Senate bill protects insurance consumers

SB 895, sponsored by Sen. Kevin Engler, R-Farmington, will provide the Missouri Department of Insurance with more tools for effective oversight of the insurance industry in Missouri.

According to an MDI news release, that’s especially important, as the oldest members of the baby boomer generation turn 60 this year and are facing pre-retirement decisions. Every day, 10,000 baby boomers turn 50, and in the next 10 years 43 percent of the work force will be eligible to join millions of other retired Americans.

With increasingly complex retirement products being introduced to the market, consumers facing complex retirement decisions need effective protection from state government.

“Our department works diligently every day to protect Missouri consumers from unfair and incompetent insurance practices,” Dale Finke, Department of Insurance director, said in the release. “If this bill passes, we will receive the authority we need to effectively protect consumers and efficiently regulate the insurance industry.”

Specifically, SB 895 would enable the Department of Insurance to:

• implement disclosure and suitability rules that guide financial professionals and protect consumers in the sale of annuities and life insurance products;

• implement a prompt, responsive enforcement policy that responds quickly to stop unlawful conduct in the sale of all insurance products, reducing the harm to consumers;

• obtain court orders requiring wrongdoers to surrender profits from illegal activity and pay restitution to consumers, including fraudulent conduct in the sale of annuities;

• order wrongdoers to cover the cost of being investigated and prosecuted;

• take action against other individuals who “materially aid” in violations; and

• ask a court to order wrongdoers to pay money for consumer education programs.

Civil penalties

Additionally, the bill would allow MDI to obtain meaningful civil penalties for fraudulent sales practices in the selling of annuities and life insurance products from the current level of $100 to a fine of up to $20,000 per violation, with a maximum penalty of up to $1 million for multiple violations if the fraud causes a financial loss to the consumer, penalties of up to $1 million per violation are assessed with no limit for multiple violations.

The Missouri Department of Insurance is charged with consumer protection in the regulation of the insurance industry in Missouri. This includes examinations into the financial condition of insurance companies so that they are able to cover claims, market regulation examinations into the conduct of the insurance companies in their dealings with customers, licensing of qualified insurance producers, assisting consumers with insurance-related complaints, and investigating insurance fraud.