DIFP Department of Insurance, Financial Institutions & 2011 Annual Report Jeremiah W. (Jay) Nixon John M. Huff Professional Registration Governor Director VIDEO Director John M. Huff on the responsibilities and duties of the Department of Insurance, Financial Institutions and Professional Registration. ACCOMPLISHMENTS / DIVISIONS Leadership Administration Top 10 accomplishments Finance Responding to disasters Credit Unions Tornado recovery in Joplin Professional Registration Joplin tornado timeline National leadership Insurance Consumer Affairs Insurance Market Regulation Insurance Company RegulationPROTECTING MISSOURI CONSUMERS DURING A CHALLENGING YEAR NEXT >>>
Annual Report Leadership: A three-tiered mission As the department that regulates insurance companies, the banking, lending and credit union industries and licensed professionals in Missouri, our fundamental mission is three-tiered: 1 Protect Missouri consumers. 2 Encourage a competitive marketplace. 3 Strengthen state-based regulation. DEPARTMENT LEADERSHIP TEAM Jim McAdams Travis Ford Melissa Palmer Matt Barton Angela Nelson Fred Heese Grady Martin Rich Weaver Ken Bonnot Jane Rackers Deputy director Communications Legislative Insurance Insurance Insurance Administration Finance Credit Unions Professional director coordinator Consumer Market Company director commissioner director Registration Affairs director Regulation Regulation director director director 2011 Serving and protecting “ doctor’s medical school and specialty, Our divisions have gone far beyond such as oncology or family practice. consumers affected by disasters The incredible devastation to lives and the call of duty in responding to the One area of emphasis was the property in the Joplin area has drawn Joplin tornado and other natural implementation of a new autism disasters during this challenging year. ” the attention of Missouri, the nation and law, which requires health insurance indeed the world. And while our everyday companies to cover the best-known demands of regulation must go on, the >>> Director John M. Huff treatment for autism, applied behavior recovery and rebuilding of Joplin has analysis therapy. Our implementation was dominated much of our work since the so successful and helpful to consumers EF-5 tornado struck on May 22. worst catastrophe Missouri has ever seen. namely in the form of new consumer that Autism Speaks, the nation’s largest We have worked with insurers, bankers, protection laws. advocacy group for autism, presented our There is much to talk about when it consumers, city and federal officials and comes to the leadership our teams have department with an award – the first countless other parties as we continue to The Missouri Board of Healing Arts, which provided for the Joplin area. That’s why of its kind – for exceptional efforts on assist in this recovery. licenses and disciplines doctors and we’ve devoted two pages to it in the behalf of individuals with autism. other health care providers, has stronger 2011 Annual Report. authority to crack down on doctors who In the pages that follow, you’ll see that Enhancements to consumer violate Missouri laws and regulations. while 2011 was a challenging year in many I can’t begin to tell you how proud I am of The new law signed by Gov. Jay Nixon the work done by the professionals in every protection laws ways, we successfully fulfilled our three- also allows the board to release more tiered mission of protecting consumers, division of DIFP They protect consumers . While no one saw the unprecedented information to the public about doctors. encouraging competitive markets and every day, but they have gone far beyond natural disasters coming, 2011 also Patients can now learn about their enhancing state-based regulation. the call of duty in response to the single brought some changes we did expect, >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration 2DIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report TopTen 10 Accomplishments 2011 of 3 Effective 4 Leading bank chooses implementation of to become Missouri’s autism insurance mandate largest state charter DIFP teams have spent much of 2011 The Division of Finance saw assets of implementing Missouri’s new autism state-chartered banks grow dramatically insurance law, signed by Gov. Nixon this spring when it approved Commerce in 2010. The department has helped Bank’s application to convert its providers and insurers work through national charter to a state charter. DIFP consumer services representatives billing and coding issues, created Commerce became the division’s advise consumers in Joplin just days after the substantial online educational materials largest regulated bank, with assets of tornado struck. for providers and parents, and licensed $18 billion. Assets of state-chartered 123 behavior analysts through the banks have jumped by 30 percent: from 1 Joplin tornado response Professional Registration Division. $71.5 billion to $93.1 billion. The Joplin tornado is the largest insurance Autism Speaks, the nation’s largest event in Missouri history, with $1.3 advocacy group for autism, awarded