Alabama Administrative Code › Title 482 - ALABAMA DEPARTMENT OF INSURANCE › Chapter 482-1-065 - PROCEDURAL RULES GOVERNING ADMINISTRATIVE HEARINGS › Section 482-1-065-.04 - Rules Of Procedure

Current through Register Vol. 42, No. 9, June 28, 2024
Rule 1. Scope of Rules.
(a) These rules shall be applicable for all hearings conducted
				by a hearing officer under the provisions of any section in the Alabama Code
				requiring a hearing and also for any hearing held by the Commissioner under his
				or her discretionary or implied powers to hold hearings.
(b) No rule or portion of these rules may be waived without
				express written permission of the hearing officer under the provisions of
				Section 27-2-28. Waiver may also be given
				orally in open hearing.
(c) If the hearing officer is required to decide a matter
				during a hearing not covered by these rules or by any provision of the
				Insurance Code or related statutes, he or she shall decide the matter, as much
				as practical, under the provisions of the Alabama Rules of Civil Procedure for
				Circuit Court non-jury actions.
(d) This rule is not to be interpreted as requiring the formal
				application of rules under the Alabama Rules of Civil Procedure, or restricting
				the authority of the hearing officer in deciding any matter in the manner
				which, in his or her opinion, the ends of justice would be met or restricting
				any evidence, which in his or her opinion, needed to be brought out. The
				opinion of the hearing officer shall be paramount so long as it does not
				conflict with these rules, statutes, court decisions or regulations.
(e) These rules shall apply to rate hearings and orders under
				the provisions of Chapter 13 of Title 27 of the Insurance Code.
(f) Where a conflict exists between this chapter and any
				Alabama statute, the statute shall prevail.
Rule 2. Notice of Hearing.
(a) Hearings on Complaints.
(1) Any hearing to be held, whereby any person, insurance
				producer, service representative, insurer, company, or any other entity could
				be subjected to a penalty of suspension or revocation of license or certificate
				of authority or a monetary penalty or any other penalty or supervision, shall
				commence with a complaint.
(2) The complaint shall conform to the provisions of Section
				27-2-18, and every allegation
				shall be simple, concise, and direct. No technical forms of pleading or motions
				are required.
(3) Any person, other than the Department, demanding a hearing
				before the Commissioner shall make such demand by filing an affidavit with the
				Commissioner. Said affidavit shall contain sufficient factual information to
				show a reasonable cause to believe that violations of the Insurance Code have
				occurred or that the subject matter otherwise comes under the jurisdiction of
				the Commissioner and that a hearing is appropriate. The Department may
				investigate the allegations and initiate a complaint in the name of the
				Department. Otherwise, the affidavit shall constitute the complaint which the
				Commissioner shall serve upon the defendant with an appropriate summons or
				notice. No affidavit is necessary when the Department institutes the
				action.
(b) Hearings on Matters other than Complaints. Notice of
				hearing scheduling a hearing on a matter other than a complaint or matter under
				Paragraph (a), if requested by a person, insurer, company, or other entity,
				other than the Department, shall set out in the notice the identity of the
				party requesting the hearing and otherwise conform to the requirements of
				Section 27-2-18.
(c) Amendment of Complaints and Notices. Any complaint or
				notice of hearing may be amended at any time prior to the hearing, but the time
				required by law to run prior to the hearing shall start again from the date of
				receiving the amended complaint or notice.
Rule 3. Service of Complaints and Notices.
(a) Complaints and notices of hearings shall be sent by
				registered or certified mail in the manner prescribed under the Insurance Code.
				Evidence that the complaint or notice was placed in the United States mail
				shall be prima facie that proper notice was given.
(b) As the Insurance Code requires every insurance producer and
				service representative to promptly notify the Department of a change of
				address, a complaint or notice of hearing sent to such a licensee's last
				address of record at the Department shall be prima facie evidence that proper
				service and notice was given.
(c) Any insurance producer or service representative refusing
				to accept registered or certified mail sent by the Department shall be deemed
				to have received said mail and be familiar with its contents.
(d) The willful refusal or failure to accept registered or
				certified mail, identified as being sent by the Department, on the part of any
				licensed producer, service representative, adjuster, or insurer, shall be
				deemed a willful violation of a regulation.
(e) Where the individual or entity to be served with a notice
				of hearing or complaint is not a producer or service representative subject to
				the provisions of §
								27-7-17(b),
				service of the notice of hearing or complaint shall be made using the same
				methods as are available in Circuit Court in accordance with the Alabama Rules
				of Civil Procedure.
