West Virginia Discount Medical Plan Organization Surety Bond

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Bond Penalty: $35,000

The West Virginia Discount Medical Plan Organization Surety Bond is a statutory obligation required of all entities operating as Discount Medical Plan Organizations (DMPOs) in the state. This bond, filed with the West Virginia Insurance Commissioner, is designed to protect the public from potential misconduct and ensure full compliance with the provisions of W. Va. Code §33-15E.

What Is a DMPO?

A Discount Medical Plan Organization arranges for discounts on healthcare services from participating providers, offered to members in exchange for a fee. These programs are not insurance and do not reimburse providers. Instead, they provide members with access to reduced rates for services such as dental care, vision, prescriptions, and wellness treatments.

Bond Requirement Under West Virginia Law

Pursuant to §33-15E-6 of the West Virginia Code, each DMPO must provide a surety bond in the amount of $35,000 before being licensed. The bond must:

  • Be made payable to the West Virginia Insurance Commissioner
  • Be issued by a surety licensed in West Virginia
  • Guarantee the faithful and honest conduct of the DMPO’s business
  • Protect any person damaged by a violation of DMPO laws and regulations

The bond ensures financial recourse in the event a DMPO fails to fulfill its obligations or engages in fraudulent or unethical behavior. Per §33-15E-6, each licensed discount medical plan organization shall maintain in force a surety bond in its own name, in an amount not less than $35,000, in favor of the commissioner for the benefit of any person who is damaged by any violation of this article. The bond shall cover any violation occurring during the time period during which the bond is in effect and shall be issued by an insurance company licensed to do business in this state. A copy of the bond or a statement identifying the depository, trustee, and account number of the surety account, and thereafter proof of annual renewal of the bond or maintenance of the surety account, shall be filed with the commissioner."

Key Terms of the Surety Bond (Form DMP-2)

The official Form DMP-2 (07-2008) includes the following provisions:

  • The bond must be maintained continuously for the duration of licensure
  • Annual renewal is required unless otherwise agreed upon
  • The bond cannot be cancelled without 30 days’ prior written notice to the Commissioner
  • Total liability under the bond is capped at $35,000, regardless of the number of claims

A properly executed bond must include a notarized signature of the principal and surety, and a valid power of attorney must be attached for the surety company. All documents should be sent to:

West Virginia Offices of the Insurance Commissioner
Company Analysis and Examinations Division
P.O. Box 50540
Charleston, WV 25305-0540

West Virginia surety bond leader, Surety One, Inc. provides all of the surety bonds required by the medical billing and program service provider sector. We also offer the fidelity bond coverages specific to this program class. More questions? Call (800) 373-2804, email Underwriting@SuretyOne.com or click here for a live chat with one of our underwriters about a West Virginia discount medical plan organization surety bond.

Do you also act as an intermediary in the sale or delivery of durable medical equipment? You will need a DMEPOS bond. Learn more about this bond here. If you have a working agreement with Express Scripts, you will also need an express scripts performance bond. Learn more about this bond here.

Surety bond application review and quoting are free of charge. There is no obligation to purchase.

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