billion in claims paid by year’s end and an DIFP for exceptional efforts on behalf 2011 estimated insurance payout approaching of individuals with autism at its annual Nurse licensing fees will help fund expanded nurse education $2 billion. Missourians affected by the Autism Law Summit in October. And 5 Tougher regulations programs at Missouri colleges Joplin tornado have been a top priority for DIFP hosted 80 treatment providers, for doctors and universities. DIFP which has marshaled resources to , insurers and advocates at the 2011 serve consumers and deployed a full-time DIFP Autism Provider Summit, featuring The new law governing physicians, insurance regulator to Joplin. With DIFP’s the Governor as keynote speaker. signed by Gov. Nixon in 2011, has 6 Caring for Missourians help, tornado victims who filed complaints been implemented at a brisk pace: Recommendations by the State Board have received $4.5 million in extra After a series of newspaper articles, of Nursing resulted in Gov. Nixon’s claims payments from their insurance a legislative package came together December announcement of $1 million companies. quickly, the bill was passed and signed, in state grants to seven colleges and IT enhancements were made to the universities to enhance nurse education Board of Healing Arts website and rules 2 Record consumer recoveries programs. The initiative, part of the were quickly drafted and filed. Caring for Missourians program, was $21M Due in large part to natural disasters throughout created in 2011 legislation signed by the Governor and is funded by nurse Missouri, DIFP has returned a record licensing fees paid to the board. amount of money to consumers who filed complaints against their insurance companies. Recoveries stand at $21 DIFP Legislative Coordinator Melissa million, compared to 2009’s record Palmer, left, and Insurance Market amount of $14.6 million. Consumers Regulation Division Director Angela made 12,460 complaints, compared to Nelson, right, accept an award from 7,692 in 2010. Autism Speaks’ Lorri Unumb. >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration 3DIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report TopTen 10 Accomplishments 2011 of 8 New law modernizes 10 Innovative agreement credit union regulation protects 41,000 customers A new law, signed by Gov. Nixon in of rural insurer affected 2011, brought needed updates to the by tornado statutes enforced by the Division of Thanks to an agreement between Credit Unions. Passed unanimously by DIFP Missouri Farm Bureau and the , the Missouri Senate and House, the state Property and Casualty Guaranty law moves regulation of credit unions Association, 41,000 insurance more in line with Missouris banking policyholders in southwest Missouri regulations, including investigative power have been protected. They are and removal of officers and employees customers of the Barton County Mutual for wrongdoing. 9 DIFP unites consumers Group, an insurer that became insolvent CLAIM Program Director Carol Beahan, The legislation marked the first with missing after Joplin tornado claims. right, advises Rep. Joe Fallert on Medicare comprehensive update of credit unions life insurance policies questions. To the left is Tracey Wetzel, A Barton County judge approved a lead trainer for CLAIM. DIFP and CLAIM law in 40 years. The new regulations By leveraging new technology DIFP proposal in which Farm Bureau come at a time of growth for state- announced in October, DIFP now offers 2011 representatives, along with other agencies, lends the group $14 million and takes provided information to legislators and their chartered credit unions in Missouri, help to consumers trying to find missing over operations. The move saves the staff. which topped $10 billion in assets for life insurance policies for deceased Guaranty Association (and ultimately the first time in Missouri history. loved ones. DIFP will accept search taxpayers) the burden of covering forms from the public, then send the the group’s unpaid claims and saves 7 Medicare counseling policyholder information electronically to 41,000 consumers from having to program jumps licensed life insurers in Missouri for a find new coverage on their homes and in national ranks potential match. The first match united businesses. Missouri’s CLAIM Program, which a woman with life insurance benefits provides free counseling to Missourians from her father, who died in 2008. with Medicare, has achieved a significantly higher ranking from Medicare. Thanks to a renewed emphasis and better tracking of consumers assisted, CLAIM’s national ranking jumped nearly 20 positions in 2011. For the past several years, the ranking had been near the bottom nationally. >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration 4DIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Responding to disasters 2 4 Flooding 1 Tornadoes 3 DIFP divisions rally for victims The year 2011 was, at times, destructive, tragic and expensive. In addition to having a A DIFP team helps southeast Missouri flood victims with recovery questions. profound impact on Missouri consumers, the