License & Permit
Third Party Administrator (TPA) Bond
A third party administrator bond is a bond state insurance departments require before a company can handle premiums or pay claims for insurers or self-funded benefit plans.
- Required by
- State insurance departments
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
The bond protects insurers, plans, and people who use the administrator's services from loss if the TPA mishandles or misappropriates funds or breaks the state insurance code. The insurance department or a harmed party claims against the bond, and the surety pays valid claims up to the bond amount.
Who needs it
- Third party administrators of health and benefit plans
- Claims administrators for self-funded employers
- Workers' compensation TPAs
What the underwriter looks at
- Amount of funds handled
- Audited financial statements
- Years in operation
- Regulatory history
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How much bond do I need?
It varies a lot. Many states tie it to a share of funds handled with a floor. Connecticut, for example, requires at least $500,000 and lets the commissioner set more.
Can the bond be waived?
Some states allow it. Connecticut may waive the base bond if you file two years of audited statements showing positive net worth.