Illinois — Third Party Prescription Administrator Bond
Prepare an Illinois third party prescription administrator bond around the program funds it secures. Section 512-5 describes a fiduciary-account alternative and, when an indemnity bond is used, security of at least 10% of estimated annual reimbursements, with an express health-care-payer exception.
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- Recorded state
- Illinois
- Bond type
- Third-Party Administrator Bond
- Category
- Insurance professionals
What this bond does
This bond addresses accounting for and payment of funds handled in a third party prescription program. Illinois publishes a prescription-administrator form distinct from its general third party administrator bond.
- Who needs it
- A prescription program administrator determining its obligations under section 512-5 of the Illinois Insurance Code. Confirm whether the program falls within the statute or its exception before assuming a bond is required.
- Who it protects
- The statute places a posted indemnity bond with the Director of Insurance for the benefit and indemnification of program service providers. The department's form also requires proper accounting and payment to the person or company entitled to the funds.
Your bond option
This is the option on record for this bond.
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The bond amount describes the limit of the bond obligation, not the price. A listed amount does not establish what the requesting party requires. The premium is what you pay and must be confirmed for the actual option. An E&O limit, where listed, is separate errors and omissions insurance.
Sources
- Illinois Insurance Code §512-5: fiduciary and bonding requirements (opens in a new tab)Checked October 18, 2026
- Illinois Department of Insurance: Third Party Prescription Administrator Bond (opens in a new tab)Checked October 18, 2026
Have these ready
- Determine whether section 512-5 applies to the program.
- Document estimated annual reimbursements and the required security calculation.
- Confirm separate-program versus consolidated coverage and principal name.
- Use the prescription administrator form and check continuation arrangements.
Questions about this bond
Does the law always require a prescription administrator to buy a bond?
No. Section 512-5 describes a fiduciary-account alternative and an exception for programs administered by or on behalf of a health care payer. Confirm the applicable arrangement.
Is 10% the provider's premium rate?
No. The statute uses at least 10% of estimated annual reimbursements to describe the indemnity bond amount. The provider separately determines the premium.
Can one arrangement cover several prescription programs?
Section 512-5 permits separate arrangements or a consolidated fiduciary account or indemnity bond. Confirm the actual scope and wording with the department.
Is this the general Illinois TPA form?
Illinois posts separate prescription and general third party administrator forms. Use the one appropriate to the licensed activity and department's instructions.