unprecedented disasters affected every division 2011 of DIFP through: , DIFP team advises flood victims in five locations zzHandling of consumer questions and complaints. Members of the Insurance Consumer Affairs 5 Division provided guidance and resources to zzRegulation of health care providers, who came consumers affected by flooding in southeast from all over to help those in need. Missouri in early May. zzEncouraging banks to give relief to mortgage holders with property damage. The community response events were zzMonitoring of insurance company performance organized by Gov. Nixon and held in Poplar and solvency. Bluff, Sikeston, Charleston, New Madrid and Caruthersville. PHOTOS 1 DIFP team member Sam Hicks reads messages 4 Four months after the tornado devastated Joplin, DIFP hosts left on the wall of a destroyed home in Joplin. a Recovery Roundup to help consumers still experiencing insurance issues. A team of DIFP regulators, several other 2 Charlotte Onstott and Dennis Fitzpatrick help a agencies and insurance companies gathered to help consumers. victim at the Recovery Roundup. 5 Three DIFP staff members help St. Louis-area consumers with 3 Julie Hesser assists consumers four days after questions about recovery from the April 22 tornado on Fox 2’s the Joplin tornado. phone bank. Gov. Jay Nixon speaks at a Consumer complaints lead Joplin St. Louis Sedalia community meeting in Sikeston. to additional claims payments $4.5 million $640,000 $250,000 >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration 5DIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Tornado recovery in Joplin Largest insurance event in Missouri history. $1.3 billion in claims paid as of Dec. 31, 2011. 2011 >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration 6DIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Joplin tornado timeline May 22: A deadly EF-5 tornado strikes at May 26: Director John Huff, with a June 1: DIFP announces 17,000 June 23: Credit Unions Division Director 5:41 p.m., killing 161 and destroying or Highway Patrol escort, visits insurers’ insurance claims have been filed. Ken Bonnot visits the three state- damaging 8,000 homes and buildings. mobile claims units. "For consumers chartered credit unions in Joplin to with property damage, the time to act is June: DIFP works with FEMA and assess damage. May 23: DIFP now," Huff says. city officials to establish standards launches Web consistent with homeowners policies to page with claim May 26: Gov. Nixon issues an executive allow for expedited debris removal. and complaint order that restricts the activities of public guidance for adjusters, prohibits cancellation or non- June 7: DIFP staffs the new state consumers, as renewal of policyholders in Jasper and Resource, Recovery & Rebuilding Center, well as toll-free Newton counties, and requires insurers to which is opened today by Gov. Nixon. phone numbers and mobile provide free copies of policy documents. claims unit addresses for insurers. July 20: A Joplin radio talk show May 24: The state Board of Pharmacy DIFP HOSTS RECOVERY ROUNDUP features Communications Director Travis releases guidelines to affected Ford, who encourages consumers to pharmacies on maintaining drug report their insurance coverage and inventory. Procedures are given for claim problems to DIFP . 2011 opening temporary pharmacies during a disaster. Aug. 22: DIFP offers a self-service kiosk May 25: Division of Finance for Joplin consumers Commissioner Rich Weaver sends a in the Resource, letter to Joplin-area banks encouraging Recovery & Rebuilding them to work with homeowners hard hit Center. by the tornado. The division and FDIC encouraged banks to extend repayment DIFP’s team of regulators help consumers with insurance issues. Sept. 13: DIFP announces insurance terms, restructure loans and ease terms Rob Reichart and Charlotte claim payments reach $1 billion. Sept. 24: A DIFP team hosts a daylong Onstott help consumers. for new loans. Nov. 28: DIFP issues bulletin to insurers Recovery Roundup at Missouri May 26: DIFP sets up shop at Missouri Southern State University to help Joplin saying Joplin homeowners need more Southern residents dealing with insurance and time to rebuild. Enforcing rebuilding State financial issues. Among the agencies deadlines of less than one year could University offering help 120 days after the be unreasonable and may subject the to help tornado: Missouri Division of Finance; Board of Architects, insurer to enforcement action. residents and Professional Engineers, Professional Land Surveyors and Dec. 31: Following complaints made businesses Landscape Architects; Missouri Department of Economic to DIFP $4.5 million in consumer , with Development; FEMA; Joplin Public Works Department; and recoveries has been returned to tornado insurance Consumer Credit Counseling. Insurance companies also The youngest visitors check victims. questions. Director John Huff, left, were on hand to help DIFP address consumer concerns. out a Joplin fire truck. advises a consumer with insurance questions.DIFP >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration 