PURPOSE: This regulation describes those patterns which may constitute reason for the director of insurance to order an investigation. This regulation was adopted pursuant to section 354.120, RSMo 1986 and to implement sections 354.110, 354.115 and 354.170, RSMo 1986.

1. (1) Grounds for Investigation. Corporate problems and mere patterns of action will be established by receipt of written grievances from individual members of the health service corporation. The following patterns may appear and may constitute reason for the director of insurance to order an investigation of the operations of the health service corporation:

   1. (A) Misrepresenting to members any pertinent facts or membership contract provisions relating to any benefits;
   2. (B) Failing to acknowledge and act promptly upon communications concerning benefits arising under membership contracts;
   3. (C) Failing to implement reasonable standards for the prompt investigation, evaluation and payment of proper benefits arising under membership contracts;
   4. (D) Failing to affirm or deny benefits coverage within a reasonable time after proof of loss or service report requirements have been submitted by the member or beneficiary;
   5. (E) Compelling members to institute litigation to recover substantially the same amount for which the claim was originally made where no substantial issue of law or fact exists; and
   6. (F) Failing to provide promptly a reasonable explanation of the basis relied on in the membership contract, in relation to the facts or applicable law, for the denial of a benefit or for the offer of a compromise settlement.

AUTHORITY: sections 354.110, 354.115, 354.120 and 354.170, RSMo 1986*. This rule was previously filed as 4 CSR 190- 15.040. Original rule filed Sept. 18, 1974, effective Sept. 28, 1974. *Original authority: 354.110, RSMo 1973; 354.115, RSMo 1973; 354.120, RSMo 1973; and 354.170, RSMo 1973.