HB 1651 -- Enforcement Powers of the Department of Insurance

Sponsor:  Yates

This bill revises the laws regarding the Department of
Insurance's enforcement of violations of the state insurance
code.  The bill:

(1)  Synchronizes the penalties, administrative orders, civil
actions, and other remedies available to the Director of the
Department of Insurance;

(2)  Allows the director, upon determining that a person has
violated or attempted to violate provisions of the insurance
laws, to order the following relief:

(a)  An order directing the person to cease and desist from
engaging in the act, practice, omission, or course of business;

(b)  A curative order or order directing the person to take other
action necessary to comply with insurance laws;

(c)  Order a civil penalty or forfeiture; and

(d)  Award reasonable costs of the investigation;

(3)  Authorizes fines up to $100,000 and imprisonment up to 10
years if a person violates a cease and desist order.  Currently,
a person may be punished by a maximum $1,000 fine and up to one
year in jail;

(4)  Allows the director to suspend or revoke a corporation's or
insurer's certificate of authority for violating insurance laws
or for felony or misdemeanor convictions.  The director must
provide 30 days' notice and a hearing, if requested, before
revocation;

(5)  Allows the director to seek redress in county circuit
courts.  The court can issue injunctions, freeze assets, or take
other action as specified.  A consumer restitution fund is
created for preserving and distributing disgorgement or
restitution funds obtained through enforcement procedures to
aggrieved consumers;

(6)  Classifies various violations of insurance laws into five
categories from level one through level five.  Maximum fines are
established at each level with level one being the least and
level five the highest.  All fines collected will go to fund
public schools as required by Article IX, Section 7, of the
Missouri Constitution;

(7)  Allows any applicant who is refused a license to sell
insurance to file a petition with the Administrative Hearing
Commission.  The director will have the burden of proof to defend
the refusal;

(8)  Allows administrative hearings before the director for
persons aggrieved by any order of the director; and

(9)  Authorizes the director, at his or her discretion, to
consult and share information with other members of the National
Association of Insurance Commissioners, the Commissioner of
Securities within the Office of Secretary of State, state
securities regulators, the Commissioner of the Division of
Finance within the Department of Economic Development, the
Attorney General, federal banking and securities regulators, the
National Association of Securities Dealers (NASD), the United
States Department of Justice, the Commodity Futures Trading
Commission, and the Federal Trade Commission to effectuate
greater uniformity in insurance and financial services regulation
among state and federal governments, and self-regulatory
organizations.  The cooperation, coordination, consultation, and
sharing of records and information authorized by the bill
include:

(a)  Establishing or employing one or more designees as a central
electronic depository for licensing and rate and form filings
with the director and for records required or allowed to be
maintained;

(b)  Encouraging insurance companies and producers to implement
electronic filing through a central electronic depository;

(c)  Developing and maintaining uniform forms;

(d)  Conducting joint market conduct examinations and other
investigations through collaboration and cooperation with other
insurance regulators;

(e)  Holding joint administrative hearings;

(f)  Instituting and prosecuting joint civil or administrative
enforcement proceedings; and

(g)  Sharing and exchanging personnel.

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:44 am