Third Party Administrator's Confidentiality Agreements

A third-party administrator is in charge of disbursing benefits or negotiating transactions on behalf of a client. Since the majority of the information tabled for discussion is private and sensitive in nature, confidentiality agreements are crucial.

Significance

A confidentiality agreement outlines the responsibilities and fiduciary duties of administrators to not disclose information about a client to anyone for any purpose outside the realm of a transaction. It further stipulates that the administrator is not allowed to disclose personal details that may harm benefits or jeopardize a transaction, as long as the ethics of the administrator are not compromised. This binding agreement has severe consequences should an administrator breach the agreement.

Function

Keeping information confidential as an administrator ensures that the administrator is working in the best interest of his client at all times. The agreement provides protection from conflicts of interest or unlawful disclosure of information.

Considerations

Administrators found disclosing confidential client information to friends, family or other parties will face consequences that can range from a monetary fine, loss of employment, or even loss of license in his chosen profession. Thus, confidentiality agreements should always be considered of the utmost importance.

References

• All Business: Sample Confidentiality Agreement with Third Party
• American Institute of CPAs: Confidentiality, Indemnification, and Business Associates Agreements