7 Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Insurance Consumer Affairs Division Helps consumers resolve complaints and inquiries. Investigates insurance agents, public adjusters and bail bond agents suspected of violations. Provides information on insurance policy questions. Provides insurance education and outreach activities to Missouri consumers. DIVISION STRUCTURE Consumer Services Investigations Section Section This section handles New state laws will protect This section mediates Insurance complaints against insurance consumers after disasters complaints filed by consumers Consumer agents and agencies, bail bond agents and public against insurance companies. Actions by the section can HOTLINE adjusters. Two new laws signed by Gov. Nixon in 2011 will further protect insurance result in insurers paying higher policyholders: claim amounts to policyholders, 800-726-7390 To discipline an agent, the reversing denials of coverage department in most cases Repair contractors working Insurance claims or other steps consistent with Consumers with questions must file a complaint with with homeowners handling state law or specific insurance can call the Insurance the Administrative Hearing SB 101: Contractors who SB 132: Missouri law policies. Consumer Hotline or visit Commission (part of the perform roof or other residential now forbids city and insurance.mo.gov Office of Administration), exterior work cannot offer county governments This section provides which determines whether from restricting consumer education about TDD line for hearing impaired: to pay a homeowner’s 2011 there is cause for discipline. insurance deductible to get insurance companies insurance products through 573-526-4536 When cause is found, the the job. They also cannot trying to provide the department’s website, by department can suspend claims services to providing on-site counseling negotiate an insurance claim How we can help or revoke licenses, put a on behalf of a homeowner. storm victims. In after major storms and by licensee on probation or 2011, some local participating in outreach events Take your complaint Many times, contractors call order continuing education. themselves “insurance claims ordinances prevented throughout the state. It also Verify an agents license insurers from setting provides counseling and other specialists,” which can confuse Get help understanding The section also investigates consumers on the roles of up mobile command resources to individuals and an insurance policy unlicensed activity and reviews centers in areas hit employers to assist them with insurance adjusters and repair agent license applications. contractors. by storms. shopping for health insurance. 2011 STATS 5 Consumer Services Investigations Section BY TYPE OF INSURANCE BY REASON Section Top five zzAgent Health 1,048 Claim denial 916 zzConsumer restitution investigations conducted: Auto: private passenger 845 Claim delay 647 recovered: $19.2 million 1,788 zzConsumers assisted by phone: 21,251 Consumer Homeowners 635 Unsatisfactory settlement 511 zzActions against zzFormal complaints and inquiries agents: 109 complaints Life and annuity 289 Billing 148 opened: 12,460 Auto: commercial 70 Adjuster handing 128 >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration 8DIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Insurance Consumer Affairs Division 2011 ACHIEVEMENTS Consumer Affairs Division recovers record amount for 2011 The division obtained record recoveries $19.2 From students to seniors of $19.2 million for consumers in DIFP educates consumers million 2011. The previous record was set in 2009, when recoveries hit $14.4 $14.4 $13.7 $13.8 $12.4 million 1 million. million million million More than one-fifth of this year’s total Record 2 has gone to consumers affected by recovery the Joplin tornado. Also increasing dramatically are consumer complaints, which were up 62 percent over 2010. 2007 2008 2009 2010 2011 New Life Policy Locator service helps consumers find policies of deceased loves ones The division in November created a DIFP Life Policy Locato Department of Insura nce, Life Policy Locator service to help 4 Financial Institutions 2011 Professional Regist & ration r Service CONFIDENTIAL PERS ONAL INFORMATION consumers locate benefits from life The Missouri Depa rtment of Insur ance or annuity contr acts can help consumers locate and identify insurance.mo.gov 3 of a deceased policy insurance policies or annuity contracts holder. individual life insur ance policies WHO CAN SUBMIT A REQUEST Individuals who believ purchased in Missouri. e they are beneficiarie An executor or legal s, or representative of a when a policy was deceased individual issued or annuity was who may have lived purchased. in Missouri HOW TO SUBMIT A REQUEST Complete all inform ation, sign it befor Individuals who believe they are with an original certifi e a notar y public and ed death certificate mail it in an envelope to: marked “Confidenti Life Policy Locator al” along Missouri DIFP beneficiaries, as well as executors and PO Box 690 Jefferson City, MO 65102 Phone: 800-726-73 573-751-2640 