(a) Initial license.

1. (1) An applicant for a PBM license shall apply for a license on a form prescribed by the Insurance Commissioner.
2. (2) Each application for a license shall be verified by an officer or authorized representative of the applicant.

3. (3) The commissioner shall require the PBM to describe or provide:

   1. (A) A nonrefundable filing fee of one thousand dollars ($1,000);
   2. (B) The following evidence of financial responsibility: a cash surety bond issued by a corporate surety authorized to issue surety bonds in the State of Arkansas, in the sum of one million dollars ($1,000,000), which shall be subject to lawful levy of execution by any party to whom the licensee has been found to be legally liable;
   3. (C) Contact information, including name, title, mailing address, email address, and direct phone number, for the following individuals (the PBM may instead provide the departmental contact name, mailing address, email address, and direct phone number):

(i) MAC and National Average Drug Acquisition Cost (NADAC) complaints contact or contacts for Arkansas;

1. (ii) PBM licensing contact for Arkansas; and

   1. (iii) Government relations contact for Arkansas;
   2. (D) Proof of registration with the Secretary of State;
   3. (E) A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of the directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association;

   4. (F) A copy of the:

      1. (i) Basic organizational document of the applicant, such as the articles of incorporation, articles of association, partnership agreement, trust agreement or other applicable documents, and all amendments thereto; and
      2. (ii) Bylaws, rules and regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant;
   5. (G) A copy of the applicant’s standard, generic contract template, provider manual, or other appropriate items incorporated by reference that it uses for contracts entered into by the applicant with pharmacists, pharmacies, or pharmacy services administrative organizations in this state in administration of pharmacy benefits for healthcare insurers, for the purpose only of the State Insurance Department's review that such contracts comply with Arkansas Code § 23-92-506(b), § 23-92-506(c), § 23-92-507, § 4-88-1004, and § 17-92-507;
   6. (H) A copy of the applicant’s most recent fiscal year-end audited financial statement;
   7. (I) A description of the projected population or numbers of enrollees or beneficiaries to be administered by the applicant in this state to be serviced on an annual basis for all healthcare insurers with whom the applicant has contracted, and, if applicable, the population or numbers of enrollees administered by the applicant in the previous year for a healthcare insurer (please identify the numbers of enrollees by healthcare insurer);
   8. (J) The policy and procedure or procedures that demonstrate that the applicant has compliant processes established to adhere to all of the requirements in Arkansas Code § 17-92-507, concerning MAC Lists, and a description, including any written policies or procedures describing the appeals dispute resolution process for in-network or contracted pharmacists or pharmacies;
   9. (K) A description or statement explaining how the applicant is in compliance with Arkansas Code § 23-92-507, concerning anti-gag clauses, in its contracts with pharmacists or pharmacies in administration of pharmacy benefits for health benefit plans issued by healthcare insurers in this state;

   10. (L)

       1. (i) A description of the applicant’s network's service areas by county in this state for a healthcare insurer and the applicant’s pharmacy provider directory list for a healthcare insurer.
       2. (ii) This requirement may be satisfied if such information is submitted to the State Insurance Department by the healthcare insurer for the healthcare insurer's network adequacy requirements;

   11. (M)

       1. (i) A statement of whether the applicant has been refused a registration, license, or certification to act as, or provide the services of, a PBM or third-party administrator, or has any registration, license, or certification to act as such been denied, suspended, revoked or nonrenewed for any reason by any state or federal entity.
       2. (ii) If so, attach specific details separately for each refusal or denial, including the date, nature, and disposition of the action;

   12. (N)

       1. (i) A description of whether the applicant had a business relationship with an insurance company terminated for any alleged fraudulent or illegal activities in connection with the administration of a pharmacy benefits plan.
       2. (ii) If so, attach specific details separately explaining this termination, including the date and nature of the termination; and
   13. (O) Any other information that is deemed necessary by the commissioner in evaluating the application to comply with the Arkansas Pharmacy Benefits Manager Licensure Act, Arkansas Code § 23-92-501 et seq., or requirements of this part.

