Administrative supervision by director, procedures, allowedwhen--proceedings confidential, exceptions--powers ofadministrative supervisor--penalties for violations--director mayadopt rules--immunity from liability for director and employees.
375.1160. 1. As used in this section:
(1) "Exceeded its powers" means one or more of the following conditions:
(a) The insurer has refused to permit examination of its books, papers,accounts, records or affairs by the director, his deputy, employees or dulycommissioned examiners;
(b) A domestic insurer has unlawfully removed from this state or isunable to produce books, papers, accounts or records necessary for anexamination of the insurer;
(c) The insurer has failed to promptly comply with the applicablefinancial reporting statutes or rules and requests relating thereto;
(d) The insurer has neglected or refused to observe an order of thedirector to make good, within the time prescribed by law, any prohibiteddeficiency in its capital, capital stock or surplus;
(e) The insurer is continuing to transact insurance or write businessafter its license has been revoked or suspended by the director;
(f) The insurer, by contract or otherwise, has unlawfully or has inviolation of an order of the director or has without first having obtainedwritten approval of the director if approval is required by law:
a. Totally reinsured its entire outstanding business, or
b. Merged or consolidated substantially its entire property or businesswith another insurer;
(g) The insurer engaged in any transaction in which it is not authorizedto engage under the laws of this state;
(h) A domestic insurer has committed or engaged in, or is about tocommit or engage in, any act, practice or transaction that would subject it todelinquency proceedings under sections 375.1150 to 375.1246; or
(i) The insurer refused to comply with a lawful order of the director;
(2) "Consent" means agreement to administrative supervision by theinsurer.
2. (1) An insurer may be subject to administrative supervision by thedirector if upon examination or at any other time it appears in the director'sdiscretion that:
(a) The insurer's condition renders the continuance of its businesshazardous to the public or to its insureds;
(b) The insurer exceeded its powers granted under its certificate ofauthority and applicable law;
(c) The insurer has failed to comply with the laws of this staterelating to insurance;
(d) The business of the insurer is being conducted fraudulently; or
(e) The insurer gives its consent.
(2) If the director determines that the conditions set forth insubdivision (1) of this subsection exist, the director shall:
(a) Notify in writing the insurer of his determination;
(b) Furnish to the insurer a written list of his requirements to rescindhis determination; and
(c) Notify the insurer that it is under the supervision of the directorand that the director is applying and effectuating the provisions of thissection.
(3) The notice of supervision under this subsection and any order issuedpursuant to this section shall be served upon the insurer in writing byregistered mail. The notice of supervision shall state the conduct, conditionor ground upon which the director bases his order.
(4) If placed under administrative supervision, the insurer shall havesixty days, or another period of time as designated by the director, to complywith the requirements of the director subject to the provisions of thissection. In the event of such insurer's failure to comply with such timeperiods, the director may institute proceedings under section 375.1165 or375.1175 to have a rehabilitator or liquidator appointed, or to extend theperiod of supervision.
(5) If it is determined that none of the conditions giving rise to thesupervision exist, the director shall release the insurer from supervision.
3. (1) Except as set forth in this subsection, all proceedings,hearings, notices, orders, correspondence, reports, records and otherinformation in the possession of the director or the department relating tothe supervision of any insurer are confidential except as provided by thissection.
(2) Personnel of the department shall have access to these proceedings,hearings, notices, orders, correspondence, reports, records or information aspermitted by the director.
(3) The director may open the proceedings or hearings or disclose thenotices, orders, correspondence, reports, records or information to adepartment, agency or instrumentality of this or another state or the UnitedStates if the director determines that the disclosure is necessary or properfor the enforcement of the laws of this or another state of the United States.
(4) The director may open the proceedings or hearings or make public thenotices, orders, correspondence, reports, records or other information if thedirector deems that it is in the best interest of the public or in the bestinterest of the insurer, its insureds, creditors or the general public.
(5) This subsection does not apply to hearings, notices, correspondence,reports, records or other information obtained upon the appointment of areceiver for the insurer by a court of competent jurisdiction.