90 TDD: 573-526-4536 legal representatives of the deceased then contact the beneficiary if a policy UPON RECE IPT OF THE REQUEST form Forward the comp and death certificate, leted form and any the Department of licensed life insur ance attachments, along Insur ance will: companies. with the death certifi person, may submit a search request cate, to all Missouri- is located. By the end of 2011, of the Ask that the companies policies or individual search their records annuity contr acts in to deter mine wheth the name of the decea er they have any indivi dual life insurance form. Requests are forwarded to sed. 46 searches requested, the division Ask that they respo nd directly to the reque annuity contr acts namin stor only if they have g the deceased, and any individual life insur if the requestor is ance policies or authorized to receiv e this information. life insurance companies, which will recovered $24,591 for consumers. PLEASE PRINT, TYPE OR WRITE CLEARLY IN BLACK OR BLUE 1 INK REQUESTOR’S CONT ACT INFORMATION DATE OF REQUEST 1 Investigator Sheri Sloan talks to Jefferson City High School students about Consumer services rep named State Employee of the Month insurance. Students also viewed an electronic presentation on auto insurance. REQUESTOR’S FULL NAME LAST FIRST ADDRESS MIDDLE Communications intern Kenny Gerling hands out Medigap guides to seniors STREET The division’s Suzie Comstock worked here for six years. EMAIL CITY STATE ZIP CODE 2 attending AARP’s Summerfest. COUNTY ADDRESS DAY PHONE was named the January 2011 “Employees like Suzie are NEXT Division Director Angela Nelson, right, explains complaint information to State Employee of the Month. MO375- 0842 (8-2011 3 ) invaluable to our department legislative assistants at the Capitol. She and representatives of other She is a consumer services and Missouri consumers,” said state agencies talked with legislators and their staff about how they assist specialist II, handling consumer Director Huff. “Health insurance constituents with insurance questions and complaints. complaints regarding life and can be complicated and health insurance. Senior office support assistant Lori Eggen distributes information at the expensive, and consumers have 4 Missouri Institute on Minority Aging conference at the Lake of the Ozarks. She also was DIFP’s insurance employee more questions than ever before about of the fourth quarter for 2010. Suzie has their coverage.”DIFP >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Insurance Consumer Affairs Administration Professional Registration 9 Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Insurance Market Regulation Division Reviews insurance policies, rates, products and marketing strategies for compliance with Missouri law. Performs market conduct examinations to ensure fair treatment of policyholders and compliance with Missouri law, and monitors the marketplace. DIVISION STRUCTURE Market Conduct Section Statistics Section Unlike the Consumer Affairs Division, which This section creates databases, handles individual complaints, the Market Robust insurance market publishes reports on various insurance Conduct Section explores deep into the Premium volume for Missouri insurers markets in Missouri and monitors the operations of insurance companies suspected reached $30 billion for the first time in availability and affordability of insurance of violating Missouri laws. Violations found 2011. coverage in the state. Extensive data on during exams and investigations may result in insurance companies doing business fines and restitution to policyholders. Fines and The Missouri insurance market ranks in Missouri can be found on the penalties go to the Missouri State School Fund. 37th in the world, exceeding many department’s website. countries including Argentina and Norway. Market conduct consumer recoveries Two Missouri-based reinsurers, RGA DIFP annually prepares reports on: 2011 $1,769,580 Reinsurance Co. and Generali USA, Consumer Complaint Index 2010 $996,772 comprise nearly 42 percent of the Market Share national market share for life reinsurance. 2011 Homeowners Insurance Market conduct company fines Private Passenger Automobile 2011 $465,168 Medical Malpractice Life and Healthcare Section 2010 $909,641 Real Estate Malpractice This section pre-approves all life and Small Employer Health Insurance health insurance policy forms sold Availability Act, which protects small Legal Malpractice to Missouri consumers. This prior businesses. Product Liability Property and Casualty Section approval requirement extends to Life, Accident & Health Supplement Data This section reviews policies and rates for auto, group and individual health policies, Life & Healthcare/2011 annuities, prepaid dental plans, HMOs Mortgage Guaranty Insurance homeowners, title, workers’ compensation, Form & rate filings reviewed commercial property, credit, malpractice and others. Property & Casualty Supplement Letters of violations insurance and more. Medigap rates must be approved by the section. The section 4,230 If DIFP finds violations in filings, insurance companies are notified. In 