Missouri Department of Insurance Enters into $1.25 Million Settlement with Nine Affiliated Insurers

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Missouri insurance regulators recently announced a $1.25 million settlement with nine affiliated insurance companies as a result of a market conduct examination into their handling of workers’ compensation insurance.  Specifically, the Missouri Department of Insurance alleged in the settlement that the companies failed to make individual risk filings with the Department for 2,158 large deductible workers’ compensation insurance policies with Missouri premium or exposure.  The settlement also alleges that the companies failed to use mandatory forms, used withdrawn forms, erred in calculating the administrative surcharge rate—and in collecting the administrative surcharge, incorrectly calculated the employer’s liability increased limits, incorrectly calculated the schedule rating modification and failed to provide timely responses to some information requests.

Under the settlement agreement, the companies agreed to take remedial action bringing them into compliance with statutes and regulations in Missouri and to pay the $1.25 million settlement amount to the Missouri State School Fund.

Polsinelli’s Summer 2012 Insurance Business & Regulatory Newsletter and February 2014 e-Alert discussed an increase in market conduct examination activity by the Missouri Department of Insurance, in addition to noting that recent monetary penalties assessed by the Department were on the rise.

According to the Missouri Department of Insurance’s website, since the beginning of 2009, Market Conduct enforcement actions have generated more than $36 million in payments from insurance companies.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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