4. During the period of supervision, the director or his designatedappointee shall serve as the administrative supervisor. The director mayprovide that the insurer shall not do any of the following things during theperiod of supervision, without the prior approval of the director or theappointed supervisor:
(1) Dispose of, convey or encumber any of its assets or its business inforce;
(2) Withdraw any of its bank accounts;
(3) Lend any of its funds;
(4) Invest any of its funds;
(5) Transfer any of its property;
(6) Incur any debt, obligation or liability;
(7) Merge or consolidate with another company;
(8) Approve new premiums or renew any policies;
(9) Enter into any new reinsurance contract or treaty;
(10) Terminate, surrender, forfeit, convert or lapse any insurancepolicy, certificate or contract, except for nonpayment of premiums due;
(11) Write any new or renewal business;
(12) Release, pay or refund premium deposits, accrued cash or loanvalues, unearned premiums, or other reserves on any insurance policy,certificate or contract;
(13) Make any material change in management; or
(14) Increase salaries and benefits of officers or directors or thepreferential payment of bonuses, dividends or other payments deemedpreferential.
5. Any insurer subject to a supervision order under this section mayseek review pursuant to section 536.150, RSMo, of that order within thirtydays of the entry of the order of supervision. Such a request for a hearingshall not stay the effect of the order.
6. During the period of supervision the insurer may contest an actiontaken or proposed to be taken by the administrative supervisor specifying themanner in which the action being complained of would not result in improvingthe condition of the insurer. An insurer may request review pursuant tosection 536.150, RSMo, of written denial of the insurer's request toreconsider pursuant to this subsection.
7. If any person has violated any supervision order issued under thissection which as to him was still in effect, the director may initiate anaction under section 375.1161.
8. In the event that any person, subject to the provisions of sections375.1150 to 375.1246, including those persons described in subsection 1 ofsection 375.1156, shall knowingly violate any valid order of the directorissued under the provisions of this section and, as a result of suchviolation, the net worth of the insurer shall be reduced or the insurer shallsuffer loss it would not otherwise have suffered, said person shall becomepersonally liable to the insurer for the amount of any such reduction or loss. The director or administrative supervisor is authorized under subsection 1 ofsection 375.1161 to bring an action on behalf of the insurer in any court ofcompetent jurisdiction to recover the amount of reduction or loss togetherwith any costs.
9. Nothing contained in sections 375.1150 to 375.1246 shall preclude thedirector from initiating judicial proceedings to place an insurer inconservation, rehabilitation or liquidation proceedings or other delinquencyproceedings, however designated under the laws of this state, regardless ofwhether the director has previously initiated administrative supervisionproceedings under this section against the insurer.
10. The director may adopt reasonable rules necessary for theimplementation of this section.
11. Notwithstanding any other provision of law, the director may meetwith an administrative supervisor appointed under this section and with theattorney or other representative of the administrative supervisor, without thepresence of any other person, at the time of any proceeding or during thependency of any proceeding held under authority of this section to carry outhis duties under this section or for the administrative supervisor to carryout his duties under this section.
12. There shall be no liability on the part of, and no cause of actionof any nature shall arise against, the director or the department ofinsurance, financial institutions and professional registration or itsemployees or agents for any action taken by them in the performance of theirpowers and duties under this section.
Administrative supervision by director, procedures, allowedwhen--proceedings confidential, exceptions--powers ofadministrative supervisor--penalties for violations--director mayadopt rules--immunity from liability for director and employees.
375.1160. 1. As used in this section:
(1) "Exceeded its powers" means one or more of the following conditions:
(a) The insurer has refused to permit examination of its books, papers,accounts, records or affairs by the director, his deputy, employees or dulycommissioned examiners;
(b) A domestic insurer has unlawfully removed from this state or isunable to produce books, papers, accounts or records necessary for anexamination of the insurer;
(c) The insurer has failed to promptly comply with the applicablefinancial reporting statutes or rules and requests relating thereto;
(d) The insurer has neglected or refused to observe an order of thedirector to make good, within the time prescribed by law, any prohibiteddeficiency in its capital, capital stock or surplus;
(e) The insurer is continuing to transact insurance or write businessafter its license has been revoked or suspended by the director;
(f) The insurer, by contract or otherwise, has unlawfully or has inviolation of an order of the director or has without first having obtainedwritten approval of the director if approval is required by law:
a. Totally reinsured its entire outstanding business, or
b. Merged or consolidated substantially its entire property or businesswith another insurer;
(g) The insurer engaged in any transaction in which it is not authorizedto engage under the laws of this state;
(h) A domestic insurer has committed or engaged in, or is about tocommit or engage in, any act, practice or transaction that would subject it todelinquency proceedings under sections 375.1150 to 375.1246; or
(i) The insurer refused to comply with a lawful order of the director;
(2) "Consent" means agreement to administrative supervision by theinsurer.
