Ohio Department of Insurance Director Lee Covington has signed a cooperative agreement that will increase the efficiency and effectiveness of market conduct examinations of insurance companies doing business in Ohio. Market conduct exams determine the extent to which insurers comply with state law regarding the marketing of insurance in the state.
Ohio has joined Nebraska, Kansas, Iowa, South Dakota and North Dakota in signing the “Cooperation Agreement for Comprehensive Market Conduct Examinations,” which is intended to increase the effectiveness of state market conduct programs and reduce redundancy in staff and resources through enhanced cooperation between the participating states.
By signing the Cooperation Agreement, Ohio agrees to perform comprehensive market conduct examinations for insurers headquartered in Ohio and defers to the cooperating states regarding examinations of insurers in their respective states.
Each time Ohio conducts an exam of a domestic insurer, they will invite other participants in the Cooperation Agreement to take part in the exam and/or share the data collected during the exam with those participating states. When other states conduct an exam, Ohio will be invited to participate in the same way.
Governor Bob Taft signed the Information Sharing Act (SB 138 – Sen. Nein) in March, a new law that enables the Department of Insurance to exchange information with other state, federal, and international regulatory agencies. The legislation, which becomes effective on June 18, allows Covington and the Department to enter into information sharing agreements such as the “Cooperation Agreement for Comprehensive Market Conduct Examinations.”
Ohio recently spearheaded another interstate cooperative project that capitalizes on the value of the information sharing abilities of state regulators.
The Ohio, Oregon, Illinois and Nebraska insurance departments combined efforts, staff and resources on a recent examination of one large insurer. The four states first identified priority issues and established protocols for multi-state examinations, assigning each examiner specific functional areas or test standards. The examiners reviewed files on behalf of all four states, departing from a traditional examination where each examiner reviews files applicable only to their state.
As a result of these protocols, the examiners were able to complete their onsite work in just three weeks.
Topics Legislation Ohio
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