(1) If an insurer uses the services of an administrator, the insurer is responsible for determining the benefits, premium rates, underwriting criteria, and claims payment procedures applicable to the coverage and for securing reinsurance, if any. The rules pertaining to these matters shall be provided, in writing, by the insurer or its designee to the administrator. The responsibilities of the administrator as to any of these matters shall be set forth in a written agreement binding upon the administrator and the insurer.
(2) It is the sole responsibility of the insurer to provide for competent administration of its programs.
(3) If an administrator administers benefits for more than 100 certificateholders on behalf of an insurer, the insurer shall, at least semiannually, conduct a review of the operations of the administrator. At least one such review must be an onsite audit of the operations of the administrator. The insurer may contract with a qualified third party to conduct such review.
(4) For purposes of this section, the term “insurer” means a licensed insurance company, health maintenance organization, prepaid limited health service organization, or prepaid health clinic.
