SB 153 Establishes a consistent set of administrative, civil and criminal enforcement tools for all of Missouri's insurance laws and regulations of bail bond agents
Sponsor: Engler
LR Number: 0355S.04C Fiscal Note: 0355-04
Committee: Small Business, Insurance & Industrial Relations
Last Action: 5/18/2007 - S Informal Calendar S Bills for Perfection Journal Page:
Title: SCS SB 153 Calendar Position:
Effective Date: August 28, 2007

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Current Bill Summary

SCS/SB 153 - This act provides a consistent set of administrative, civil and criminal enforcement tools for all of Missouri’s insurance laws. For each violation in Chapters 354, 374, 375, 376, 377, 378, 379, 380, 381, 382, 383, 384, and 385, RSMo, this act authorizes cease and desist orders, curative orders, injunctions, consumer relief, recovery of investigative costs for violations, and a range of civil penalties commensurate with the seriousness of the offense, scienter of the offender, and losses suffered by consumers. For example, the act revises the administrative and enforcement powers of the department with respect to health service corporations and HMOs by making violations of key provisions subject to the administrative orders and civil actions provisions of Sections 374.046 and 374.048. The act revises other provisions in the insurance chapters to synchronize the administrative powers of the department.

The act removes the director's authority to suspend a prepaid dental corporation's certificate of authority if it issues a contract without filing and receiving prior approval from the director (Section 354.722).

ADMINISTRATIVE HEARINGS - The act provides applicants who are refused licenses with the opportunity to file petitions with the administrative hearing commission. The administrative hearing commission is required to conduct hearings, but the director retains his or her discretion in refusing to issue licenses. The act also requires the director to refer certain matters involving revocation or suspension of a license to the administrative hearing commission. The act requires the director to hold administrative hearings for persons aggrieved by orders of the director for violations of Missouri's insurance laws. Final orders issued by the director are subject to judicial review.

COOPERATION WITH OTHER AGENCIES AND BODIES - The act authorizes the director to cooperate with other administrative agencies and national associations (e.g. NAIC) to effectuate greater uniformity in insurance and financial services regulation among state and federal governments, and self-regulatory organizations. The act further provides that the director may share records with such entities subject to privacy and disclosure laws.

FALSE TESTIMONY - The act modifies the law on the issue of testifying falsely in insurance investigations. No person shall knowingly make a false statement under oath or affirmation in any record submitted to the director. Under the act, knowingly making false statements or making false entries upon documents is a Class D felony (current law provides a $1,000 fine and five years in prison).

PRODUCTION OF RECORDS - The act provides that the director may seek an order to enforce compliance if a person refuses to testify, file statements or produce records. Persons are not excused from testifying or producing records based on the grounds that the testimony or records may tend to incriminate them. In such a case, the director may seek a court order to compel the testimony or production of records and the testimony or records may not be used as evidence in a criminal case.

REGULATION OF BAIL BOND AGENTS - Under the act, the director is required to notify general bail bond agents when a bond has been forfeited. The notice to the general bail bond agent shall be by fax or e-mail within 48 hours of the forfeiture be listed with the department (Section 374.707). The act requires the department to include a photograph of the bail bond agent or general bail bond agent on the license (Section 374.710). The act also requires licensees to provide the names, addresses, and telephone numbers for all employers for which they work or operate as an independent contractor. It is unlawful to write bonds under a new appointment without providing this information. Under the act, for any new appointment of a bail bond agent, the bail bond agent shall file an affidavit stating that to their knowledge, there are no outstanding premiums owed at the time of their new appointment. If outstanding premiums are owed and the bail bond agent does not satisfy the premium obligations, the former general bail bond agent may file notice, along with supporting documents with the department, stating under oath the fact that the bail bond agent has failed to satisfy their obligations. Upon receipt of the notification, the appointing general bail bond agent may immediately cancel the newly appointed bail bond authority of the agent. Such authority shall remain cancelled until all premiums are paid.

Under the act, applications for bail bond agents shall be accompanies by fingerprints and a criminal history record information check processed by the Highway Patrol (Section 374.715). The act also requires applicants to demonstrate that they possess $20,000 in liquid assets (up from $10,000) along with a duly executed assignment of $20,000 (up from $10,000) to the state of Missouri.

The act modifies Section 374.715 by increasing the amount of funds on additional assignments of assets that the director may require of a bail bond agent. The threshold is increased from $25,000 to $40,000.

A duly licensed bail bond agent in good standing with the department shall be qualified to write bail on behalf of an general bail bond agent in every municipal or circuit court in this state in which the general bail bond agent who employs the agent or directs the agent as an independent contractor is duly licensed and qualified to write bail as provided by supreme court rule.

Under the act, it is unlawful for a bail bond agent writing on behalf of an individual general bail bond agent to fail to clearly disclose to the court, to the defendant and in the bond, the actual legal name of the individual general bail bond agent on behalf of whom the agent is acting.

Any licensed general bail bond agent or bail bond agent who is arrested for a felony shall notify the director within 10 days of his or her arrest.

Under the act, a person is guilty of a Class D felony for an unlicensed bail bond agent to hold himself or herself out to be licensed, render surety recovery services, or engage in fugitive recovery (Section 374.789).

INSURANCE PRODUCERS - The act requires insurance producers to complete 24 hours of continuing instruction (up from 10 hours)(section 375.020).

Under the act, the director may adopt rules and regulations codifying professional standards of producer competency and trustworthiness in the handling of applications, premium funds, conflicts of interest, record-keeping, supervision of others, and customer suitability (Section 375.143).

The act provides that a violation of a provision of Chapter 375, if not specifically provided for, shall be a Class B misdemeanor (Section 375.780).

The act also modifies Section 384.054 by providing that the penalty on surplus line insurers who are delinquent in paying taxes. The act provides that the penalty shall be one percent of the tax per diem up to ten percent of the tax.