PURPOSE: This rule effectuates or aids in the interpretation of section 375.1007, RSMo regarding detection of frequency to indicate a business practice.

1. (1) Definitions. When used in this regulation—

   1. (A) Time error rate refers to any one (1) of the following:

      1. 1. Acknowledgment time error rate, the

percentage of claims in which the insurer has performed an act described in section 375.1007(2), RSMo or violated 20 CSR 100- 1.030;

1. 2. Investigation time error rate, the per-

centage of claims in which the insurer has performed an act described in section 375.1007(3), RSMo or violated 20 CSR 200- 1.040; and

1. 3. Determination time error rate, the

percentage of claims in which the insurer has performed an act described in section 375.1007(7), RSMo or violated 20 CSR 200- 1.050(1)(A); and

1. (B) Unfair settlement rate means the percentage of claims in which the insurer has performed an act described in section 375.1007(1), (5)–(6), (8)–(15), RSMo or violated 20 CSR 200-1.020 and 20 CSR 200- 1.050(1)(B) or 20 CSR 200-1.050(2).

1. (2) The time error rates and unfair settlement rate will be important in determining whether the insurer has engaged in an unfair settlement practice as that phrase is used in section 375.1007, RSMo; however, other relevant factors will be considered in making the determinations. No attempt is made in this regulation to list other relevant factors because these factors depend on the facts of each case and no exhaustive or comprehensive list of other factors can be made.
2. (3) The time error rates and unfair settlement rate may be established by census or by an appropriate random sample. Whether a random sample was appropriate will be determined on a case-by-case basis.

AUTHORITY: sections 374.045, RSMo (Cum. Supp. 1996) and 375.1000–375.1018, RSMo (1994).* This rule was previously filed as 4 CSR 190-10.060(1), (8) and (9). Original Rebecca McDowell Cook (5/31/97)* rule filed Aug. 5, 1974, effective Aug. 15, 1974. Rescinded and readopted: Filed Aug. 16, 1978, effective Dec. 11, 1978. Amended: Filed Sept. 11, 1980, effective Feb. 16, 1981. Amended: Filed Sept. 14, 1981, effective Jan. 15, 1982. Amended: Filed Aug. 4, 1986, effective Jan. 1, 1987. Amended: Filed Jan. 5, 1987, effective June 1, 1987. Amended: Filed Aug. 4, 1987, effective Dec. 24, 1987. Amended: Filed Dec. 9, 1988, effective April 28, 1989. Amended: Filed Nov. 2, 1989, effective Feb. 15, 1990. Emergency amendment filed Feb. 21, 1990, effective March 5, 1990, expired June 2, 1990. Amended: Filed Feb. 26, 1990, effective June 11, 1990. Amended: Filed Dec. 12, 1990, effective June 10, 1991. Amended: Filed Oct. 1, 1996, effective June 30, 1997. *Original authority: 374.045, RSMo (1967), amended 1993, 1945 and 375.1000–375.1018 see Missouri Revised Statutes 1984.