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Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS

Chapter 374

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  374.046.  Relief issued by director for violations of state laws — considerations — notice — effective date of order — contents of order, procedures — penalty — costs — powers of director — service — order filed — noncompliance — modification of order — additional penalties — definitions. — 1.  If the director determines based upon substantial and competent evidence that a person has engaged, is engaging in or has taken a substantial step toward engaging in an act, practice, omission, or course of business constituting a violation of the laws of this state relating to insurance in this chapter, chapter 354, and chapters 375 to 385, or a rule adopted or order issued pursuant thereto or that a person has materially aided or is materially aiding an act, practice, omission, or course of business constituting a violation of the laws of this state relating to insurance in this chapter, chapter 354, and chapters 375 to 385, or a rule adopted or order issued pursuant thereto, the director may order the following relief:

  (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 as provided in section 374.049; and

  (4)  Award reasonable costs of the investigation.

  2.  In determining any relief sought, the director shall consider, among other factors, whether:

  (1)  The violations are likely to continue or reoccur;

  (2)  Actual financial loss was sustained by consumers and restitution has been made;

  (3)  The act, practice, omission, or course of business was detected as part of a self-audit or internal compliance program and immediately reported to the director; and

  (4)  The act, practice, omission, or course of business had previously been detected, but inadequate policies and procedures were implemented to prevent reoccurrence.

  3.  Unless the director determines that a summary order is appropriate under subsection 4 of this section, the director shall provide notice of the intent to initiate administrative enforcement by serving a statement of the reasons for the action upon any person subject to the proceedings.  A statement of reasons, together with an order to show cause why a cease and desist order and other relief should not be issued, shall be served either personally or by certified mail on any person named therein.  The director shall schedule a time and place at least ten days thereafter for hearing, and after notice of and opportunity for hearing to each person subject to the order, the director may issue a final order under subsection 6 of this section.

  4.  If the director determines that sections 375.014, 375.144, or 375.310 are being violated and consumers are being aggrieved by the violations, the order issued under subdivision (1) of subsection 1 of this section may be summary and be effective on the date of issuance.  Upon issuance of the order, the director shall promptly serve each person subject to the order with a copy of the order and a notice that the order has been entered.

  5.  A summary order issued under subsection 4 of this section must include a statement of the reasons for the order, notice within five days after receipt of a request in a record from the person that the matter will be scheduled for a hearing, and a statement whether the department is seeking a civil penalty or costs of the investigation.  If a person subject to the order does not request a hearing and none is ordered by the director within thirty days after the date of service of the order, the order becomes final as to that person by operation of law.  If a hearing is requested or ordered, the director, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination.

  6.  If a hearing is requested or ordered pursuant to subsection 3 or subsection 5 of this section, a hearing before the director or a hearing officer designated by the director must be provided.  A final order may not be issued unless the director makes findings of fact and conclusions of law in a record in accordance with the provisions of chapter 536 and procedural rules promulgated by the director.  The final order may make final, vacate, or modify the order issued under subsection 5 of this section.

  7.  In a final order under subsection 6 of this section, the director may impose a civil penalty or forfeiture as provided in section 374.049.  No civil penalty or forfeiture may be imposed against a person unless the person has engaged in the act, practice, omission, or course of business constituting the violation.

  8.  In a final order under subsection 6 of this section, the director may charge the actual cost of an investigation or proceeding for a violation of the insurance laws of this state or a rule adopted or order issued pursuant thereto.  These funds shall be paid to the director to the credit of the insurance dedicated fund.

  9.  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 and procedural rules promulgated by the director.

  10.  Statements of charges, notices, orders, and other processes of the director may be served by anyone duly authorized by the director either in the manner provided by law for service of process in civil actions, or by registering or certifying and mailing a copy thereof to the person affected by such statement, notice, order, or other process at his or its residence or principal office or place of business.  The verified return by the person so serving such statement, notice, order, or other process setting forth the manner of such service shall be proof of the same, and the return postcard receipt for such statement, notice, order, or other process, registered and mailed as aforesaid, shall be proof of the service of the same.

  11.  If a petition for judicial review of a final order is not filed in accordance with section 374.055, the director may file a certified copy of the final order with the clerk of a court of competent jurisdiction.  The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court.

  12.  If a person violates or does not comply with an order under this section, the director may under section 374.048 petition a court of competent jurisdiction to enforce the order.  The court may not require the director to post a bond in an action or proceeding under this section.  If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may, in addition to relief authorized in section 374.048, adjudge the person in civil contempt of the order.  A violation of or failure to comply with an order under this section is a level three violation under section 374.049.  The court may impose a further civil penalty against the person for contempt in an amount not less than five thousand dollars but not greater than one hundred thousand dollars for each violation and may grant any other relief the court determines is just and proper in the circumstances.

  13.  Until the expiration of the time allowed under section 374.055 for filing a petition for judicial review, if no such petition has been duly filed within such time or if a petition for review has been filed within such time, then until the transcript of the record in the proceeding has been filed in the circuit court of Cole County, the director may at any time, upon such notice and in such manner as he shall deem proper, modify or set aside in whole or in part any order issued by him under this section.

  14.  The enforcement authority of the director under this section is cumulative to any other statutory authority of the director.

  15.  The director is authorized to issue administrative consent orders in the public interest as complete or partial settlement of any investigation, examination, or other proceeding, which curative orders may contain any provision necessary or appropriate to assure compliance with the insurance laws of this state, require payment of restitution to be distributed directly or by the director to any aggrieved consumers, civil penalties, or voluntary forfeiture, reimbursement for costs of investigation or examination, or any other relief deemed by the director to be necessary and appropriate.  Any remaining matters not addressed in settlement may be submitted to the director through a contested proceeding under this section.

  16.  (1)  Any person willfully violating any provision of any cease and desist order of the director after it becomes final, while the same is in force, upon conviction thereof shall be punished by a fine of not more than one hundred thousand dollars, by imprisonment of up to ten years, or by both such fine and imprisonment.

  (2)  In addition to any other penalty provided, violation of any cease and desist order shall subject the violator to suspension or revocation of any certificate of authority or license as may be applicable under the laws of this state relating to the business of insurance.

  17.  The term "person" as used in this chapter shall include any individual, partnership, corporation, association or trust, or any other legal entity.

  18.  The term "order" as used in this chapter shall include a formal administrative direction or command of the director issued under this section or in any contested case subject to the provisions of section 536.063 or any lawful administrative proceeding subject to judicial review, but shall not include department bulletins, no-action letters, advisory opinions, or any other statement of general applicability that should be adopted by rule.

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(L. 1967 p. 516, A.L. 2006 H.B. 1837)

(1984) Nothing in this section prevents the Governor from directing the division of insurance to issue a cease and desist order. American Family Life Assurance Co. v. Teasdale (8th Cir.) 733 F.2d 559.


---- end of effective   28 Aug 2006 ----

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