the covered entity or for which the covered entity is the designated administrator;

(2) the nature, type and amount of all other revenue received by the pharmacy benefits manager directly or indirectly from each pharmaceutical manufacturer or labeler for any other products or services provided to the pharmaceutical manufacturer or labeler by the pharmacy benefits manager with respect to programs that the covered entity offers or provides to its enrollees; and

(3) any prescription drug utilization information requested by the covered entity or by the human services department relating to covered individuals.

B. A pharmacy benefits manager shall provide such information requested by the covered entity or by the human services department within thirty days of receipt of the request. If requested, the information shall be provided annually. The contract entered into between the pharmacy benefits manager and the covered entity shall set forth any fees to be charged for drug utilization reports requested by the covered entity.

Section 7. [NEW MATERIAL] CONSUMER CONTACT LIMITED.--A pharmacy benefits manager, unless authorized by the terms of its contract with a covered entity, shall not contact a covered individual without express written permission of the covered entity.

Section 8. [NEW MATERIAL] CONFIDENTIALITY.--Except for utilization information, a covered entity shall maintain any information disclosed in response to a request pursuant to Section 6 of the Pharmacy Benefits Manager Regulation Act as confidential and proprietary information and shall not use such information for any other purpose or disclose such information to any person except as provided in that act or in the pharmacy benefits manager services contract between the parties. A covered entity that discloses information in violation of this section is subject to an action for injunctive relief and is liable for any damages that are the direct and proximate result of such disclosure. Nothing in this section prohibits a covered entity from disclosing confidential or proprietary information, upon request, to the superintendent. Information obtained by the superintendent is confidential and privileged and is not open to public inspection or disclosure.

Section 9. [NEW MATERIAL] AUDITS.--The covered entity may have the pharmacy benefits manager's books and records related to the rebates or other information described in Paragraphs (1) through (3) of Subsection A of Section 6 of the Pharmacy Benefits Manager Regulation Act to the extent the information related directly or indirectly to such covered entity's contract, audited in accordance with the terms of the contract between the parties, unless the parties have not expressly provided for audit rights and the pharmacy benefits manager has advised the covered entity that other reasonable options are available and, subject to negotiation, the covered entity may have such books and records audited as follows:

A. audits may be conducted no more frequently than once in each twelve-month period upon not less than thirty business days' written notice to the pharmacy benefits manager;

B. the covered entity may select an independent firm to conduct such audit, and such independent firm shall sign a confidentiality agreement with the covered entity and the pharmacy benefits manager ensuring that all information obtained during the audit will be kept confidential and that the auditing firm shall not use, disclose or otherwise reveal any such information in any manner or form to any person except as otherwise permitted under the confidentiality agreement; the covered entity shall treat all information obtained as a result of the audit as confidential and shall not use or disclose such information except as may be otherwise permitted under the terms of the contract between the covered entity and the pharmacy benefits manager or if ordered by a court of competent jurisdiction for good cause shown; and

C. the audit shall be conducted at the pharmacy benefits manager's office where such records are located, during normal business hours, without undue interference with the pharmacy benefits manager's business activities and in accordance with reasonable audit procedures.

Section 10. [NEW MATERIAL] DRUG SUBSTITUTION.--If a pharmacy benefits manager wishes to make a substitution for a prescription drug prescribed for a covered entity, substitution of a prescription drug shall be in accordance with the Drug Product Selection Act.

Section 11. [NEW MATERIAL] ENFORCEMENT.--

A. Enforcement of the Pharmacy Benefits Manager Regulation Act shall be the responsibility of the superintendent. The superintendent shall take action to bring a non-complying pharmacy benefits manager into full compliance with the Pharmacy Benefits Manager Regulation Act or shall terminate the pharmacy benefits manager's license. The superintendent shall adopt procedures for formal investigation of complaints concerning the failure of a pharmacy benefits manager to comply with the Pharmacy Benefits Manager Regulation Act.

B. If the superintendent has reason to believe that there may have been a violation of the Pharmacy Benefits Manager Regulation Act, the superintendent shall issue and serve upon the pharmacy benefits manager a statement of the charges and a notice of a hearing. The hearing shall be held at a time and place fixed in the notice, not less than thirty days after the notice is served. At the hearing, the pharmacy benefits manager shall have an opportunity to be heard and to show cause why the superintendent should not:

(1) issue a cease and desist order against the pharmacy benefits manager; or

(2) take other action, including termination of the pharmacy benefits manager's license.