2011, 1,754 filings enforces HIPAA, as well as the 1,747 were corrected through this process. Property & Casualty/2011 Companies offering coverage in Missouri at beginning of the year Form & rate filings reviewed 2010 2011 2010 2011 Filings corrected Homeowners 120 133 HMOs 20 21 5,402 Auto 220 210 Long-term care 103 102 Comprehensive health (excludes HMOs) 91 83 Medical malpractice 41 41 1,754 Life & annuities 434 427 Workers’ comp 290 303 10 >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional RegistrationDIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Insurance Market Regulation Division 2011 ACHIEVEMENTS Training provided for health care providers, insurers DIFP hosted the Autism Provider Summit in Jefferson Autism best practices when filing insurance claims. PROVIDER City, which was attended by over 80 health care providers, Summit Gov. Nixon, who signed insurers and parents of children the law in 2010, praised the efforts affected by autism. of DIFP providers and insurers for , working together during a smooth A DIFP team gave a primer on the first year of implementation. The law See our autism resources page: new law and its requirements for requires health insurance insurance.mo.gov/consumers/ insurance companies and updates companies to cover the best-known autismFAQ on licensing of behavior analysts. treatment for autistic children, Participants also heard from insurers applied behavioral analysis, up to Autism coverage stats and autism treatment providers on $40,000 per year. In 2011, the first year of the new autism law: zz1.3 million Missourians were covered by a health plan that offers 2011 coverage for autism therapies. zz3,805 Missourians received autism treatment that was covered by their health plans. Gov. Nixon speaks at the summit. About 80 zzClaims for autism-related participants learned about navigating the insurance treatments totaled $4.3 million, world, setting up infrastructure and billing systems, just .1 percent of health insurance and licensing their staff. company claims for the year. Workers’ compensation insurance in Missouri – more competitive than ever There were eight more companies zzThe number of companies offering coverage continues to grow, offering workers’ comp coverage at the giving Missouri employers more choice than ever before in insurance.mo.gov beginning of 2012 than a year ago. selecting an insurance plan. The insurance divisions zzMissouri businesses are paying less for coverage than in 1994. launched a new 2012 311 zzDIFP and industry analysts have predicted decreases in overall streamlined website that 2011 303 claims payments (loss costs) for six consecutive years. increases usability and zzThe frequency of on-the-job injuries has declined for 15 straight focuses on driving and 2010 290 years, with a total reduction of 50 percent during that time. retaining traffic. 11 >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional Registration >>>DIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Insurance Company Regulation Division Monitors and analyzes the financial condition of insurance Certifies and collects premium companies licensed in Missouri to ensure they can pay claims. taxes due to the state. DIVISION STRUCTURE Financial Exam Section Admissions Section Taxation Section revenue and state school funds. This section performs examinations of This section issues licenses, known as This section determines premium taxes, This section also regulates surplus lines insurance companies headquartered certificates of authority, to insurance which insurance companies pay in lieu insurers, including the placement of or incorporated in Missouri. These are companies doing business in Missouri. of income taxes. Insurers file tax returns policies and premium tax owed. Surplus known as domestic insurers. The section issues a license after with DIFP by March 1. After auditing the lines companies are not licensed financial and policy analysts review a returns, the department informs the insurers, but they provide coverage not Exam time company’s financial health, proposed state Department of Revenue the tax typically available in the commercial forms and history. due from each company. market. Examples include coverage of DIFP analyzes quarterly financial The section also enforces laws The Missouri premium tax rate is 2 shipping, entertainment events, antique statements from insurance governing 1,625 regulated entities. percent. These taxes go to general cars and terrorism. companies doing business These are not insurance companies, in Missouri. In addition, the but they provide some type of Tax collections (fiscal year) FY 2009 FY 2010 FY 2011 department conducts comprehensive insurance-related product. Examples financial examinations: Premium sales $209.9M $222.6M $216.4M are providers of service contracts 2011 zzThe division examines Missouri- Workers’ compensation 8.7M 12.5M 12.4M for motor vehicles and homes, based (domestic) insurers every discount medical plans and third-party Surplus lines 21.9M 23.0M 22.2M three to five years. administrators. Captive insurance companies 118,473 489,388 642,871 