Rule 4. Answer Required After Complaint Issued.
(a) With the exception of hearings called under the provisions
				of Sections
				27-2-33 through
				27-2-38, all complaints shall
				state that the accused is required to mail or hand deliver a written answer
				either specifically admitting or denying each allegation in the complaint, and
				that any allegations not denied are admitted. The Department shall not be
				required to prove any allegation so admitted.
(b) The answer shall be mailed or delivered to the Department
				within thirty (30) days from the date the accused received the complaint, or
				every allegation of the complaint shall be deemed admitted by default.
Rule 5. Hearings to be scheduled after Receipt of
				Answer.
(a) Upon receiving the answer as required under Rule 4, the
				hearing officer shall schedule a hearing to determine those issues still in
				controversy after receipt of the answer.
(b) If the accused admits in writing every allegation of the
				complaint, the hearing officer may, without a hearing, take any necessary or
				appropriate action allowed under the law the same as if he or she had found the
				violations upon an evidentiary hearing.
(c) The hearing shall be scheduled at least twenty (20) days
				after the answer is filed with the Department. The notice of hearing shall set
				out those issues still to be determined.
(d) This rule only applies to those complaints falling under
				the provisions of Rule 4.
Rule 6. Discovery.
(a) Any party to any hearing conducted under these rules shall
				be allowed discovery to include depositions, use of subpoenas and subpoenas
				duces tecum to compel attendance of witnesses and production of
				documents.
(b) Generally, the different methods of discovery allowed by
				the Alabama Rules of Civil Procedure shall be allowed, but it is incumbent upon
				the parties to complete discovery prior to the hearing.
(c) Depositions and requests for admissions of the Commissioner
				or any employee of the Department shall only be had at the discretion of the
				hearing officer. Any party requesting depositions or admissions from any
				departmental employees must demonstrate that the ends of justice shall not be
				met unless this discovery is allowed.
Rule 7. Hearings.
(a) The Parties Conducting the Hearing. The Commissioner, or
				his or her delegated authority, shall preside over the hearing as hearing
				officer. So far as practical, the Assistant Attorneys General or Deputy
				Attorney General assigned to the Department shall present the case on behalf of
				the Department, but questions from certain experts representing either party
				may be allowed if in the opinion of the hearing officer the hearing may be
				expedited by such questioning.
(b) Representation. The accused may represent himself or
				herself or be represented by legal counsel.
(c) Dismissing the Hearing. If, at any time prior to or during
				the hearing, the hearing officer or the Assistant Attorney General or Deputy
				Attorney General representing the Department is of the opinion that the
				evidence is insufficient to prove the allegations in the complaint, or any
				portion thereof, or that the complaint was brought in bad faith or for any
				other reason requiring that the ends of justice be met to stop or not convene
				the hearing, then the complaint or any portion of the complaint meeting the
				above criteria shall be dismissed.
(d) Burden of Proof -- General Rule. As in civil cases at law,
				as a general rule, the party asserting an affirmative issue alleged in the
				pleadings has the burden of proving said issue by a preponderance of the
				evidence.
(e) Burden of Proof -- Negative Allegation. The party asserting
				a negative allegation has the burden of proving said negation by only slight
				evidence, which then shifts to the other party the burden of proving said issue
				by a preponderance of the evidence.
Rule 8. Transcription of Hearing.
(a) The hearing reporter shall make a full stenographic record
				of every hearing.
(b) The transcript shall be a part of the record of the
				hearing. A copy of the transcript shall be furnished to any party to such
				hearing at the request and expense of such party.
(c) The Commissioner shall be the custodian of all exhibits
				introduced at a hearing, but he or she shall furnish copies, so far as
				practical, to any party to the hearing, requesting same.
Rule 9. Evidence.
(a) The only evidence that the hearing officer shall consider
				in making a finding of fact shall be sworn testimony, exhibits accepted in the
				hearing, and admitted pleadings.
(b) Hearsay Evidence. Hearsay testimony shall be allowed in any
				hearing so long as it has probative value, but hearsay evidence alone shall not
				be sufficient to prove any material fact, unless such hearsay evidence would be
				admissible in a non-jury Civil Action in the Circuit Courts of the
				State.