Section 12. [NEW MATERIAL] REMEDY.--A covered entity may bring a civil action to enforce the provisions of the Pharmacy Benefits Manager Regulation Act or to seek civil damages for the violation of its provisions.

Section 13. [NEW MATERIAL] PHARMACY BENEFITS MANAGER FUND--CREATED.--The "pharmacy benefits manager fund" is created in the state treasury. Fees and penalties assessed pursuant to the Pharmacy Benefits Manager Regulation Act shall be deposited in the fund. Money in the fund is appropriated to the insurance division of the public regulation commission to administer the Pharmacy Benefits Manager Regulation Act. Money in the fund shall not revert to the general fund or any other fund. Money in the fund may be expended pursuant to vouchers signed by the superintendent on warrants signed by the secretary of finance and administration.

Section 14. [NEW MATERIAL] FEE DISTRIBUTION.--Fees imposed pursuant to Subsection Z of Section 59A-6-1 NMSA 1978 shall be distributed as follows:

A. fifty percent to the pharmacy benefits manager fund for expenditure by the insurance division of the public regulation commission for administration of the Pharmacy Benefits Manager Regulation Act; and

B. fifty percent to the human services department for development and maintenance of the preferred drug list as required by Section 27-2-12.13 NMSA 1978.

Section 15. A new section of Chapter 59A, Article 1 NMSA 1978 is enacted to read:

"[NEW MATERIAL] DEFINITION.--"Pharmacy benefits manager" means a person or a wholly or partially owned or controlled subsidiary of a pharmacy benefits manager or an administrator that provides claims administration, benefit design and management, pharmacy network management, negotiation and administration of product discounts, rebates and other benefits accruing to the pharmacy benefits manager or other prescription drug or device services to third parties, but "pharmacy benefits manager" does not include licensed health care facilities, pharmacies, licensed health care professionals, insurance companies, unions, health maintenance organizations, a medicare advantage plan or a prescription drug plan."

Section 16. Section 59A-6-1 NMSA 1978 (being Laws 1984, Chapter 127, Section 101, as amended) is amended to read:

"59A-6-1. FEE SCHEDULE.--The superintendent shall collect the following fees:

A. insurer's certificate of authority -

(1) filing application for certificate of authority, and issuance of certificate of authority, if issued, including filing of all charter documents, financial statements, service of process, power of attorney, examination reports and other documents included with and part of the application. . . . . . . . . . . . . . . . . . . . . .$1,000.00

(2) annual continuation of certificate of authority, per kind of insurance, each year

continued. . . . . . . . . . . . . . . . . . . . . . . . 200.00

(3) reinstatement of certificate of authority (Section 59A-5-23 NMSA 1978). . . . . . . . . . . . . . .150.00

(4) amendment to certificate of

authority. . . . . . . . . . . . . . . . . . . . . . . . 200.00

B. charter documents - filing amendment to any charter document (as defined in Section 59A-5-3

NMSA 1978). . . . . . . . . . . . . . . . . . . . . . . . 10.00

C. annual statement of insurer,

filing. . . . . . . . . . . . . . . . . . . . . . . . . .200.00

D. service of process, acceptance by superintendent and issuance of certificate of service, where issued. . . 10.00

E. agents' licenses and appointments -

(1) filing application for original agent license and issuance of license, if issued. . . . . . . . 30.00

(2) appointment of agent -

(a) filing appointment, per kind of insurance, each insurer. . . . . . . . . . . . . . . . . .20.00

(b) continuation of appointment, each insurer, each year continued. . . . . . . . . . . . . . . 20.00

(3) variable annuity agent's license -

(a) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . 30.00

(b) continuation of appointment each

year. . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00

(4) temporary license as to life and health insurance or both. . . . . . . . . . . . . . . . . . . . .30.00

(a) as to property insurance. . . .30.00

(b) as to casualty/surety

insurance. . . . . . . . . . . . . . . . . . . . . . . . .30.00

F. solicitor license -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . . 30.00

(2) continuation of appointment, per kind of insurance, each year. . . . . . . . . . . . . . . . . . . 20.00

G. broker license -

(1) filing application for license and issuance of original license, if issued. . . . . . . . . .30.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

H. insurance vending machine license -

(1) filing application for original license and issuance of license, if issued, each machine. . . . . 25.00

(2) annual continuation of license, each

machine. . . . . . . . . . . . . . . . . . . . . . . . . .25.00

I. examination for license, application for examination conducted directly by superintendent, each grouping of kinds of insurance to be covered by the examination as provided by the superintendent's rules, and payable as to each instance of examination. . . . . . . . . . . . . . . . . .50.00

