Chapter 3901: SUPERINTENDENT OF INSURANCE

3901.01 Department of insurance.

There is hereby created a department of insurance which shall have all powers and perform all duties formerly vested in and imposed upon the department of commerce and the superintendent of insurance.

In enacting sections 121.02, 121.03, 121.04, 121.05, 121.08, 121.081, 121.082, 3901.01, 3901.011, 3901.02, 3901.03, 3901.04, 3901.05, and 3901.051 of the Revised Code, it is the intent of the general assembly not to change the law as expressed by Title 39 of the Revised Code prior to September 9, 1957, except insofar as necessary to create a separate department of state government, known as the department of insurance, and to vest in it all the powers and impose upon it all the duties formerly vested in and imposed upon the department of commerce respecting the superintendent of insurance and any officers, deputies, or employees of the division of insurance, and except as otherwise expressly provided by such amendments to former law as are specifically adopted in such sections. All rules, regulations, and orders promulgated or issued by the superintendent of insurance prior to September 9, 1957 are continued and retained in full force and effect until amended, repealed, or revoked by the superintendent of insurance.

Effective Date: 01-10-1961

3901.011 Superintendent of insurance - powers and duties.

The superintendent of insurance shall be the chief executive officer and director of the department of insurance and shall have all the powers and perform all the duties vested in and imposed upon the department of insurance. The superintendent of insurance shall see that the laws relating to insurance are executed and enforced. When a violation of a law relating to insurance is reported to him, he shall take the testimony under oath of all persons supposed to have knowledge of such violations, and cause such testimony to be reduced to writing. If the superintendent decides that there is sufficient evidence, he shall cause the person suspected of such violation to be arrested and charged with such offense, and he shall furnish the proper prosecuting attorney with all the information obtained by such superintendent, the names of witnesses, and a copy of all material testimony taken in the case.

Effective Date: 09-09-1957

3901.02 Appointment or hiring of employees.

The superintendent of insurance may appoint such employees as the prompt dispatch of business requires, including skilled and competent persons to examine and report on the business and affairs of insurance companies.

The superintendent may hire an administrator of financial regulation services as an employee in the unclassified civil service. The superintendent shall fix the compensation of the administrator of financial regulation services.

The superintendent may hire actuaries as employees in the unclassified civil service. The superintendent shall fix the compensation of these actuaries, who shall be fellows of either the casualty actuarial society or the society of actuaries.

All persons now employed in the division of insurance in the classified civil service are transferred to the department of insurance in their respective classifications subject to reassignment as the superintendent of insurance may determine to be in the interest of efficient administration.

Effective Date: 09-29-1999

3901.021 Department of insurance operating fund.

(A) Three-fourths of all appointment and other fees collected under division (B) of section 3905.20 of the Revised Code shall be paid into the state treasury to the credit of the department of insurance operating fund, which is hereby created. The remaining one-fourth shall be credited to the general revenue fund. Other revenues collected by the superintendent of insurance, such as registration fees for sponsored seminars or conferences and grants from private entities, shall be paid into the state treasury to the credit of the department of insurance operating fund.

(B) Seven-tenths of all fees collected under divisions (A)(2), (A)(3), and (A)(6) of section 3905.40 of the Revised Code shall be paid into the state treasury to the credit of the department of insurance operating fund. The remaining three-tenths shall be credited to the general revenue fund.

(C) All operating expenses of the department of insurance except those expenses defined under section 3901.07 of the Revised Code shall be paid from the department of insurance operating fund.

Amended by 128th General AssemblyFile No.18,HB 300, §1, eff. 5/26/2010.

Effective Date: 09-01-2002; 06-30-2005

Related Legislative Provision: See 128th General AssemblyFile No.18,HB 300, §3

See 128th General AssemblyFile No.18,HB 300, §6

3901.03 Warden - duties - office of warden.

The superintendent of insurance shall appoint a warden who shall investigate all reported violations of law relating to insurance, and perform such other duties in the administration of laws relating to insurance as the superintendent may direct.