(c) Affidavits. Affidavits shall be admissible in any hearing
				so long as they have probative value and the affiant, for reasons of
				impossibility or impracticality, cannot be present for testimony at the
				hearing. The burden of impossibility or impracticality shall be upon the
				offeror of the affidavit. No material fact shall be proven by affidavit
				alone.
(d) Depositions. The right of introducing evidence by
				deposition at a hearing shall be the same as is available in the Circuit Courts
				in accordance with the Alabama Rules of Civil Procedure.
(e) Official Notice. All statutes of the State of Alabama and
				all published rules, regulations and informational bulletins issued by the
				Department shall be deemed admissible by mere identification of the State
				statute, published rules, regulations and informational bulletins.
(f) Admissibility. All evidence, whether documentary or ore
				tenus, to be admissible, shall be germane, material and relevant to the issues
				brought out by the complaint, answer or notice of hearing. Evidence that might
				otherwise be germane, material or relevant, if found to be repetitious, may, at
				the discretion of the hearing officer be disallowed.
(g) Documentary Evidence. Any document or a copy of said
				document shall be admissible if the document or copy shall be proven to be a
				part of the business record of any party, person, or company kept in the
				ordinary course of the business of said party, person or company. The document
				shall also be required to meet requirements of Rule 9(f).
(h) Witnesses.
(1) The hearing officer may compel any person to testify under
				oath at any hearing.
(2) Any party to a hearing may compel any witness to testify
				under oath at the hearing, except that the Commissioner, or his or her
				delegated representative, and the Assistant Attorney General or Deputy Attorney
				General representing the Department shall be required to testify only if it is
				demonstrated that the ends of justice would not be met without their sworn
				testimony.
(3) The Commissioner may compel the testimony of any witness
				refusing to obey his or her subpoena pursuant to Section
				27-2-26(c).
Rule 10. Continuance of Hearing.
Any continuance of a hearing granted shall only be by express
				written consent of the hearing officer for good cause shown.
Rule 11. Withdrawing of Complaint.
(a) When any person, company, insurer or other entity has
				complained to the Commissioner of an alleged violation of any matter under the
				Commissioner's jurisdiction, by affidavit and requested a hearing, then the
				complaining person shall not be allowed to withdraw the complaint and affidavit
				without the express written consent of the hearing officer.
(b) If the complaining party is a person or insurer currently
				holding a license or certificate of authority from the Department, and the
				request to withdraw the complaint and affidavit is refused, then the party
				shall, at the request of the Commissioner, render any and all aid necessary to
				include offering sworn testimony and making available documents to prove the
				facts alleged in the affidavit. Failure of the complaining party to act in good
				faith to assist in proving the allegations in the affidavit may subject the
				above to a hearing for the willful violation of a regulation, under the
				provisions of Section
				27-2-17(e).
Rule 12. Orders.
(a) All orders issued either pursuant to a hearing, or from any
				other cause, shall conform to the provisions of Sections
				27-2-18 and
				27-2-31. In addition to the above
				requirements, if the person presiding over the hearing is other than the
				Commissioner, he or she shall be so identified in the order.
(b) All orders issued pursuant to hearings shall contain
				specific findings of fact tending to prove or disprove each and every issue
				required under law to be proven or disproven. No penalty shall be imposed by
				the order unless the findings of fact prove the material issues required under
				law to be proven to sustain the alleged violations.
(c) For orders on issues other than complaints, the findings of
				fact must show that there is compliance with the statutory provisions required
				to be found. No approval of matters such as reinsurance, mergers, and
				acquisitions, shall be made without the appropriate findings of fact being
				made, as required under the law.
(d) Whoever presides over a hearing, either the Commissioner or
				his or her delegated representative, shall be entirely responsible for the
				findings of fact and the appropriate penalties, approvals, findings of
				innocence or guilt or disapprovals of the matter at hand. He or she shall
				impose the correct penalty, under the law as is necessary and required after
				presiding over the entire hearing, or make any other order or ruling required
				by the appropriate statute under which the hearing was held.
(e) If the person presiding over the hearing is the delegated
				representative of the Commissioner, he or she shall state in the order the
				following words and also sign the order:
"DONE AND ORDERED, UNDER THE DELEGATED AUTHORITY OF THE
				COMMISSIONER OF INSURANCE, THIS (DATE).
JOHN DOE
TITLE
HEARING OFFICER"
Rule 13. Penalties.
