ADMINISTRATIVE ORDERS AND REMEDIES OF THE DEPARTMENT OF INSURANCE - If the director of the Department of Insurance determines that a person has violated or is attempting to violate a provision of the insurance code, the director may issue:

(1) An order directing the person to cease and desist from engaging in the act, practice, omission or course of business;

(2) A curative order or order directing the person to take other action necessary or appropriate to comply with the insurance laws of this state;

(3) Order a civil penalty or forfeiture; and

(4) Award reasonable costs of the investigation.

The act provides that the director shall provide the alleged violator notice of the director's intent to issue an order unless summary action is needed to protect consumers. The act provides for administrative hearings so that alleged violators can contest the issuance of the administrative orders. The act requires the director to issue findings of fact and conclusions of law before an order becomes final. Under the act, the director is authorized to issue subpoenas, compel attendance of witnesses, administer oaths, hear testimony of witnesses, receive evidence, and require the production of books, papers, records, correspondence and all other written instruments or documents relevant to the proceeding and authorized in contested cases under the provisions of Chapter 536, RSMo. The act modifies the penalty for violating a cease and desist order issued by the Department of Insurance.

Currently, the law provides that a person who violates a cease and desist order may be punished by a maximum $1,000 fine and up to one year in jail. The act provides for a fine up to $100,000 and a term of imprisonment of 10 years (Section 374.046.16).

REVOCATION OF CERTIFICATE OF AUTHORITY - The act allows the director to suspend or revoke a corporation's or insurer's certificate of authority for violating a provision of the insurance code or for felony or misdemeanor convictions. The director must provide the corporation or insurer with 30 days notice before revoking the certificate of authority and must provide such entity with a hearing if so requested (Section 374.047).

PETITION OF CIRCUIT COURT - The act allows the director to seek redress in county circuit courts and the court may issue injunctions, freeze assets or take other remedial measures outlined in the act. The act creates the consumer restitution fund for the purpose of preserving and distributing to aggrieved consumers, disgorgement or restitution funds obtained through enforcement proceedings brought by the director (Section 374.048).

CLASSIFICATION OF ADMINISTRATIVE PENALTIES – The act classifies various violations of the insurance code into five categories. The act establishes maximum fines for each category or level violation. All fines shall go to public schools as required by the Missouri Constitution (Section 374.049).

383 ASSOCIATION ASSESSMENTS - This act provides that 383 malpractice associations articles of association and bylaws shall specify and define the types of assessments its members pay to cover losses and expenses incurred by the association. The articles of association and bylaws shall also specify the type of assessments that apply to members and former members. The act also provides that the articles of association and bylaws shall specify the exact method by which assessment amounts are determined, the time assessments must be paid, and other criteria (Section 383.016).

383 MALPRACTICE ASSOCIATIONS - This act subjects 383 malpractice associations to the medical malpractice reporting requirements of Sections 383.100 to 383.125 and subjects such organizations to certain notification, data reporting and rating requirements (Section 383.035).

FILING OF INFORMATION BY MEDICAL MALPRACTICE INSURANCE COMPANIES - This act modifies the definition of "insurer" to include 383 medical malpractice associations and self-insured health care providers for the purposes of filing medical malpractice claim reports (Section 383.105). The act requires the director of the Department of Insurance to establish by rule reporting standards in which insurers shall report annually insurance premiums, losses, exposure, and other information the director may require. This data will assist the department to monitor marketplace rates, financial solvency, affordability and the availability of medical malpractice insurance. The data collected shall be compiled in such a manner to assist medical malpractice insurers in developing future base rates, schedule rating or individual rating factors. The act requires the director to establish risk-reporting categories for medical malpractice insurance and establish regulations for the reporting of all base rates and premiums charged by such categories. These risk-reporting categories shall be established prior to May 30, 2007. Beginning June 1, 2008, medical malpractice insurers and self-insured health care providers must provide an annual report describing the actual rates or assessments charged for insurance for each of the risk-reporting categories (Section 383.106). Many of the medical malpractice reporting provisions can be found in SB 905 & 910 (2006).