2. (1) An insurer may be subject to administrative supervision by thedirector if upon examination or at any other time it appears in the director'sdiscretion that:
(a) The insurer's condition renders the continuance of its businesshazardous to the public or to its insureds;
(b) The insurer exceeded its powers granted under its certificate ofauthority and applicable law;
(c) The insurer has failed to comply with the laws of this staterelating to insurance;
(d) The business of the insurer is being conducted fraudulently; or
(e) The insurer gives its consent.
(2) If the director determines that the conditions set forth insubdivision (1) of this subsection exist, the director shall:
(a) Notify in writing the insurer of his determination;
(b) Furnish to the insurer a written list of his requirements to rescindhis determination; and
(c) Notify the insurer that it is under the supervision of the directorand that the director is applying and effectuating the provisions of thissection.
(3) The notice of supervision under this subsection and any order issuedpursuant to this section shall be served upon the insurer in writing byregistered mail. The notice of supervision shall state the conduct, conditionor ground upon which the director bases his order.
(4) If placed under administrative supervision, the insurer shall havesixty days, or another period of time as designated by the director, to complywith the requirements of the director subject to the provisions of thissection. In the event of such insurer's failure to comply with such timeperiods, the director may institute proceedings under section 375.1165 or375.1175 to have a rehabilitator or liquidator appointed, or to extend theperiod of supervision.
(5) If it is determined that none of the conditions giving rise to thesupervision exist, the director shall release the insurer from supervision.
3. (1) Except as set forth in this subsection, all proceedings,hearings, notices, orders, correspondence, reports, records and otherinformation in the possession of the director or the department relating tothe supervision of any insurer are confidential except as provided by thissection.
(2) Personnel of the department shall have access to these proceedings,hearings, notices, orders, correspondence, reports, records or information aspermitted by the director.
(3) The director may open the proceedings or hearings or disclose thenotices, orders, correspondence, reports, records or information to adepartment, agency or instrumentality of this or another state or the UnitedStates if the director determines that the disclosure is necessary or properfor the enforcement of the laws of this or another state of the United States.
(4) The director may open the proceedings or hearings or make public thenotices, orders, correspondence, reports, records or other information if thedirector deems that it is in the best interest of the public or in the bestinterest of the insurer, its insureds, creditors or the general public.
(5) This subsection does not apply to hearings, notices, correspondence,reports, records or other information obtained upon the appointment of areceiver for the insurer by a court of competent jurisdiction.
4. During the period of supervision, the director or his designatedappointee shall serve as the administrative supervisor. The director mayprovide that the insurer shall not do any of the following things during theperiod of supervision, without the prior approval of the director or theappointed supervisor:
(1) Dispose of, convey or encumber any of its assets or its business inforce;
(2) Withdraw any of its bank accounts;
(3) Lend any of its funds;
(4) Invest any of its funds;
(5) Transfer any of its property;
(6) Incur any debt, obligation or liability;
(7) Merge or consolidate with another company;
(8) Approve new premiums or renew any policies;
(9) Enter into any new reinsurance contract or treaty;
(10) Terminate, surrender, forfeit, convert or lapse any insurancepolicy, certificate or contract, except for nonpayment of premiums due;
(11) Write any new or renewal business;
(12) Release, pay or refund premium deposits, accrued cash or loanvalues, unearned premiums, or other reserves on any insurance policy,certificate or contract;
(13) Make any material change in management; or
(14) Increase salaries and benefits of officers or directors or thepreferential payment of bonuses, dividends or other payments deemedpreferential.
5. Any insurer subject to a supervision order under this section mayseek review pursuant to section 536.150, RSMo, of that order within thirtydays of the entry of the order of supervision. Such a request for a hearingshall not stay the effect of the order.
6. During the period of supervision the insurer may contest an actiontaken or proposed to be taken by the administrative supervisor specifying themanner in which the action being complained of would not result in improvingthe condition of the insurer. An insurer may request review pursuant tosection 536.150, RSMo, of written denial of the insurer's request toreconsider pursuant to this subsection.
7. If any person has violated any supervision order issued under thissection which as to him was still in effect, the director may initiate anaction under section 375.1161.
