(1) A third party administrator shall not enter into any agreement or understanding with an insurer the effect of which is to make the amount of the third party administrators commissions, fees or charges contingent upon savings effected in the adjustment, settlement and payment of losses covered by the obligations of the insurer. (2) This section does not prohibit: (a) A third party administrator from receiving performance-based compensation for providing hospital or other auditing services; or (b) A third party administrator from receiving compensation based on premiums or charges collected or on the number of claims processed. (3) The third party administrator shall disclose to the insurer all charges, fees and commissions received from all sources in connection with the provision of administrative services for the insurer, including any fees or commissions paid by insurers providing reinsurance.
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