(a) If the findings of fact prove the material issues required
				under law to be proven to sustain the alleged violations, the order shall
				impose the penalty allowed under the statute that, in the opinion of the
				hearing officer, would be in the best interest of the citizens of this
				State.
(b) An assessment of penalty, upon a finding of guilt, is not
				mandatory, but the hearing officer shall instead take into account the
				seriousness of the violation, willfulness on the part of the actor, attempts to
				make restitution, and any other factor deemed by him or her germane in deciding
				the correct penalty.
(c) If there is a finding of guilt of any person, as defined in
				Section 27-1-2(3), not
				licensed at the time of the order, the penalty may be suspension or revocation
				of the eligibility to hold or apply for licenses.
Rule 14. Rehearings.
(a) Requests for rehearings shall conform to the provisions of
				Section 27-2-30(g).
				Rehearings shall not be granted unless it is demonstrated that new evidence not
				otherwise available at the first hearing should be taken and that this evidence
				would materially affect the findings of the hearing officer, or that it is
				otherwise required in order to meet the ends of justice. The determination of
				whether to convene a new hearing shall only be made by the person signing the
				order at the conclusion of the hearing.
(b) This rule shall not be interpreted as restricting the power
				or authority of the Commissioner to convene a new hearing on the same issue or
				matters as have been brought out in previous hearings, if the ends of justice
				so merit.
Rule 15. Default.
(a) When a complaint is deemed admitted pursuant to Rule 4, the
				hearing officer may, without a hearing, take any necessary or appropriate
				action allowed under the law the same as if he or she had found the violations
				upon an evidentiary hearing.
(b) The hearing officer may set aside an order entered pursuant
				to Rule 15(a) upon motion of the accused filed not later than thirty (30) days
				after the date of said order, which motion shall allege and prove, by attached
				affidavit, a meritorious defense to the allegations of the complaint.
(c) The hearing officer shall enter an order either granting
				such motion and allowing the accused ten (10) days to file an answer pursuant
				to Rule 4, or denying the motion, setting forth the reasons therefor.
(d) An order denying a timely filed motion pursuant to this
				rule may be appealed as provided in Rule
				482-1-065-.06.
Rule 16. Emergency Action.
(a) Whenever it may appear to the Commissioner, either upon
				investigation or otherwise, that any person, as defined in Section
				27-1-2(3),
Code of Ala. 1975
, has engaged in, is engaged in, or
				is about to engage in any act, practice or transaction which is prohibited by
				Title 27,
Code of Ala. 1975
, or by any rule,
				regulation or order of the Commissioner promulgated or issued pursuant to said
				title or which is declared to be unlawful under said title, the Commissioner
				may, at his or her discretion, issue an order, if he or she deems it to be
				appropriate in the public interest or for the protection of policyholders or
				the citizens of this State, prohibiting such person from conducting such act,
				practice or transaction.
(b) Notwithstanding any other provision of this chapter, in
				situations where persons, as defined in Section
				27-1-2(3) of the
Code of Ala. 1975
, otherwise would be entitled to a
				hearing prior to an order, the Commissioner may:
(1) Issue a proposed order to be effective upon a later date
				without hearing, unless persons subject to the order request a hearing within
				ten (10) days after receipt of the proposed order.
(2) Issue an order to be effective immediately, if the
				Commissioner has reasonable cause to believe that an act, practice or
				transaction is occurring or is about to occur and that the situation
				constitutes a situation therefore imperatively requiring emergency action. The
				emergency order shall contain findings to this effect and reasons for the
				determination.
(c) Any order issued pursuant to this rule shall contain or be
				accompanied by a notice of opportunity for hearing which clearly explains that
				a hearing will be held if and only if a person subject to the order requests a
				hearing within ten (10) days of receipt of the order and notice.
(d) Any order or notice issued pursuant to this rule shall
				conform to the provisions of Section
				27-2-18,
Code of Ala.
				1975
, and shall be served in the same manner as complaints and
				according to Rule 3.
(e) The failure to request a hearing shall constitute a waiver
				of any provisions of law for a hearing. However, any person against whom an
				emergency order has been entered pursuant to this rule shall be entitled to
				apply for a hearing for relief from such order in the manner provided in
				Section 27-2-28,
Code of Ala.
				1975
, and these rules.
Author:
Commissioner of Insurance
Statutory Authority:
Code of Ala.
				  1975
, §§
										27-2-17,
				  27-2-18,
				  27-2-26,
				  27-2-28,
				  27-2-30,
				  27-2-31.