J. surplus line insurer - filing application for qualification as eligible surplus [lines] line

insurer. . . . . . . . . . . . . . . . . . . . . . . . 1,000.00

K. surplus line broker license -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . .100.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . 100.00

L. adjuster license -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . . 30.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

M. rating organization or rating advisory organization license -

(1) filing application for license and issuance of license, if issued. . . . . . . . . . . . . .100.00

(2) annual continuation of

license. . . . . . . . . . . . . . . . . . . . . . . . . 100.00

N. nonprofit health care plans -

(1) filing application for preliminary permit and issuance of permit, if issued. . . . . . . . . . . . 100.00

(2) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers

(3) annual statement, filing. . . . . . 200.00

(4) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00

(b) examination for license conducted directly by superintendent, each instance of

examination. . . . . . . . . . . . . . . . . . . . . . . .50.00

appointment. . . . . . . . . . . . . . . . . . . . . . . .20.00

O. prepaid dental plans -

(1) certificate of authority, application, issuance, continuation, reinstatement, charter documents - same as for insurers

(2) annual report, filing. . . . . . . .200.00

(3) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00

(b) examination for license conducted directly by superintendent, each instance of

examination. . . . . . . . . . . . . . . . . . . . . . . .50.00

year. . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00

P. prearranged funeral insurance - application for certificate of authority, issuance, continuation, reinstatement, charter documents, filing annual statement, licensing of sales representatives - same as for insurers

Q. premium finance companies -

(1) filing application for original license and issuance of license, if issued. . . . . . . . . . . .100.00

(2) annual renewal of license. . . . . .100.00

R. motor clubs -

(1) certificate of authority -

(a) filing application for original certificate of authority and issuance of certificate of authority, if issued. . . . . . . . . . . . . . . . . . .200.00

(b) annual continuation of certificate of authority. . . . . . . . . . . . . . . . . . . . . . .100.00

(2) sales representatives -

(a) filing application for registration or license and issuance of registration or license, if issued, each representative. . . . . . . . . . . . . . . . . . . .20.00

(b) annual continuation of registration or license, each representative. . . . . . . . . . . . . .20.00

S. bail bondsmen -

(1) filing application for original license as bail bondsman or solicitor, and issuance of license, if

issued. . . . . . . . . . . . . . . . . . . . . . . . . . 30.00

(2) examination for license conducted directly by superintendent, each instance of

examination. . . . . . . . . . . . . . . . . . . . . . . .50.00

(3) continuation of appointment, each

year. . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00

T. securities salesperson license -

(1) filing application for license and issuance of license, if issued. . . . . . . . . . . . . . 25.00

(2) renewal of license, each year. . . . 25.00

U. for each signature and seal of the superintendent affixed to any instrument. . . . . . . . . 10.00

V. required filing of forms or rates - by all lines of business other than property or casualty -

(1) rates. . . . . . . . . . . . . . . . 50.00

(2) major form - each new policy and each package submission, which can include multiple policy forms, application forms, rider forms, endorsement forms or amendment forms. . . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(3) incidental forms and rates - forms filed for informational purposes; riders, applications, endorsements and amendments filed individually; rate service organization reference filings; rates filed for informational purposes.15.00

W. health maintenance organizations -

(1) filing an application for a certificate of authority. . . . . . . . . . . . . . . . . . . . . . . 1,000.00

(2) annual continuation of certificate of authority, each year continued. . . . . . . . . . . . . .200.00

(3) filing each annual report . . . . . 200.00

(4) filing an amendment to organizational documents requiring approval. . . . . . . . . . . . . . .200.00

(5) filing informational

amendments. . . . . . . . . . . . . . . . . . . . . . . . 50.00

(6) agents and solicitors -

(a) filing application for original license and issuance of license, if issued. . . . . . . . 30.00

(b) examination for license, each instance of examination. . . . . . . . . . . . . . . . . .50.00

appointment . . . . . . . . . . . . . . . . . . . . . . . 20.00

X. purchasing groups and foreign risk retention groups -

(1) original registration. . . . . . . .500.00

(2) annual continuation of

registration. . . . . . . . . . . . . . . . . . . . . . .200.00

(3) agent or broker fees same as for authorized insurers

Y. third party administrators -

(1) filing application for original individual insurance administrator license. . . . . . . . . . . . . .30.00

(2) filing application for original officer, manager or partner insurance administrator

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(3) continuation or renewal of annual

license. . . . . . . . . . . . . . . . . . . . . . . . . .30.00

(4) examination for license conducted directly by the superintendent, each examination. . . . . . . . . .75.00

(5) each request for a duplicate license or for each name change. . . . . . . . . . . . . . . . . . . 30.00

(6) filing of annual report. . . . . . .50.00.

