Market Conduct Section
Completed 2003 Market Conduct Exams
The Market Conduct Section performs field examinations of life, accident and health, property and casualty insurance companies, title companies, health maintenance organizations, health service corporations, third party administrators and statistical reporting agencies. These examinations try to ensure equitable treatment of Missouri policyholders and compliance with Missouri statutes and regulation on:
- Licensing of agents, agencies and brokers.
- Marketing and advertising practices.
- Company rates, rating policies and procedures.
- Underwriting.
- Policy forms.
- Claims handling.
- Complaint handling.
- Unclaimed property.
During 2002 the Market Conduct Section completed examinations of 44 companies and assessed forfeitures of $1,042,358 payable to the Missouri State School Fund. For some violations, insurance companies also are required to pay restitution to the consumer, either by refiguring claims or re-evaluating policy the premiums. In 2002 the total amount recovered for consumers was $7.1 million, primarily in refunds to consumers who had been charged higher life insurance premiums simply because they were minorities.
Market conduct examinations also ensure compliance with nationwide settlements, whether through the federal courts, federal agencies, another state's insurance department or mutual agreements.
The insurer signs settlement agreements and pay forfeitures (fines) when examination finds errors that exceed national tolerance levels and the department believes a monetary penalty will ensure compliance, either because of prior violations or the severity of new findings.
A cure order is issued when Insurance conducts an examination and finds errors that exceed the tolerance levels, but are not serious enough to merit fines. The order requires the company to "cure" the violations in the report.
A filing order is issued when Insurance has conducted an examination and found no violations that exceed acceptable tolerance ranges established by the NAIC. A 10 percent tolerance level has been established for underwriting errors and 7 percent for claims handling.
2002 market conduct examinations
The following amounts were recovered for consumers:
| Reasons | Amount |
|---|---|
| Rate overcharges | $38,636 |
| Claim underpayments | $17,645 |
| Other recoveries/restitution | $225,241 |
| Race based premium exams and settlement | Reliable Life, $2 million; MetLife, $4.8 million; Life of Georgia, $71,621 |
Total amount of forfeitures (fines) and recoveries – $8,195,501
| Company / Group | Settlement / Forfeiture | Claim underpayment / Extra payments |
|---|---|---|
| Healthnet | $52,500/Stipulation | |
| Physician's Mutual | $13,684/Stipulation | |
| Hartford Group | $33,178/Stipulation | $5,841 |
| CNA Group | $24,643/Stipulation | $29,091 |
| Trustmark Insurance Co | $117,550/Stipulation | $124 |
| G.E. Capitol Assurance | $16,196/Stipulation | |
| Atlantic Mutual | $4,236/Stipulation | $726 |
| Connecticut General Life | $17,100/Stipulation | $157 |
| Good Health | $74,335/Stipulation | $27,133 |
| Tri-source Healthcare | $93,413/Stipulation | $38,400 |
| American National Group | Cure order | |
| Standard Life | $28,294/Stipulation | |
| Golden Rule Multistate | $200,000/Stipulation | |
| National General Group (GMAC) | Filing order | |
| Liberty Mutual Group | Filing order | |
| Chubb Group | $35,121/Stipulation | $23,854 |
| American Bankers of Florida - Multistate | $113,114/Stipulation | |
| American Alternative | $10,350/Stipulation | |
| Federated Insurance Co. | $15,907/Stipulation | $256 |
| Christian Fidelity | $61,655/Stipulation | $146,900 |
| Meadowbrook Group | $22,039/Stipulation | $5,649 |
| MetLife | $4,800,000/Stipulation | $4,800,000 |
| Life of GA | $1,000/Stipulation | $71,621 |
| Reliable Life Insurance | $108,044/Stipulation | $2,003,391 |
Statistics
In 2003, the free-standing Statistics Section became part of Insurance's market conduct operations, reflecting the integral role that in-office market analysis plays in targeting market conduct exams to those companies most likely to have mistreated consumers. In fact, a 2003 U.S. General Accounting office report cited Missouri as the only state with a full-fledged, mature market analysis program and urged other states to adopt that approach.
The statisticians assemble and use databases, publish reports on insurance markets in Missouri for consumers, insurance companies and departmental staff monitors/the availability and affordability of insurance coverage in Missouri.
The following reports are prepared annually by market analysis/statistics of the market conduct section.
- Complaint Index Report: complaints filed against Missouri insurers during the past three years. Companies are categorized by line of business and type of complaint. Company performance is compared to the Missouri industry average.
- Market Share Report: market data for the top 35 firms and insurance groups and insurance groups, including historical trends, for each line of business.
- Homeowners Insurance Report: Zip Code-level premium and loss data for homeowners insurance in Missouri. Data is presented by demographic groups and geographic regions for the decade ending in the latest data year.
- Private Passenger Automobile Report: 10 years of Zip Code-level premium and loss data.
- Medical Malpractice Report: aggregate claims for the three years before the report. Includes information on claim frequency, loss ratios by company, by type of insured, average dollar settlements, litigated claims, average time to close claims and other trends in medical malpractice.
- Real Estate Malpractice Report: a 10-year summary by area of real estate for filed claims, major activity responsible for alleged error or omission, most significant reasons for claims, years of real estate experience for the insured and relationship of the insured to the claimant.
- Legal Malpractice Report: 10 years of data presented by area of law for the insured, major activity responsible for alleged error or omission, most significant reasons for claims, legal disposition of claims, number of years in practice by insureds and relationship of insured to the claimant.
- Life, Accident & Health Supplement Data Report: information on all life and non-HMO health insurers, health service corporations and fraternal companies licensed to operate in Missouri. The data include detailed financial and premium information by company, by line of business, market share, life insurance in force and health benefits ratios.
- Mortgage Guaranty Insurance Report: data for more than two decades for both residential and commercial lines of mortgage guaranty insurance. The data include earned premium by company, losses paid, outstanding claims reserves, IBNR reserves, contingency reserves, loaded loss ratios and true loss ratios.
- Property & Casualty Supplement Report: data on written premium, loss ratios, and other information for all property and casualty insurers licensed in Missouri for all major lines of business.
The section also maintains the following databases:
- Missouri Zip Code Insurance Data for Homeowners/Dwelling Fire, Farmowners, Mobile Home, Earthquake Endorsements, and Private Passenger Automobile: Missouri law requires insurers writing personal lines insurance to file data by zip code, including exposures written, premium written, loss paid count and losses paid. Data is collected on an annual basis.
- Medicare Supplement Experience Data: Since 1982, companies writing Medicare supplement insurance have reported their experience by policy number. Included are annual premium and loss experiences.
- Commercial Liability Experience Data: the database provides information on companies writing commercial liability insurance, including a profitability report and a summary of the claims, closed and outstanding, for specific commercial lines of insurance.
Completed 2001 Market Conduct Exams
Completed 2000 Market Conduct Exams
Completed 1999 Market Conduct Exams
Completed 1998 Market Conduct Exams