Friday, October 31, 2014

Governing Statute

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Title 36, Section 6411, Short Title

Sections 44 through 55 of this act shall constitute a part of the Oklahoma Insurance Code and shall be known and may be cited as the "Market Assistance Association Act".

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Title 36, Section 6412, Creation of Market Assistance Program

There is hereby created a Market Assistance Association to assist in the placement of homeowners' and liability insurance coverage for residents of this state.

The Market Assistance Association is not a carrier capable of assuming insurance risks. While it is believed that the Association will be able to solve or at least reduce problems of availability, it has no power to guarantee successful conclusion of all assistance efforts and it is assumed that some risks may not be entitled to coverage.

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Title 36, Section 6413, Definitions

As used in the Market Assistance Association Act:
 

1. "Association" means the Market Assistance Association established pursuant to this act;

2. "Board" means the Board of Directors of the Market Assistance Association;

3. "Commissioner" means the Insurance Commissioner;

4. "Insurer" means any entity licensed to issue homeowners' or liability insurance; and

5. "Member" means all property and casualty insurers licensed in the State of Oklahoma or writing homeowners' or liability insurance in the state required to be a participant in the Association as a condition of doing business in Oklahoma.

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Title 36, Section 6414, Powers of Association, Promulgation of Plan of Operation

A. The Association created pursuant to the Market Assistance Association Act shall have the power on behalf of its members to:

1. Require members to issue policies of insurance, including primary, excess, and incidental coverages, to applicants, subject to limitations specified in the plan of operation required by the Market Assistance Association Act; irregardless of the type of insurance coverage, the limits of liability for liability insurance, shall be governed by the amounts specified in subsection A of Section 154 of Title 51 of the Oklahoma Statutes; and

2. Call upon member insurers who have expertise or familiarity with a particular line of liability insurance to assist in underwriting such insurance.

B. The Board after consultation with the Association, the Insurance Commissioner and other affected entities, shall promulgate a plan of operation consistent with the provisions of this section, to become effective no later than ninety (90) days after the date of the inception of the Association.

1. The plan of operation shall provide for economic, fair and nondiscriminatory administration and for prompt and efficient provision of insurance, and shall contain other provisions including, but not limited to, the following:

a. preliminary assessment of all members for initial expenses necessary to commence operations of the Association,
b. establishment of necessary facilities,
c. management of the Association,
d. assessment of members, and assessment of policyholders if a market assistance association for professionals is declared, to defray losses and expenses,
e. establishment of committees as may be necessary to facilitate the administration of the Association,
f. procedures providing that an insured shall have proof that he has requested and been refused liability coverage from two insurers licensed to do business in this state, or that his premium has been increased by seventy-five percent (75%) or more from the previous year, before requesting insurance coverage from the Association,
g. appointment of members of the Association on a rotating basis to provide homeowners' and liability insurance coverage based upon direct premiums for homeowners' and liability insurance, written in the state in the preceding calendar year,
h. procedures for determining amounts of insurance to be provided by members of the Association,
i. procedures for two or more member insurers to share an insured risk if coverage for that risk is beyond the ability for one insurer,
j. procedures requiring member insurers to notify their insureds not less than forty-five (45) days prior to the renewal date for a policy, if the premium to be assessed will be increased to a rate greater than the rate assessed for the previous year. If such notification is not timely, then the premium shall be the same as the premium which was assessed for the coverage in the previous year.

2. The plan of operation shall provide that any balance remaining in the funds of the Association at the close of its fiscal year shall be added to the reserves of the Association and may be used for expenses of the Association or any successor association.

3. Amendments to the plan of operation may be made by the board, subject to the approval of the Commissioner.

C. All insurers who are members of the Association shall participate in the Association's writings, expenses, and losses in the proportion that the net direct premiums of each such member written during the preceding calendar year bears to the aggregate net direct premiums written in this state by all members of the Association. Each insurer's proportion of participation in the Association shall be determined annually on the basis of such net direct premiums written during the preceding calendar year, as reported in the annual statements and other reports filed by the insurer that may be required by the board of directors. No member shall be obligated in any one (1) year to write liability insurance business from the Association which would result in the member insurer writing more than ten percent (10%) of its total annual liability insurance, from all lines of liability insurance, from the Association. Likewise, no member shall be obligated in any one (1) year to write homeowners' insurance business from the Association which would result in the member insurer writing more than ten percent (10%) of its total annual homeowners' insurance, from the Association.

D. An insurer ceasing to be licensed or authorized to transact insurance business pursuant to the Insurance Code shall automatically cease to be a member of the Association effective at 12:01 a.m. on the day following the termination or expiration of its certificate of authority and shall no longer be subject to the plan of operation or requirements of the Association; provided, however, such insurer shall remain liable for any annual assessments of the Association based on expenses incurred by the Association while such license or authority was in effect.
 