8. In the event that any person, subject to the provisions of sections375.1150 to 375.1246, including those persons described in subsection 1 ofsection 375.1156, shall knowingly violate any valid order of the directorissued under the provisions of this section and, as a result of suchviolation, the net worth of the insurer shall be reduced or the insurer shallsuffer loss it would not otherwise have suffered, said person shall becomepersonally liable to the insurer for the amount of any such reduction or loss. The director or administrative supervisor is authorized under subsection 1 ofsection 375.1161 to bring an action on behalf of the insurer in any court ofcompetent jurisdiction to recover the amount of reduction or loss togetherwith any costs.
9. Nothing contained in sections 375.1150 to 375.1246 shall preclude thedirector from initiating judicial proceedings to place an insurer inconservation, rehabilitation or liquidation proceedings or other delinquencyproceedings, however designated under the laws of this state, regardless ofwhether the director has previously initiated administrative supervisionproceedings under this section against the insurer.
10. The director may adopt reasonable rules necessary for theimplementation of this section.
11. Notwithstanding any other provision of law, the director may meetwith an administrative supervisor appointed under this section and with theattorney or other representative of the administrative supervisor, without thepresence of any other person, at the time of any proceeding or during thependency of any proceeding held under authority of this section to carry outhis duties under this section or for the administrative supervisor to carryout his duties under this section.
12. There shall be no liability on the part of, and no cause of actionof any nature shall arise against, the director or the department ofinsurance, financial institutions and professional registration or itsemployees or agents for any action taken by them in the performance of theirpowers and duties under this section.
Administrative supervision by director, procedures, allowedwhen--proceedings confidential, exceptions--powers ofadministrative supervisor--penalties for violations--director mayadopt rules--immunity from liability for director and employees.
375.1160. 1. As used in this section:
(1) "Exceeded its powers" means one or more of the following conditions:
(a) The insurer has refused to permit examination of its books, papers,accounts, records or affairs by the director, his deputy, employees or dulycommissioned examiners;
(b) A domestic insurer has unlawfully removed from this state or isunable to produce books, papers, accounts or records necessary for anexamination of the insurer;
(c) The insurer has failed to promptly comply with the applicablefinancial reporting statutes or rules and requests relating thereto;
(d) The insurer has neglected or refused to observe an order of thedirector to make good, within the time prescribed by law, any prohibiteddeficiency in its capital, capital stock or surplus;
(e) The insurer is continuing to transact insurance or write businessafter its license has been revoked or suspended by the director;
(f) The insurer, by contract or otherwise, has unlawfully or has inviolation of an order of the director or has without first having obtainedwritten approval of the director if approval is required by law:
a. Totally reinsured its entire outstanding business, or
b. Merged or consolidated substantially its entire property or businesswith another insurer;
(g) The insurer engaged in any transaction in which it is not authorizedto engage under the laws of this state;
(h) A domestic insurer has committed or engaged in, or is about tocommit or engage in, any act, practice or transaction that would subject it todelinquency proceedings under sections 375.1150 to 375.1246; or
(i) The insurer refused to comply with a lawful order of the director;
(2) "Consent" means agreement to administrative supervision by theinsurer.
2. (1) An insurer may be subject to administrative supervision by thedirector if upon examination or at any other time it appears in the director'sdiscretion that:
(a) The insurer's condition renders the continuance of its businesshazardous to the public or to its insureds;
(b) The insurer exceeded its powers granted under its certificate ofauthority and applicable law;
(c) The insurer has failed to comply with the laws of this staterelating to insurance;
(d) The business of the insurer is being conducted fraudulently; or
(e) The insurer gives its consent.
(2) If the director determines that the conditions set forth insubdivision (1) of this subsection exist, the director shall:
(a) Notify in writing the insurer of his determination;
(b) Furnish to the insurer a written list of his requirements to rescindhis determination; and
(c) Notify the insurer that it is under the supervision of the directorand that the director is applying and effectuating the provisions of thissection.
(3) The notice of supervision under this subsection and any order issuedpursuant to this section shall be served upon the insurer in writing byregistered mail. The notice of supervision shall state the conduct, conditionor ground upon which the director bases his order.
(4) If placed under administrative supervision, the insurer shall havesixty days, or another period of time as designated by the director, to complywith the requirements of the director subject to the provisions of thissection. In the event of such insurer's failure to comply with such timeperiods, the director may institute proceedings under section 375.1165 or375.1175 to have a rehabilitator or liquidator appointed, or to extend theperiod of supervision.