(b) Review and approval of initial licensure applications. Upon receipt of a complete application for items required under subsection (a) of this section, the commissioner shall review the application and:

1. (1) Approve the application and issue the applicant a PBM license;

2. (2)

   1. (A) Notify the applicant in writing that the application is incomplete and that additional information is needed to complete the review of the application.
   2. (B) If the missing or necessary information is not received within thirty (30) days from the date of the notification, the commissioner shall deny the application unless good cause is shown; or

3. (3)

   1. (A) Deny the application.

   2. (B) If the commissioner determines that the applicant does not meet the requirements for licensure, the commissioner shall:

      1. (i) Provide written notice to the applicant that the application has been denied stating or explaining the basis of the denial; and
      2. (ii) Advise the applicant that a request for a hearing may be filed with the commissioner in accordance with Arkansas Code § 23-61-303.
      3. (c) Renewal.

4. (1)

   1. (A) A PBM license shall be renewed annually.

   2. (B) A renewal application shall require the following:

      1. (i) Proof that the PBM has in place the surety bond financial responsibility requirement in subdivision (a)(3)(B) of this section; and
      2. (ii) Documentation of any changes to the items in subsection (a) of this section from the date the PBM became licensed or last renewed its license.
5. (2) The State Insurance Department’s review of renewal documents shall also include review of whether the PBM timely and compliantly filed any applicable statutorily required reports and certifications for the year immediately preceding submission of the renewal application.

6. (3)

   1. (A) A renewal application shall be deemed approved by the commissioner after forty-five (45) days from the date of the receipt of the complete renewal application by the State Insurance Department, unless denied or disapproved by the commissioner during that time period.

   2. (B) For disapprovals or denials of a renewal licensure by the commissioner, the commissioner shall:

      1. (i) Provide written notice to the renewal PBM applicant that the licensure renewal was denied stating or explaining the basis of the denial; and
      2. (ii) Advise the PBM renewal applicant that a request for a hearing may be filed with the commissioner in accordance with Arkansas Code § 23-61-303.
      3. (d) Standards of review.

7. (1) The commissioner shall deny an initial application for licensure or deny renewal of a PBM license for the following reasons:

   1. (A) The commissioner determines that the applicant or any individual responsible for the conduct of affairs of the applicant is not competent, trustworthy, financially responsible, or of good personal and business reputation as to its directors or officers;
   2. (B) The commissioner determines that the magnitude of violation or noncompliance demonstrated by the PBM warrants denial of licensure; or
   3. (C) The PBM has failed to timely submit information to complete review of the application under subdivision (b)(2) of this section or has failed to submit a renewal application and information under subsection (c) of this section.
8. (2) In lieu of a denial for an initial licensure or renewal application, the commissioner may permit the PBM to submit to the commissioner a corrective action plan to cure or correct deficiencies under subdivision (d)(1) of this section.

(e) Cash surety bond.

1. (1) A cash surety bond under subdivision (a)(3)(B) of this section shall be maintained at all times by the PBM during its licensure with the State Insurance Department.
2. (2) The commissioner may, however, reduce the amount of the bond requirement in subdivision (a)(3)(B) of this section if the amount required is unreasonable relative to the size of the PBM's business operations in this state and would cause a significant financial hardship.

(f) Confidentiality.

1. (1) The information submitted by a PBM under subdivisions (a)(3)(F) – (O) of this section shall be considered confidential under Arkansas Code § 23-61-103, § 23-61-107(a)(4), and § 23-61-207, and, in addition, shall be considered proprietary, as information that would provide unfair competitive advantage to a competitor, under the Freedom of Information Act of 1967, Arkansas Code § 25-19-101 et seq., in Arkansas Code § 25-19-105(b)(9).
2. (2) A PBM shall file with the State Insurance Department, at the time of its licensure filing, a redacted, public version of its application, excepting any proprietary information, required to be submitted to the State Insurance Department under this part.