Missouri Department of Commerce and Insurance announces rule amendment easing regulatory burden for small third-party administrators
JEFFERSON CITY, Mo. – Today, the Missouri Department of Commerce and Insurance (DCI) announced an amendment to a state administrative rule that provides targeted regulatory relief for small and emerging third-party administrators (TPAs) operating in Missouri.
Effective September 30, the revised rule, 20 CSR 200-9.800, creates an exemption from mandatory independent audits by CPAs for qualifying small and newly established TPAs, significantly reducing regulatory costs and administrative burden while fostering business growth across the state.
TPAs perform vital behind-the-scenes functions for insurance companies handling life, health, annuities, and workers’ compensation lines. Often serving as the direct point of contact for Missourians when paying health insurance premiums or submitting claims documentation, TPAs are responsible for claims settlement, underwriting, premium collection and solicitation. Currently, 492 licensed TPAs operate in Missouri.
“Our goal is to promote a competitive business environment in Missouri while maintaining rigorous protections for policyholders," DCI Director Angela Nelson said. “Independent audits are a valuable tool for solvency regulation but can be costly and inhibit growth for small or newly formed administrators. This adjustment removes unnecessary hurdles for small businesses and allows us to focus more of our efforts on ensuring larger entities doing business in our state are financially sound and comply with the regulatory requirements in place to protect Missourians.”
Under Section 376.1093, RSMo, all licensed TPAs must submit an annual report to the department by March 1. Previously, administrative rules required every TPA, regardless of size or operating revenue, to submit an independently audited financial statement prepared by a CPA. While valuable for verifying financial stability, independent audits impose recurring costs that place a disproportionate burden on smaller and newer enterprises.
To remove this barrier without compromising regulatory integrity, DCI’s rule amendment exempts independent TPAs (those not operating as part of an insurance holding company system) from the CPA audit requirement if they meet at least one of the following criteria:
- Asset Threshold: Report less than $1,000,000 in total assets during the most recent fiscal year;
- Revenue Threshold: Report less than $5,000,000 in total revenue during the most recent fiscal year; or
- Emerging Businesses: Have been in continuous operation for fewer than two fiscal years.
Qualifying small TPAs will continue to submit officer-certified financial statements alongside their mandatory annual filings, ensuring continued transparency and accountability. TPAs affiliated with larger insurance holding companies will continue to provide full audited financial statements. This balanced approach ensures Missouri consumers remain protected while saving small businesses valuable time and money.
DCI is charged with protecting Missouri consumers through oversight of the insurance industry, banks, credit unions, utilities and various professional licensees operating in the state. For more information about the department, please visit our website at dci.mo.gov.
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