MO Rev Stat § 375.1160 (2021)
2021 Missouri Revised Statutes|Title XXIV - Business and Financial Institutions|Chapter 375 - Provisions Applicable to All Insurance Companies|Section 375.1160 - Administrative supervision by director, procedures, allowed when — proceedings confidential, exceptions — powers of administrative supervisor — penalties for violations — director may adopt rules — immunity from liability for director and employees.

Effective - 28 Aug 2007   375.1160. Administrative supervision by director, procedures, allowed when — proceedings confidential, exceptions — powers of administrative supervisor — penalties for violations — director may adopt rules — immunity from liability for director and employees. — 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 duly commissioned examiners;  (b) A domestic insurer has unlawfully removed from this state or is unable to produce books, papers, accounts or records necessary for an examination of the insurer;  (c) The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and requests relating thereto;  (d) The insurer has neglected or refused to observe an order of the director to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock or surplus;  (e) The insurer is continuing to transact insurance or write business after its license has been revoked or suspended by the director;  (f) The insurer, by contract or otherwise, has unlawfully or has in violation of an order of the director or has without first having obtained written 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 business with another insurer;  (g) The insurer engaged in any transaction in which it is not authorized to engage under the laws of this state;  (h) A domestic insurer has committed or engaged in, or is about to commit or engage in, any act, practice or transaction that would subject it to delinquency 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 the insurer.  2. (1) An insurer may be subject to administrative supervision by the director if upon examination or at any other time it appears in the director's discretion that:  (a) The insurer's condition renders the continuance of its business hazardous to the public or to its insureds;  (b) The insurer exceeded its powers granted under its certificate of authority and applicable law;  (c) The insurer has failed to comply with the laws of this state relating 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 in subdivision (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 rescind his determination; and  (c) Notify the insurer that it is under the supervision of the director and that the director is applying and effectuating the provisions of this section.  (3) The notice of supervision under this subsection and any order issued pursuant to this section shall be served upon the insurer in writing by registered mail. The notice of supervision shall state the conduct, condition or ground upon which the director bases his order.  (4) If placed under administrative supervision, the insurer shall have sixty days, or another period of time as designated by the director, to comply with the requirements of the director subject to the provisions of this section. In the event of such insurer's failure to comply with such time periods, the director may institute proceedings under section 375.1165 or 375.1175 to have a rehabilitator or liquidator appointed, or to extend the period of supervision.  (5) If it is determined that none of the conditions giving rise to the supervision 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 other information in the possession of the director or the department relating to the supervision of any insurer are confidential except as provided by this section.  (2) Personnel of the department shall have access to these proceedings, hearings, notices, orders, correspondence, reports, records or information as permitted by the director.  (3) The director may open the proceedings or hearings or disclose the notices, orders, correspondence, reports, records or information to a department, agency or instrumentality of this or another state or the United States if the director determines that the disclosure is necessary or proper for 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 the notices, orders, correspondence, reports, records or other information if the director deems that it is in the best interest of the public or in the best interest 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 a receiver for the insurer by a court of competent jurisdiction.  4. During the period of supervision, the director or his designated appointee shall serve as the administrative supervisor. The director may provide that the insurer shall not do any of the following things during the period of supervision, without the prior approval of the director or the appointed supervisor:  (1) Dispose of, convey or encumber any of its assets or its business in force;  (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 insurance policy, 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 loan values, 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 the preferential payment of bonuses, dividends or other payments deemed preferential.  5. Any insurer subject to a supervision order under this section may seek review pursuant to section 536.150 of that order within thirty days of the entry of the order of supervision. Such a request for a hearing shall not stay the effect of the order.  6. During the period of supervision the insurer may contest an action taken or proposed to be taken by the administrative supervisor specifying the manner in which the action being complained of would not result in improving the condition of the insurer. An insurer may request review pursuant to section 536.150 of written denial of the insurer's request to reconsider pursuant to this subsection.  7. If any person has violated any supervision order issued under this section which as to him was still in effect, the director may initiate an action under section 375.1161.  8. In the event that any person, subject to the provisions of sections 375.1150 to 375.1246, including those persons described in subsection 1 of section 375.1156, shall knowingly violate any valid order of the director issued under the provisions of this section and, as a result of such violation, the net worth of the insurer shall be reduced or the insurer shall suffer loss it would not otherwise have suffered, said person shall become personally liable to the insurer for the amount of any such reduction or loss. The director or administrative supervisor is authorized under subsection 1 of section 375.1161 to bring an action on behalf of the insurer in any court of competent jurisdiction to recover the amount of reduction or loss together with any costs.  9. Nothing contained in sections 375.1150 to 375.1246 shall preclude the director from initiating judicial proceedings to place an insurer in conservation, rehabilitation or liquidation proceedings or other delinquency proceedings, however designated under the laws of this state, regardless of whether the director has previously initiated administrative supervision proceedings under this section against the insurer.  10. The director may adopt reasonable rules necessary for the implementation of this section.  11. Notwithstanding any other provision of law, the director may meet with an administrative supervisor appointed under this section and with the attorney or other representative of the administrative supervisor, without the presence of any other person, at the time of any proceeding or during the pendency of any proceeding held under authority of this section to carry out his duties under this section or for the administrative supervisor to carry out his duties under this section.  12. There shall be no liability on the part of, and no cause of action of any nature shall arise against, the director or the department of commerce and insurance or its employees or agents for any action taken by them in the performance of their powers and duties under this section. ­­-------- (L. 1991 H.B. 385, et al. § 56, A.L. 1992 H.B. 1574, A.L. 2007 S.B. 66)