PUBLISHING OF MARKET RATES - The act requires the director to establish and publish market rates using the data collected under the act. The market rate shall reflect the median of the actual rates charged by insurers (those who have at least a 3% market share) for the various risk-reporting categories for the preceding year (Section 383.107).

The director shall, utilizing the information provided by Section 383.106, publish comparisons of the base rates charged by each insurer (Section 383.108).

PENALTIES FOR NOT FILING OR REPORTING INFORMATION - If an insurer violates any of the provisions relating to reporting medical malpractice information, the director may issue administrative orders and seek other remedies outlined in the act to assure compliance (Section 383.124).

RATE FILING - Under this act, every insurer shall file with the director all rates and supplementary rate information which is to be used in the state. Such rates and supplementary rate information shall be filed before use. All rates and supplementary rate information shall, as soon as filed, be open to public inspection at any reasonable time (Section 383.196).

MEDICAL MALPRACTICE RATES - Under the act, medical malpractice insurers are prohibited from issuing and selling policies that have base rates that are excessive, inadequate, or unfairly discriminatory. The act delineates a multitude of factors that the director will use to determine whether a rate is excessive, inadequate, or unfairly discriminatory. Rates will be based upon Missouri loss experience only, not experience from other states unless the failure to do so will jeopardize the financial stability of the insurer. Investment income and losses for the insurer's previous ten-year period may also be considered. The act allows insurers to charge an additional premium surcharge or discount based on the health care provider's loss experience, training, and other factors (Section 383.198).

NOTICE PRIOR TO INCREASING RATES, REFUSAL TO RENEW POLICIES OR CEASING BUSINESS - The act prohibits medical malpractice insurers from increasing rates by more than 15% without providing at least 60 days written notice to the insured (Section 383.199). The act prohibits medical malpractice insurers from refusing to renew a policy without providing 60 days written notice. The act also prohibits medical malpractice insurers from ceasing the issuance of such policies without first providing at least 180 days notice to the Department of Insurance (Section 383.450).

HEALTH CARE STABILIZATION FUND FEASIBILITY BOARD - This act creates the Health Care Stabilization Fund Feasibility Board within the Department of Insurance to analyze medical malpractice data to determine whether a health care stabilization fund should be established in Missouri. As part of its duties, the board shall develop a comprehensive study detailing whether a health care stabilization fund is feasible within Missouri, or specified geographic regions thereof, or whether a health care stabilization fund would be feasible for specific medical specialties. If a health care stabilization fund is feasible within Missouri, the report shall also recommend to the general assembly how the fund should be structured, designed, and funded.

The board shall consist of ten members. Other than the director, the house members and the senate members, the remainder of the board's members shall be appointed by the director of the Department of Insurance. The board shall be composed of:

(1) The director of the department of insurance, or his or her designee;

(2) Two members of the Missouri senate appointed by the president pro tem of the senate with no more than one from any political party;

(3) Two members of the Missouri house of representatives appointed by the speaker of the house with no more than one member from any political party;

(4) One member who is licensed to practice medicine as a medical doctor in Missouri who is on a list of nominees submitted to the director by an organization representing Missouri's medical society;

(5) One member who practices medicine as a doctor of osteopathy and who is on a list of nominees submitted to the director by an organization representing Missouri doctors of osteopathy;

(6) One member who is a licensed nurse in Missouri and who is on a list submitted to the director by an organization representing Missouri nurses;

(7) One member who is a representative of Missouri hospitals and who is on a list of nominees submitted to the director by an organization representing Missouri hospitals; and

(8) One member who is a physician and who is on a list submitted to the director by an organization representing family physicians in the state of Missouri.

The director shall appoint the members of the board, other than the General Assembly members, no later than January 1, 2007. Once appointed, the board shall meet at least quarterly, and shall submit its final report and recommendations regarding the feasibility of a health care stabilization fund to the Governor and the General Assembly no later than December 31, 2010. The act also requires the board to submit annual reports on the board's progress. This portion of the act will expire December 31, 2010 (Section 383.515). This provision was contained in SB 939 (2006).

STEPHEN WITTE