Pharmacy Benefits Manager ($50,000) Bond - Statewide in Oklahoma

Brief Summary

$50,000 is the starting tier, not the Oklahoma PBM bond amount for everyone. The Insurance Department scales the bond by Oklahoma covered lives, up to $1,000,000 above 100,000 lives. Knowing your count before you apply keeps the license file from stalling over a bond in the wrong amount.

A pharmacy benefits manager must be licensed by the Oklahoma Insurance Department under 59 O.S. 358 and must file a continuous surety bond with the State of Oklahoma as obligee. Under OAC 365:25-29-6 the minimum penal sum is $50,000 for up to 5,000 Oklahoma covered lives and rises in steps to $1,000,000 for more than 100,000 lives. The bond stays in force as long as the license does and cannot be cancelled without 30 days written notice to the PBM and the Insurance Commissioner.

We can help with all Oklahoma bonds!

How to Apply for a Pharmacy Benefits Manager ($50,000) Bond:

• Count total Oklahoma covered lives under all PBM contracts and pick the matching bond tier.
• Initial application filed electronically through OPTins.
• Articles of incorporation or organization, an organization chart and NAIC UCAA Form 11 biographical affidavits for officers and directors.
• Agent for service of process on UCAA Form 12.
• Most recent fiscal year end financial statements audited by an independent CPA.
• Surety bond on the Department's PBM bond form, with the State of Oklahoma as obligee.

Detailed Information About the Oklahoma Pharmacy Benefits Manager ($50,000) Bond:

Find your tier first

The $50,000 bond fits a PBM serving up to 5,000 covered lives in Oklahoma. Above that, OAC 365:25-29-6 and the Department's bond form set these minimum penal sums:

• 0 to 5,000 lives: $50,000
• 5,001 to 10,000 lives: $100,000
• 10,001 to 25,000 lives: $250,000
• 25,001 to 50,000 lives: $500,000
• 50,001 to 100,000 lives: $750,000
• 100,001 lives and up: $1,000,000

Covered lives means the total covered individuals or lives served under all of the PBM's contracts or agreements in Oklahoma. The initial application asks for that number, so the bond and the application need to agree.

Who must be licensed

Under 59 O.S. 358, a pharmacy benefits manager, or any entity acting as one in a contractual or employment relationship for a covered entity, must first obtain a license from the Insurance Department. The application includes an agent for service of process, the required fee and evidence of a surety bond.

The bond form

The Department's Pharmacy Benefit Manager Surety Bond Form names the State of Oklahoma as obligee and cites 59 O.S. 357 through 360. The principal must conform with the laws, rules and regulations governing PBMs. The State and any person damaged by the PBM's failure to comply with Oklahoma law may claim against it. The bond is continuous for as long as the PBM license remains in effect, and cancellation requires 30 days written notice by registered mail to the principal and the Insurance Commissioner.

License term and renewal

OAC 365:25-29-7 limits the license to twelve months from the original month of issuance. Renewal must be filed before the end of that month or the license terminates. The rule sets a $500 renewal fee and a $1,000 reinstatement fee within one year after expiration. After a year, the entity applies as a new licensee. Initial applications are filed electronically through OPTins, and the Department confirms the PBM annual report was filed before it renews a license.

Licensing and enforcement are separate

Effective November 1, 2023, enforcement of the Patient's Right to Pharmacy Choice Act moved to the Oklahoma Attorney General's office. PBM license applications, including the bond, are still handled by the Oklahoma Insurance Department.

Eligibility and Requirements for a Oklahoma Pharmacy Benefits Manager ($50,000) Bond:

• Statutory basis: 59 O.S. 357 through 360, with the bond rule at OAC 365:25-29-6.
• Six tiers from $50,000 to $1,000,000 based on Oklahoma covered lives.
• Continuous bond for as long as the license is in effect.
• 30 days written notice to the PBM and the Insurance Commissioner before cancellation.
• Active Oklahoma Secretary of State registration, plus proof of good standing for PBMs domiciled outside Oklahoma.

Oklahoma Pharmacy Benefits Manager ($50,000) Bond FAQs:

Official and Additional Resources for the Oklahoma Pharmacy Benefits Manager ($50,000) Bond: