PURPOSE: This rule implements the purposes of section 374.185, RSMo, and establishes uniform standards for providing notice of an on-site market conduct examination to the insurer and reporting the examination warrant to the National Association of Insurance Commissioners (NAIC), along with a procedure for encouraging resolution prior to incurring unnecessary examination expenses.

1. (1) The director shall announce to the applicable company an examination and shall post an announcement of such examination on the National Association of Insurance Commissioners (NAIC’s) examination tracking system, or comparable NAIC product, as determined by the director, subject to the NAIC’s technological constraints, as soon as possible, but in no case later than sixty (60) days before the estimated commencement of the examination. The director may reduce the sixty (60)-day notice if the director has determined that the company has engaged in or is FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION

engaging in any practice or course of business in violation of Chapter 287, Chapter 354, or Chapters 374 to 385, RSMo, and the sixty (60)-day notice would result in continuing injury to consumers. In the event that the notice period is reduced to less than sixty (60) days, the company is entitled to an expedited hearing as allowed by 20 CSR 100- 8.008. A warrant issued under 20 CSR 100- 8.005 may be incorporated to provide some of the information required in this notice, but such announcement shall contain—

1. (A) The name and address of the insurer or company being examined;
2. (B) The name and contact information of the audit manager;
3. (C) The reason for and the scope of the examination;
4. (D) The date the examination is scheduled to begin;
5. (E) Identification of any personnel not employed by the department who will assist in the examination, if known at the time the notice is prepared;
6. (F) A time estimate for the examination;
7. (G) A budget and work plan for the examination and identification of reasonable and necessary costs and fees that will be included in the bill, if the cost of the examination is billed to the insurer company; and
8. (H) A request for the insurer company to name its examination coordinator.

1. (2) The company shall be notified of any practice or procedure which is to be the subject of an examination warrant. Prior to commencing any examination, the company shall be given an opportunity to resolve such matters that arise as a result of a market analysis to the satisfaction of the director through informal resolution, settlement agreement, curative order, or other formal resolution under sections 374.046 to 374.049, RSMo.

AUTHORITY: sections 374.045 and 374.205, RSMo 2000 and section 374.185, RSMo Supp. 2007.* Original rule filed April 1, 2008, effective Nov. 30, 2008.

*Original authority: 374.045, RSMo 1967, amended 1993, 1995; 374.185, RSMo 2007; and 374.205, RSMo 1992, amended 1997, 1999.