Rhode Island § 27-71-3 - Market Conduct Surveillance Act

§ 27-71-3. Definitions.

As used in this chapter:

(1) “Commissioner” means the “director of the department of business regulation” or his or her designee.

(2) “Complaint” means a written or documented oral communication to the commissioner primarily expressing a grievance, meaning an expression of dissatisfaction. For healthcare companies, a grievance is a written complaint submitted by or on behalf of a covered person.

(3) “Comprehensive market conduct examination” means a review of one or more lines of business of an insurer domiciled in this state that is not conducted for cause. The term includes a review of rating, tier classification, underwriting, policyholder service, claims, marketing and sales, producer licensing, complaint handling practices, or compliance procedures and policies.

(4) “Market analysis” means a process whereby market conduct surveillance personnel collect and analyze information from filed schedules, surveys, required reports, and other sources in order to develop a baseline and to identify patterns or practices of insurers licensed to do business in this state that deviate significantly from the norm or that may pose a potential risk to the insurance consumer.

(5) “Market conduct action” means any of the full range of activities that the commissioner may initiate to assess the market and practices of individual insurers, beginning with market analysis and extending to targeted examinations. The commissioner’s activities to resolve an individual consumer complaint or other reports of a specific instance of misconduct are not market conduct actions for purposes of this chapter.

(6) “Market conduct examination” means the examination of the insurance operations of an insurer licensed to do business in this state in order to evaluate compliance with the applicable laws and regulations of this state. A market conduct examination may be either a comprehensive examination or a targeted examination. A market conduct examination is separate and distinct from a financial examination of an insurer performed pursuant to the Rhode Island general laws, but may be conducted at the same time.

(7) “Market conduct surveillance personnel” means those individuals employed or contracted by the commissioner to collect, analyze, review, or act on information on the insurance marketplace that identifies patterns or practices of insurers.

(8) “National Association of Insurance Commissioners” (NAIC) means the organization of insurance regulators from the fifty (50) states, the District of Columbia, and the four U.S. territories.

(9) “NAIC market conduct uniform examination procedures” means the set of guidelines developed and adopted by the NAIC designed to be used by market conduct surveillance personnel in conducting an examination.

(10) “NAIC market regulation handbook” means a handbook, developed and adopted by the NAIC, or successor product, which:

(i) Outlines elements and objectives of market analysis and the process by which states can establish and implement market analysis programs; and

(ii) Sets up guidelines that document established practices to be used by market conduct surveillance personnel in developing and executing an examination.

(11) “NAIC standard data request” means the set of field names and descriptions developed and adopted by the NAIC for use by market conduct surveillance personnel in an examination.

(12) “Qualified contract examiner” means a person under contract to the commissioner, who is qualified by education, experience, and, where applicable, professional designations, to perform market conduct actions.

(13) “Targeted examination” means a focused exam conducted for cause, based on the results of market analysis indicating the need to review either a specific line of business or specific business practices, including but not limited to, underwriting and rating, marketing and sales, complaint handling operations/management, advertising materials, licensing, policyholder services, nonforfeitures, claims handling, or policy forms and filings. A targeted examination may be conducted by desk examination or by an on-site examination:

(i) “Desk examination” means a targeted examination that is conducted by an examiner at a location other than the insurer’s premises. A desk examination is usually performed at the department of business regulation’s offices with the insurer providing requested documents by hard copy, microfiche, discs, or other electronic media, for review; and

(ii) “On-site examination” means a targeted examination conducted at the insurer’s home office or the location where the records under review are stored.

(14) “Third-party model or product” means a model or product provided by an entity separate from and not under direct or indirect corporate control of the insurer using the model or product.