Office of Insurance Regulation
In addition to duties and powers listed above, the OIR is responsible for approving policy rates and forms, market conduct examinations (audits), overseeing agencies and investigating violations. Let's look at each of these in some detail.
Policy approval authority, rates and forms
- All policy documents given by an insurer to a consumer must be approved by the OIR.
- All forms must be filed at least 30 days in advance of delivery to a consumer.
- If the filed form has not been approved or disapproved by the OIR within 30 days, then at the end of 30 days it is considered approved.
- Health insurance ratings are also closely monitored. So an insurer must file copies of all rating forms with the OIR, including manuals and schedules and any changes in either of those. This is so important, that without doing this the insurer will not be allowed to issue or renew any health policies unless this has been done.
The office may, for cause, withdraw a previous approval.
Market conduct examinations
In order to offer insurance products here in Florida, insurance companies must first get a certificate of authority from the OIR regardless of where the company is domiciled. The certificate of authority gives them permission to do insurance business here in the state; you will see the phrase "certificate of authority" used often in this chapter.
The OIR may examine (or audit) each insurer as often as it deems necessary, but it must examine each domestic insurer at least once every 5 years. If a domestic company has had a certificate of authority in Florida less than three years then the OIR will conduct an examination at least once each year.
Foreign insures that are domiciled in other states obviously will not be examined directly by the Florida OIR, but the OIR still requires a report of that company's most recent certified examination by its home state if they are to do business here in Florida. Examination of alien companies only covers business done in the U.S. and not in another country.
The examination may include examination of the affairs, transactions, accounts, and records relating directly or indirectly to the insurer and of the assets of the insurer's managing general agents and controlling or controlled person. To facilitate uniformity in examinations, the commission may use the methods in the Market Conduct Examination Handbook and the Financial Condition Examiners Handbook of the NAIC.
Agency Actions
The OIR has several major responsibilities, including:
- licensing of insurance companies
- establishing initial financial requirements of insurance companies
- policing against unauthorized insurance activities
- ongoing regulation of insurance company activities, including policy forms and provisions and rates (although direct rate regulation is not applicable to life insurance)**
- assisting in the rehabilitating or liquidating insolvent insurers (although it is the Department of Financial Services that will be appointed as the liquidator or rehabilitator)****
Investigation
During a market conduct examination the Department or the OIR may sometimes find that a person or insurer has violated provisions of the insurance code and may then conduct an investigation. You could say that market conduct exams are standard, and investigations are more serious and generally someone has broken a rule. The Department and the OIR may, of course, investigate all different lines of agents and representatives and may investigate all manner of records, documents and transactions that are applicable.
Investigations may also be conducted on anyone who has the exclusive or dominant right to manage or control an insurer, as well as anyone engaged in the formation of a domestic insurer.
During an examination or investigation the Department may basically act as an attorney by doing the following:
- administer oaths,
- examine witnesses,
- receive evidence,
- subpoena witnesses,
- compel their attendance and testimony, and
- require by subpoena the production of books, papers, records, files, correspondence, documents, or other evidence that is relevant to the inquiry.
Anyone who willfully obstructs the investigation is guilty of a misdemeanor.