(5) If it is determined that none of the conditions giving rise to thesupervision exist, the director shall release the insurer from supervision.
3. (1) Except as set forth in this subsection, all proceedings,hearings, notices, orders, correspondence, reports, records and otherinformation in the possession of the director or the department relating tothe supervision of any insurer are confidential except as provided by thissection.
(2) Personnel of the department shall have access to these proceedings,hearings, notices, orders, correspondence, reports, records or information aspermitted by the director.
(3) The director may open the proceedings or hearings or disclose thenotices, orders, correspondence, reports, records or information to adepartment, agency or instrumentality of this or another state or the UnitedStates if the director determines that the disclosure is necessary or properfor the enforcement of the laws of this or another state of the United States.
(4) The director may open the proceedings or hearings or make public thenotices, orders, correspondence, reports, records or other information if thedirector deems that it is in the best interest of the public or in the bestinterest of the insurer, its insureds, creditors or the general public.
(5) This subsection does not apply to hearings, notices, correspondence,reports, records or other information obtained upon the appointment of areceiver for the insurer by a court of competent jurisdiction.
4. During the period of supervision, the director or his designatedappointee shall serve as the administrative supervisor. The director mayprovide that the insurer shall not do any of the following things during theperiod of supervision, without the prior approval of the director or theappointed supervisor:
(1) Dispose of, convey or encumber any of its assets or its business inforce;
(2) Withdraw any of its bank accounts;
(3) Lend any of its funds;
(4) Invest any of its funds;
(5) Transfer any of its property;
(6) Incur any debt, obligation or liability;
(7) Merge or consolidate with another company;
(8) Approve new premiums or renew any policies;
(9) Enter into any new reinsurance contract or treaty;
(10) Terminate, surrender, forfeit, convert or lapse any insurancepolicy, certificate or contract, except for nonpayment of premiums due;
(11) Write any new or renewal business;
(12) Release, pay or refund premium deposits, accrued cash or loanvalues, unearned premiums, or other reserves on any insurance policy,certificate or contract;
(13) Make any material change in management; or
(14) Increase salaries and benefits of officers or directors or thepreferential payment of bonuses, dividends or other payments deemedpreferential.
5. Any insurer subject to a supervision order under this section mayseek review pursuant to section 536.150, RSMo, of that order within thirtydays of the entry of the order of supervision. Such a request for a hearingshall not stay the effect of the order.
6. During the period of supervision the insurer may contest an actiontaken or proposed to be taken by the administrative supervisor specifying themanner in which the action being complained of would not result in improvingthe condition of the insurer. An insurer may request review pursuant tosection 536.150, RSMo, of written denial of the insurer's request toreconsider pursuant to this subsection.
7. If any person has violated any supervision order issued under thissection which as to him was still in effect, the director may initiate anaction under section 375.1161.
8. In the event that any person, subject to the provisions of sections375.1150 to 375.1246, including those persons described in subsection 1 ofsection 375.1156, shall knowingly violate any valid order of the directorissued under the provisions of this section and, as a result of suchviolation, the net worth of the insurer shall be reduced or the insurer shallsuffer loss it would not otherwise have suffered, said person shall becomepersonally liable to the insurer for the amount of any such reduction or loss. The director or administrative supervisor is authorized under subsection 1 ofsection 375.1161 to bring an action on behalf of the insurer in any court ofcompetent jurisdiction to recover the amount of reduction or loss togetherwith any costs.
9. Nothing contained in sections 375.1150 to 375.1246 shall preclude thedirector from initiating judicial proceedings to place an insurer inconservation, rehabilitation or liquidation proceedings or other delinquencyproceedings, however designated under the laws of this state, regardless ofwhether the director has previously initiated administrative supervisionproceedings under this section against the insurer.
10. The director may adopt reasonable rules necessary for theimplementation of this section.
11. Notwithstanding any other provision of law, the director may meetwith an administrative supervisor appointed under this section and with theattorney or other representative of the administrative supervisor, without thepresence of any other person, at the time of any proceeding or during thependency of any proceeding held under authority of this section to carry outhis duties under this section or for the administrative supervisor to carryout his duties under this section.
12. There shall be no liability on the part of, and no cause of actionof any nature shall arise against, the director or the department ofinsurance, financial institutions and professional registration or itsemployees or agents for any action taken by them in the performance of theirpowers and duties under this section.
