Or. Admin. R. 410-141-5250 - EXAMINATIONS: Authority Examinations of CCOs

Current through Register Vol. 60, No. 12, December 1, 2021

(1) The Authority may examine every CCO, including an audit of the financial affairs of a CCO, as often as the Authority determines an examination to be necessary or otherwise appropriate under the circumstances. Without limiting the Authority's right to examine a CCO at such times and with such frequency as the Authority determines to be necessary or otherwise appropriate under the circumstances, a CCO will be examined at least once during the CCO's contract period. An examination will be conducted for such purposes and such scope as the Authority determines to be necessary or otherwise appropriate under the circumstances, including, without limitation, an investigation and examination of the financial condition of the CCO, its ability to fulfill its obligations and its manner of fulfillment, the nature of its operations and its compliance with these rules and applicable CCO contract requirements.
(2) Examinations will be conducted under and pursuant to the following practices and procedures, subject to such exceptions, modifications and other practices and procedures as the Authority determines to be necessary or otherwise appropriate under the circumstances:
(a) The Authority will appoint one or more examiners to perform the examination and instruct them as to the scope of the examination. The Authority may contract and coordinate all or portions of the examination with DCBS. Any reference to the Authority in this section shall include DCBS when DCBS is working under an interagency agreement with the Authority to conduct the examination. DCBS is authorized to make recommendations to the Authority and to act in conjunction with the Authority in accordance with this section.
(b) The examiner(s) shall conduct the examination in accordance with the guidelines, practices, principles and procedures set forth in the Examiners Handbook published by the NAIC. The Authority may instruct or allow the examiner(s) to follow or employ such other guidelines, practices, principles and procedures as the Authority determines to be necessary or otherwise appropriate under the circumstances.
(c) The Authority may retain appraisers, independent actuaries, independent certified public accountants and other professionals and specialists as needed.
(d) The Authority, including its appointed examiners, may examine under oath all persons who may have material information regarding the property or business of the person being examined or investigated.
(3) Every person being examined or investigated shall produce all books, records, accounts, papers, documents and computer and other recordings in its possession or control, including, in the case of an examination, the property, assets, business and affairs of the person.
(4) Upon written request of the Authority or its examiners, the CCO, its affiliates and each officer, director, employee, contractor, agent or representative of the CCO and/or the CCO's affiliates promptly shall produce to the Authority or its examiners, or otherwise shall promptly provide the Authority or its examiners with convenient, complete and free access to, all books, records, accounts, papers, documents and computer and other recordings in the possession, custody or control of such persons that relate in any way to the subject matter of the examination. The CCO shall use its best efforts to cause the CCO's affiliates and each officer, director, employee, contractor, agent or representative of the CCO and/or the CCO's affiliates to comply with a request made by the Authority or its examiners under this subsection 4.
(5) The procedure for completion of an examination shall be as follows:
(a) Not later than sixty days following completion the examination, the examiner(s) shall submit to the Authority a draft Report of Examination. The draft report shall include fact-findings and conclusions and also may include proposed recommendations for curative actions to be undertaken by the CCO based on the draft report's fact-findings and conclusions.
(b) The Authority will provide the CCO with a copy of the draft report and allow the CCO a reasonable opportunity to review and comment on the draft report. A copy of the draft report shall be delivered to the CCO by certified mail, addressed to the CCO's home office or to such other point of contact as the CCO may designate in writing to the Authority for this purpose. The Authority will consider the CCO's comments on the draft report and may request additional information or meet with the CCO for the purpose of resolving questions or obtaining additional information. The Authority may consult with or cause the examiner(s) to consider any submissions made by the CCO in response to the draft report and any additional information provided to the Authority by the CCO.
(c) Before the Authority accepts and files the draft report as a final examination report available for publication or makes any matters relating thereto public, the CCO may request a hearing on the draft report and any of its fact-findings, conclusions and recommendations. The CCO must request a hearing by letter, delivered by certified mail to the Authority no later than thirty days following the date on which the draft report was delivered to the CCO ("Hearing Request Period").