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Title 36, Section 6415, Management and Administration of Association - Meetings

A. The business and functions of the Association shall be managed and administered by a board of eleven (11) directors composed of two directors selected by the American Insurance Association, who are representatives of Association members; two directors selected by the Alliance of American Insurers, who are representatives of Association members; two directors selected by the National Association of Independent Insurers, who are representatives of Association members; two directors appointed by the Commissioner, who are representatives of Oklahoma domestic insurers who are Association members; one director who shall be the President of the Oklahoma Surplus Lines Association; and two directors appointed by the Commissioner, who are representatives of nonaffiliated foreign or alien insurers who are Association members. Each director shall designate a full-time salaried employee of the insurer to represent the director as an alternate in the absence of the director on the Board. Each director shall serve for a term of two (2) years or until the Association is terminated, whichever comes first. The appointment to the board of directors shall be subject to approval by the Commissioner. Any vacancy on the Board shall be filled for the remaining period of the term by appointment by the appointing authority which originally filled the vacant post, subject to the approval of the Commissioner. If no directors are selected and appointed within sixty (60) days after the effective date of the inception of the Association, the Commissioner shall appoint the initial directors of the Board.

B. The chairman shall call all meetings of the Board and shall give reasonable notice of meetings to all directors. At any meeting of the Board, each Board director or his predesignated alternate shall have one vote. Six members of the Board or their predesignated alternates shall constitute a quorum for the transaction of business and the acts of a majority of the Board members present at a meeting at which a quorum is present shall be the acts of the Board. The Board shall meet as often as may be required to perform the general duties of administration of the Association, but not less frequently than annually.

C. In approving selections to the Board, the Commissioner shall consider, among other things, whether all Association member insurers are fairly represented.

D. Members of the Board and their predesignated alternates shall serve without compensation but may be reimbursed from the assets of the Association for all actual and necessary expenses incurred by them in performance of their duties for the Board.

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Title 36, Section 6416, Liability of Insurance Commissioner

There shall be no liability on the part of, and no cause of action of any nature shall arise against the Insurance Commissioner or his staff, the Association, its agents or employees, an insurer, any licensed agent, or the board of directors or its authorized representatives for any statements made in good faith by them in any reports or communications, concerning risks insured or to be insured by the Association, or at any administrative hearings conducted in connection therewith.

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Title 36, Section 6417, Statement Prepared by Independent Certified Public Accountant - Contents - Books to be Open and Free for Examination - Inspection - Detailed Reports of Liability

A. The Association shall file with the Insurance Commissioner, annually, from the date of its inception, a statement prepared by an independent certified public accountant which shall contain information with respect to its transactions, condition, operations, and affairs during the preceding calendar year. The statement shall contain such matters and information as are prescribed and shall be in such form as is approved by the Commissioner. The Commissioner may, at any time, require the association to furnish additional information with respect to its transactions, condition, operations, and affairs, or any matter connected therewith considered to be material and of assistance in evaluating the scope, operation and experience of the Association.

B. The books of account, records, reports and other documents of the Association shall be open and free for examination to the Commissioner at all reasonable times.

C. The books of account, records, reports and other documents of the Association shall be open to inspection by the members at such times and under such conditions and regulations as the Board shall determine.

D. The Association shall provide for the making of detailed reports of liability approved or canceled, for the drawing up of annual budgets of the Association and for the rendering of accounts to each member at least every twelve (12) months.

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Title 36, Section 6418, Use of Filed and Approved Rate for Liability and Homeowners' Insurance

Each member insurer shall use the filed and approved rate for the liability and homeowners' insurance being written or those rates effective by Section 924 of this Code. Any variance from such rate, including a variance based upon debit, shall be approved prior to use, by the State Board for Property and Casualty Rates.

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Title 36, Section 6419, Authority to Adopt Rules and Regulations

The Commissioner may adopt any rules and regulations necessary for the implementation, administration or furtherance of the provisions of the Market Assistance Association Act.

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Title 36, Section 6420, Authority to Create and Operate Voluntary Market Assistance Association

Property and casualty insurance companies licensed to transact insurance in the State of Oklahoma are hereby authorized to create and operate a Voluntary Market Assistance Association under the auspices of the Commissioner of Insurance. In the event such Voluntary Association is established and is approved by the Commissioner of Insurance prior to September 11, 1986, then Sections 6411 through 6415, 6417, 6418 and 6421 of the Insurance Code shall not become effective.

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Title 36, Section 6421, Written Order to Dissolve of Association

If at any time after the provisions of this act are implemented, either by voluntary plan or as otherwise provided for herein, the State Insurance Commissioner would determine by written order that there was no further need for such Association, then the same would be dissolved. Provided however, that if such Association were dissolved, and then the State Insurance Commissioner determined at a later time there existed a need for such Association, the Commissioner of Insurance would then proceed according to the provisions of Section 53 of this act, and that section would again be applicable at that time.

If the Commissioner makes such a determination to reimplement the Association, he will give the companies involved ninety (90) days to comply, and if they fail to do so, then Sections 47 through 55 of this act would be applicable.

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Title 36, Section 6422, Requirement to Participate in Assessments and Writings of Association

Members of the Market Assistance Association, whether a voluntary or statutory program, shall be required to participate in all assessments and writings of the Association. Failure to participate shall, after notice and opportunity for hearing before the Insurance Commissioner, result in a censure, suspension or revocation of certificate of authority or a civil penalty up to Five Thousand Dollars ($5,000.00) for each occurrence or by both such penalty and censure, suspension or revocation of certificate of authority.

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Copyright 2014 by Oklahoma Market Assistance Program