Z. pharmacy benefits managers -

(1) filing an application for a

license . . . . . . . . . . . . . . . . . . . . . . . . 5,000.00

(2) annual continuation of license, each year continued. . . . . . . . . . . . . . . . . . . . . . .. 5,000.00

(3) filing each annual report. . . . .. 200.00

(4) filing an amendment to organizational documents requiring approval. . . . . . . . . . . . . . . 200.00

(5) filing informational amendments. .. 100.00

(6) agents -

(a) filing application for original license and issuance of license, if issued. . . . . . . . 100.00

(b) annual continuation of

appointment. . . . . . . . . . . . . . . . . . . . . . ..100.00.Section 17. Section 59A-6-5 NMSA 1978 (being Laws 1984, Chapter 127, Section 105, as amended) is amended to read:

"59A-6-5. DISTRIBUTION OF DIVISION COLLECTIONS.--

A. All money received by the division for fees, licenses, penalties and taxes, except as provided in Subsection Z of Section 59A-6-1 NMSA 1978, shall be paid daily by the superintendent to the state treasurer and credited to the "insurance department suspense fund" except as provided by:

(1) the Law Enforcement Protection Fund Act;

(2) Section 59A-6-1.1 NMSA 1978; and

(3) the Voter Action Act.

B. The superintendent may authorize refund of money erroneously paid as fees, licenses, penalties or taxes from the insurance department suspense fund under request for refund made within three years after the erroneous payment. In the case of premium taxes erroneously paid or overpaid in accordance with law, refund may also be requested as a credit against premium taxes due in any annual or quarterly premium tax return filed within three years of the erroneous or excess payment.

C. The "insurance operations fund" is created in the state treasury. The fund shall consist of the distributions made to it pursuant to Subsection D of this section. The legislature shall annually appropriate from the fund to the division those amounts necessary for the division to carry out its responsibilities pursuant to the Insurance Code and other laws. Any balance in the fund at the end of a fiscal year greater than one-half of that fiscal year's appropriation shall revert to the general fund.

D. At the end of every month, after applicable refunds are made pursuant to Subsection B of this section, the treasurer shall make the following transfers from the balance remaining in the insurance department suspense fund:

(1) to the "fire protection fund", that part of the balance derived from property and vehicle insurance business;

(2) to the insurance operations fund, that part of the balance derived from the fees imposed pursuant to Subsections A and E of Section 59A-6-1 NMSA 1978 other than fees derived from property and vehicle insurance business; and

(3) to the general fund, the balance remaining in the insurance department suspense fund derived from all other kinds of insurance business."

Section 18. Section 59A-12A-2 NMSA 1978 (being Laws 1989, Chapter 374, Section 2) is amended to read:

"59A-12A-2. DEFINITIONS.--As used in Chapter 59A, Article 12A NMSA 1978:

A. unless otherwise specified in that article, all definitions of the Insurance Code apply;

B. "administrator" or "third party administrator" or "TPA" means a person who receives any form of administrative or service fee, consideration, payment, premium, reimbursement or compensation for performing or providing any service, function or duty, or activity [respecting] relating to insurance, pharmacy benefits managers or alternatives to insurance in any administrative or management capacity, including [but not limited to] claims or expense review, underwriting, administration and management under a contract or other agreement to be performed in this state or with respect to risks located or partially located in this state or on behalf of persons in this state for any:

(1) plan;

(2) insurance carrier; or

(3) person that self insures;

C. "administrator" does not include:

(1) an employer on behalf of its employees or the employees of one or more subsidiaries or affiliated corporations of that employer as long as only the functions of a group policyholder are performed;

(2) a union on behalf of its members as long as only the functions of a group policyholder are performed;

(3) an insurance company or a corporation [which] that owns more than fifty percent of an insurance company licensed in this state or a health maintenance organization, nonprofit health care plan or a dental plan that is licensed in this state;

(4) an agent licensed in this state acting on behalf of an admitted insurance carrier by whom [he] the agent is appointed and only within the scope of [his] the agent's license as an agent as defined in the article of the Insurance Code under which [he] the agent is licensed;

(5) a creditor on behalf of its debtors with respect to insurance covering its debtors as long as only the functions of a group policyholder or creditor are performed;