(d) The Authority will appoint an Authority staff member or other representative to conduct the hearing contemplated by Section 5(c) ("Hearing Officer"). The Hearing Officer shall consider the evidence and comments presented by the CCO at the hearing, together with any other evidence or comments offered by the examiner(s). Following the hearing, the Hearing Officer will report to the Authority whether any changes should be made to the draft report. The Authority will consider the Hearing Officer's report and will determine whether the draft report should be adopted without change, should be modified or whether comments offered by the CCO should be included as a supplement to the draft report. The Authority shall not be bound by the Hearing Officer's report and may accept or decline to adopt any changes recommended by the Hearing Officer in the Authority's sole discretion. The Authority shall adopt the draft report, and make it available for public inspection as a final examination report on the first to occur of:
(A) Expiration of the Hearing Request Period if no request for hearing is received from the CCO, or
(B) If a hearing is requested by the CCO, completion of the hearing and the Hearing Officer's report, followed by the Authority's adoption of the draft report, with or without modifications, as a final examination report.
(6) The Authority shall make a final examination report available for public inspection. If the Authority, in its sole discretion, considers that doing so is in the public interest, the Authority may publish notice of a final examination report, its availability for public inspection and/or a summary of, or excerpts from, the final examination report by such means (including print, broadcast and web-based media) as the Authority determines to be appropriate under the circumstances.
(7) OAR 410-141-5080 applies generally to examinations and the examination process under this section. In accordance with OAR 410-141-5080, the Authority may designate as confidential and exempt from public inspection any work papers, recorded information, documents and copies thereof that are produced or obtained by or disclosed to the examiner(s) or the Authority during the course of an examination (collectively, "Examination Materials"). If the Authority, in the Authority's sole discretion after notice to the CCO, determines that disclosure is necessary to protect the public interest, the Authority may make available any such Examination Materials to any other person in the course of the examination or to the public generally.
(8) Nothing in this section shall be construed or operate to limit the Authority's right or obligation to disclose a draft report or final examination report, or any Examination Materials to any other federal or state regulatory authority where required by law, where permitted by the CCO's agreement with the Authority, or where otherwise determined by the Authority to be in the public interest.
(9) No cause of action may arise, and no liability may be imposed against the Authority or DCBS, an authorized representative of the Authority or DCBS or any examiner appointed by the Authority or DCBS for any statements made or conduct performed in good faith pursuant to an examination or investigation. No cause of action may arise and no liability may be imposed against any person for communicating or delivering information or documents to the examiner(s) or the Authority or any authorized representative of the Authority in connection with an examination, or for providing testimony in the course of an examination, unless the person doing so acted in bad faith, with fraudulent intent or intent to deceive.
(10) Subsection (9) supplements, and does not abrogate or modify in any way, any common law or statutory privilege or immunity otherwise enjoyed by any person to which that subsection applies.
(11) Facts determined and conclusions made by the Authority pursuant to an examination shall be presumptive evidence of the relevant facts and conclusions in any judicial or administrative action.
(12) In addition to other powers of the Authority under these rules relating to the examination and investigation of CCOs, the Authority may order, at any time and from time to time, a CCO to produce such books, records, accounts, papers, documents and computer and other recordings in the possession of the CCO or its affiliates as are necessary to ascertain the financial condition of the CCO or to determine compliance with these rules. If the CCO fails to comply with such an order, the Authority may examine the affiliates to obtain such information, in addition to imposing sanctions or other remedies under these the Authority rules or the CCO contract.
(13) At any time during the course of, or following, an examination, the Authority may take any other actions and exercise any other powers, remedies or authority available to the Authority or otherwise contemplated by these rules.

Notes

Or. Admin. R. 410-141-5250
DMAP 59-2019, adopt filed 12/18/2019, effective 1/1/2020

Statutory/Other Authority: ORS 413.042, 414.615, 414.625, 414.635 & 414.651

Statutes/Other Implemented: ORS 414.610 - 414.685

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