Oklahoma Discount Medical Plan Organization Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain an Oklahoma Discount Medical Plan Organization bond
At a Glance:
- Lowest Cost: $350 per year or $35 per month, based on the applicant’s credit
- Bond Amount: Minimum of $35,000 (more on this later)
- Who Needs it: All discount medical plan organizations (DMPOs) operating in Oklahoma
- Purpose: To ensure the public will receive compensation for financial harm if the DMPO violates registration law
- Who Regulates Discount Medical Plan Organizations in Oklahoma: The Oklahoma Insurance Department
Oklahoma statute 1219.4 requires all DMPOs operating in the state to register with the Insurance Department. The Oklahoma legislature enacted the registration laws and regulations to ensure that DMPOs engage in ethical business practices. To provide financial security for the enforcement of the registration law, DMPOs must purchase and maintain a surety bond to be eligible for registration.
What is the Purpose of the Oklahoma Discount Medical Plan Organization Bond?
Oklahoma requires DMPOs to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the DMPO fails to abide by the regulations set forth in Oklahoma code 1219.4. Specifically, the bond protects consumers if the DMPO fails to account for all funds obtained from plan members or does not make payments to members when required. In short, the bond is a type of insurance that protects the public if the DMPO violates registration law.
How Can an Insurance Agent Obtain an Oklahoma Medical Discount Plan Organization Bond?
BondExchange makes obtaining an Oklahoma Medical Discount Plan Organization bond easy. Simply log in to your account and use our keyword search to find the “discount” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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How is the Bond Amount Determined?
Oklahoma Statute 1219.4 dictates that the bond amount must be a minimum of $35,000. However, the statute also grants the Insurance Department the authority to increase the required amount on a case-by-case basis.
Is a Credit Check Required for the Oklahoma Discount Medical Plan Organization Bond?
Surety companies will run a credit check on the owners of the DMPO to determine eligibility and pricing for the Oklahoma Discount Medical Plan Organization bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Oklahoma Discount Medical Plan Organization Bond Cost?
The Oklahoma Discount Medical Plan Organization Bond can cost anywhere between 1% to 7.5% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on a $35,000 bond requirement.
$35,000 Discount Medical Plan Organization Bond Cost
|Credit Score||Bond Cost (1 year)||Bond Cost (1 month)|
|625 – 679||$525||$53|
|575 – 624||$1,313||$132|
|550 – 574||$1,750||$175|
|500 – 549||$2,625||$263|
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase the Bond?
Oklahoma requires all discount medical plan organizations to purchase a surety bond as a prerequisite to obtaining a business registration. To paraphrase Oklahoma statute 1219.4, a discount medical plan organization is a business entity that provides members of the organization with access to discounted medical services offered by certain providers.
Exemptions to this definition include:
- Group health services
- Health maintenance organizations
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Oklahoma Discount Medical Plan Organizations Apply for a Registration?
DMPOs in Oklahoma must navigate several steps to obtain a registration. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
Registration Period – All Oklahoma DMPO Registrations are valid for one year from the date of issuance and must be renewed before the expiration date
Step 1 – Meet the Net Worth Requirements
DMPOs must amass a company net worth (assets – liabilities) of at least $150,000. DMPOs are required to submit an audited financial statement verifying their net worth with their registration application.
DMPOs registering as an affiliate of an insurer, group health service, or health maintenance organization are exempt from the net worth requirement.
Step 2 – Purchase a Surety Bond
All DMPOs must purchase and maintain a $35,000 surety bond. To determine their required bond amount, DMPOs should contact the Insurance Department.
Step 3 – Create an OPTins Account
Step 4 – Complete the Application
All Oklahoma DMPO registration applications should be submitted electronically through OPTins. DMPOs must complete the application in its entirety, and pay a $250 fee ($100 if the DMPO is a qualified affiliate).
How do Oklahoma Discount Medical Plan Organizations Renew Their Registration?
DMPOs in Oklahoma can renew their registration online here. Applicants must submit a $250 fee ($100 if the DMPO is a qualified affiliate) when submitting their renewal application. All Oklahoma DMPO Registrations are valid for one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Discount Medical Plan Organizations in Oklahoma?
Oklahoma does not require DMPOs to purchase and form of liability insurance as a prerequisite to obtaining a business license. All DMPOs must purchase and maintain a $35,000 surety bond.
How Do Oklahoma Discount Medical Plan Organizations File Their Bond?
DMPOs should submit their completed bond form, including the power of attorney, electronically through OPTins. The surety bond requires signatures from both the surety company that issues the bond and from a representative of the DMPO. The surety company should include the following information on the bond form:
- Legal name of entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed
What Can Oklahoma Discount Medical Plan Organizations Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, DMPOs in Oklahoma must follow all registration regulations in the state, including some of the most important issues below that tend to cause claims:
- Account for all funds received from plan members
- Make all required payments owed to plan members
What Other Insurance Products Can Agents Offer Discount Medical Plan Organizations in Oklahoma?
Oklahoma does not require DMPOs to obtain any form of liability insurance as a prerequisite to obtaining a business registration. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Oklahoma Discount Medical Plan Organization Customers?
The Oklahoma Secretary of State conveniently provides a public database to search for active businesses in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.