(6) a trust and its trustees, agents and employees acting under the trust, established in conformity with 29 U.S.C. Sec. 186;

(7) a trust exempt from taxations under Section 501(a) of the Internal Revenue Code of 1986, and its trustees and employees acting under the trust, or a custodian and its agents and employees acting pursuant to a custodian account that meets the requirements of Section 401(f) of the Internal Revenue Code of 1986;

(8) a bank that is subject to supervision or examination by federal or state regulatory authorities as long as the bank is only performing the function for which it is licensed;

(9) a company that advances and collects any premium or charge from its credit card holders who have authorized it to do so, provided the company does not adjust or settle claims and acts only in its debtor-creditor relationship with its credit card holders;

(10) a person who adjusts or settles claims in the normal course of [his] practice or employment as an attorney at law who does not collect any charge or premium in connection with life or health coverage or annuities;

(11) an adjuster licensed by the superintendent, when engaged in the performance of [his] duties as an adjuster;

(12) any joint fund, risk management pool or self-insurance pool composed of political subdivisions of this state that participate in such funds or pools through interlocal agreements, and any administrative agency established under the interlocal agreement to administer the fund or pool;

(13) [any] a person providing technical, advisory or consulting services who does not make [any] management or discretionary decisions on behalf of an insurance carrier, plan or person that self-insures;

(14) [any] a full-time salaried employee of an insurance carrier to the extent that the functions performed are only for that insurance carrier or any affiliated carrier;

(15) attorneys in fact for a Lloyd's or reciprocal exchange as authorized respectively in Chapter 38 or 39 NMSA 1978, while acting as attorney in fact for such Lloyd's or reciprocal exchange;

(16) a certified public accountant, attorney at law or actuary when performing duties or undertaking responsibilities within the authority and scope of that particular profession;

(17) an association and any subsidiary, affiliated or related corporations of that association. For the purposes of this subsection, "association" means a bona fide trade or professional association which has been in existence for not less than five years and which enters into agreements to pool its liabilities for workers compensation benefits, pursuant to the Group Self-Insurance Act; or

(18) a home owner warranty corporation provided by a trade association that has been in business in New Mexico for [a] at least five years;

D. "alternatives to insurance" means [any] an agreement to indemnify against loss, risk, damage, liability or other contingency relating to property or persons, whether or not such agreement is deemed to be insurance under applicable law or where persons self insure;

E. "bank" means a bank, savings and loan association, credit union or other financial institution authorized by law to accept and maintain deposits;

F. "person" includes a corporation, organization, government or governmental subdivision or agency, business trust, estate trust, partnership, association or any other legal entity; and

G. "plan" means any employer-employee, multiple employer-employee, group, member or other employee benefit or welfare program, medical, accident, sickness, injury, indemnity, death or health benefit program contracting to provide indemnification or expense reimbursement in this state to persons domiciled in this state or for risks located or partially located in this state for any type of the following coverages, expenses or benefits: medical, surgical, orthopedic, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, workers' compensation or optometric plan or programs, hospital care or benefit or benefits in the event of sickness, accident, disability, death or unemployment, or prepaid legal services."

Section 19. Section 59A-12A-3 NMSA 1978 (being Laws 1989, Chapter 374, Section 3) is amended to read:

"59A-12A-3. LICENSE REQUIRED--PENALTY.--

A. No administrator shall perform or provide any service, function, duty or activity, including those of a pharmacy benefits manager, respecting any insurance, plan, self-insurance or alternatives to insurance in [any] an administrative or management capacity in this state or with respect to risks located or partially located in this state or on behalf of persons in this state unless licensed as an administrator under the Insurance Code.

B. Licensing and examination procedures for administrators shall be in accordance with Chapter 59A, Article 11 NMSA 1978, except that the superintendent may, in [his] the superintendent's discretion, waive the examination requirements for administrators who are operating in New Mexico prior to the effective date of Chapter 59A, Article 12A NMSA 1978.

C. Every corporation or partnership to be licensed under Chapter 59A, Article 12A NMSA 1978 shall have every officer and manager of that corporation and every partner of that partnership licensed as an administrator.

D. In addition to any applicable denial, suspension or revocation of a license, refusal to continue license or administrative fine, violation of this section shall be a misdemeanor punishable by a fine not to exceed one thousand dollars ($1,000) and by forfeiture to the state of an amount equal to all compensation for services as administrator received or to be received by the violator by reason of the prohibited transactions."

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