Current through Register Vol. 49, No. 6, March 15, 2024
(1) The director is
responsible for market regulation of insurers for Missouri policyholder
protection and will utilize market conduct actions, including market analysis,
investigation, desk examinations, targeted examinations, and comprehensive
examinations of insurers or other companies. Such actions will be pursued by
the division in a manner consistent with the purposes of section
374.185,
RSMo.
(2) A market conduct
examination will be conducted only upon the issuance of an examination warrant
by the director or with the written consent of the insurer or company. In
furtherance of the purposes of section
374.185,
RSMo, and to provide uniform standards designed to avoid arbitrary or
capricious use of discretion in issuing examination warrants for market conduct
examinations, the director will apply the following standards in evaluating
factual support for a market conduct examination warrant:
(A) A request for an examination warrant need
not be verified by oath, but will contain the signature of the chief market
conduct examiner, and state facts sufficient to support the director's
reasonable belief of cause as set forth in subsection (2)(B);
(B) The director may issue an examination
warrant for-
1. A desk examination, if the
director has reason to believe-
A. An insurer
or other company may have engaged in, or taken a substantial step toward
engaging in, or may have materially aided any other person in engaging in, any
practice or course of business in violation of Chapter 287, Chapter 354, or
Chapters 374 to 385, RSMo, or any rule adopted pursuant thereto, and the
examination is reasonably calculated to provide data or other information
relevant to this inquiry;
B.
Significant changes have occurred in an insurer's or other company's market
share during the last year for which an insurer cannot provide a satisfactory
explanation;
C. Significant market
changes threaten the availability or affordability of insurance coverage;
or
D. An examination is required to
be performed by law;
2.
An on-site examination, if the director has reason to believe-
A. An insurer or other company has engaged
in, is engaging in, has taken a substantial step toward engaging in, or has
materially aided any other person in engaging in any practice or course of
business in violation of Chapter 287, Chapter 354, or Chapters 374 to 385,
RSMo, or any rule adopted pursuant thereto;
B. Significant market changes threaten the
availability or affordability of insurance coverage; or
C. An examination is required to be performed
by law;
(C)
The evidence indicating that an insurer or other company has engaged in, is
engaging in, has taken a substantial step toward engaging in, or has materially
aided any other person in engaging in any practice or course of business in
violation of Chapter 287, Chapter 354, or Chapters 374 to 385, RSMo, or any
rule adopted pursuant thereto, will be derived from the following sources:
1. Information obtained from a market conduct
annual statement, market survey, or report of financial examination;
2. Confirmed complaint(s) against the company
indicating a particular practice or a complaint ratio that deviates
significantly from the norm;
3.
Information obtained from other objective sources; or
4. Information obtained from any credible
source with direct access to relevant information;
(D) An examination warrant shall be based on
cause and will be reasonably limited in scope to the specific line(s) of
business, the specific business practice(s), and the time period to be
examined, as identified in the examination warrant. If additional cause is
discov- ered, which leads the examiner to believe additional lines of business,
additional business practices, or additional time periods need to be examined,
or if the examiner believes a different method of examina- tion needs to be
employed, a request to modify or expand the previ- ously issued examination
warrant or for a new examination warrant will be made to the director who may
issue a new or modified war- rant. The identification of additional laws
violated does not necessi- tate a request to modify or expand a previously
issued warrant; and
(E) An
examination warrant will-
1. Be in writing and
in the name of the department;
2.
Be directed to the division;
3.
Identify the scope of the examination by describing the specific line(s) of
business , the specific business practice(s) to be examined, and the time
period to be reviewed during the examination;
4. Identify the law(s) the director
reasonably believes were violated and the cause that supports the director's
determination to issue the examination warrant. The division is not precluded
from pursuing or citing to other violations of law through the course of an
examination that are not specified under the originally issued warrant. In
identifying the cause, the examination warrant need only indicate a general
category(ies) of information relied upon, including, but not limited to,
complaint(s), complaint indices, market conduct annual statement(s), market
share(s), financial examination(s), information from other states, legal
referral(s), premium shift in line(s) of business, statistical information,
market conduct examination results, new operation(s), reexamination(s), and/or
evaluation(s) of new laws;
5.
Identify whether the examination will be conducted as a desk examination, an
on-site examination, or both; and
6. Be signed by the
director.
(3)
An examination warrant will be served on the insurer or other company prior to
commencing the market conduct examination.
(4) In conducting the examination, the
examiner will observe those guidelines and procedures set forth in the Market
Regulation Handbook adopted by the National Association of Insurance
Commissioners (NAIC).
*Original authority: 374.045, RSMo 1967, amended 1993,
1995; 374.185, RSMo 2007; and 374.205, RSMo 1992, amended 1997,
1999.