zzMissouri’s county and farm Tax credits (on premium tax only) 75.4M 74.6M 74.4M mutuals are examined at least every five years. zzOut-of-state (foreign) and international (alien) insurers are examined by regulators in their Captive Insurance Section John Rehagen, CFE, jurisdiction. A captive insurer provides in-house insurance coverage for directs Missouri’s its parent company. It is designed to complement existing Captive Insurance insurance coverage as part of the business’s overall risk Program. management strategy. Companies Financial Analysis Section interested in Captives also provide benefits to the state: Each captive creating captive operations in This section monitors the solvency pays premium tax for the business it writes, and captives can and legal compliance of all insurance Missouri may contact: create jobs for service providers they employ such as lawyers, companies doing business in Missouri. John.Rehagen@insurance.mo.gov accountants, consultants and actuaries. At year’s end, there were 1,900 573-522-2563 insurance companies licensed in Licensed Missouri captives handle life reinsurance, workers’ insurance.mo.gov/captive Missouri. compensation deductibles, group health and more. About 99 percent of captive premium volume is reinsurance. 12 >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional RegistrationDIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
Annual Report Insurance Company Regulation Division 2011 ACHIEVEMENTS he division’s primary focus for RECEIVERSHIP PROCESS T 2011, as with the past several years, was close monitoring of the solvency of Missouri domestic insurance companies. Insurers, like banks and credit unions examined by DIFP continue , When an insurer is in danger of insolvency, the division can go to court to ask that the company be placed in receivership. Two insurers were placed in receivership in 2011. Receivership to combat challenges resulting from the protects policyholders by placing a economy of the past four years. This year company under the full control of the was an especially challenging one for DIFP director. property and casualty insurers due to the large number of natural disasters, including This process is overseen by DIFP’s the Japan earthquake and tsunami. Receivership Section, which manages 19 insurance companies in Telepresence saves money, time rehabilitation or liquidation. Claims of The division is using technology to bring together experts and DIFP financial Innovative agreement prevents companies in receivership are covered examiners and analysts from the St. Louis, Kansas City and Jefferson City offices liquidation of insurer by the Missouri Insurance Guaranty to reduce travel expenses. The division used the state’s new “Telepresence” Thanks to an agreement between DIFP , Fund, which pays claims for insolvent videoconferencing system for a seminar put on by the National Association of Missouri Farm Bureau and the state insurers. Insurance Commissioners. “Telepresence is the next best thing to an in-person Insurance Guaranty Association, 41,000 2011 group meeting,” says division Director Fred Heese. insurance policyholders in southwest Missouri have been protected. They are customers of Insurance company changes the Barton County Mutual Group, an insurer ’09 ’10 2011 Captive insurance premiums again top $1 billion that became insolvent after Joplin tornado claims. New insurance The Captive Written Total Licenses companies admitted 41 25 29 Insurance Section MO premium captives issued Under a court-approved proposal submitted by New non-insurance 85 51 47 continues to grow. DIFP Farm Bureau lends the group $14 million , 2011 $1.7B 19 8 companies admitted In 2011, the CLOSE TO HOME and takes over operations. The move saves number of licenses 2010 $1.5B 11 6 Mergers 19 13 16 the Guaranty Association (and ultimately issued increased by eight to 19. 2009 $1.1B 6 3 taxpayers) the burden of covering the group’s Lines of authority added 14 13 10 Captives again topped the $1 unpaid claims and allows policyholders 2008 $123M 3 1 Company withdrawals 29 10 11 billion mark in premium volume and to keep their residential and commercial produced over $1 million in premium 2007 $30M 2 2 insurance coverage. tax in 2011. 2011 STATS Record sales Financial Analysis Section Financial Admissions Section Taxation Section zzInsurance premium sales: $30 billion zzTotal licensed insurance companies: 1,900 zzRegistered entities zzMissouri premium tax rate: 2% Domestic (Missouri) insurers: 209 (non-insurance zzPremium taxes paid to general revenue zzTotal capital and surplus: $948 billion companies regulated Foreign (out-of-state) insurers: 1,559 and state school funds: $229 million zzTotal admitted assets: $4.8 trillion Alien (non-U.S.) insurers: 132 by DIFP): 1,625 13 >>> >>> Leadership Responding to disasters Insurance Consumer Affairs Administration Professional RegistrationDIFP Top 10 accomplishments Joplin tornado recovery Insurance Market Regulation Finance National leadership Joplin tornado timeline Insurance Company Regulation Credit Unions
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