The office of the warden is hereby designated a criminal justice agency in investigating reported violations of law relating to insurance, and as such is authorized by this state to apply for access to the computerized databases administered by the national crime information center or the law enforcement automated data system in Ohio, and to other computerized databases administered for the purpose of making criminal justice information accessible to state criminal justice agencies.

Effective Date: 03-17-1998

3901.04 Superintendent - specific powers.

(A) As used in this section:

(1) "Laws of this state relating to insurance" include but are not limited to Chapter 1751. notwithstanding section 1751.08, Chapter 1753., Title XXXIX, sections 5725.18 to 5725.25, and Chapter 5729. of the Revised Code. Sections 4717.31, 4717.33, 4717.34, 4717.35, and 4717.37 of the Revised Code are "laws of this state relating to insurance" to the extent those sections apply to insurance companies or insurance agents.

(2) "Person" has the meaning defined in division (A) of section 3901.19 of the Revised Code.

(B) Whenever it appears to the superintendent of insurance, from the superintendent's files, upon complaint or otherwise, that any person has engaged in, is engaged in, or is about to engage in any act or practice declared to be illegal or prohibited by the laws of this state relating to insurance, or defined as unfair or deceptive by such laws, or when the superintendent believes it to be in the best interest of the public and necessary for the protection of the people in this state, the superintendent or anyone designated by the superintendent under the superintendent's official seal may do any one or more of the following:

(1) Require any person to file with the superintendent, on a form that is appropriate for review by the superintendent, an original or additional statement or report in writing, under oath or otherwise, as to any facts or circumstances concerning the person's conduct of the business of insurance within this state and as to any other information that the superintendent considers to be material or relevant to such business;

(2) Administer oaths, summon and compel by order or subpoena the attendance of witnesses to testify in relation to any matter which, by the laws of this state relating to insurance, is the subject of inquiry and investigation, and require the production of any book, paper, or document pertaining to such matter. A subpoena, notice, or order under this section may be served by certified mail, return receipt requested. If the subpoena, notice, or order is returned because of inability to deliver, or if no return is received within thirty days of the date of mailing, the subpoena, notice, or order may be served by ordinary mail. If no return of ordinary mail is received within thirty days after the date of mailing, service shall be deemed to have been made. If the subpoena, notice, or order is returned because of inability to deliver, the superintendent may designate a person or persons to effect either personal or residence service upon the witness. Service of any subpoena, notice, or order and return may also be made in any manner authorized under the Rules of Civil Procedure. Such service shall be made by an employee of the department designated by the superintendent, a sheriff, a deputy sheriff, an attorney, or any person authorized by the Rules of Civil Procedure to serve process.

In the case of disobedience of any notice, order, or subpoena served on a person or the refusal of a witness to testify to a matter regarding which the person may lawfully be interrogated, the court of common pleas of the county where venue is appropriate, on application by the superintendent, may compel obedience by attachment proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from such court, or a refusal to testify therein. Witnesses shall receive the fees and mileage allowed by section 119.094 of the Revised Code. All such fees, upon the presentation of proper vouchers approved by the superintendent, shall be paid out of the appropriation for the contingent fund of the department of insurance. The fees and mileage of witnesses not summoned by the superintendent or the superintendent's designee shall not be paid by the state.

(3) In a case in which there is no administrative procedure available to the superintendent to resolve a matter at issue, request the attorney general to commence an action for a declaratory judgment under Chapter 2721. of the Revised Code with respect to the matter.

(4) Initiate criminal proceedings by presenting evidence of the commission of any criminal offense established under the laws of this state relating to insurance to the prosecuting attorney of any county in which the offense may be prosecuted. At the request of the prosecuting attorney, the attorney general may assist in the prosecution of the violation with all the rights, privileges, and powers conferred by law on prosecuting attorneys including, but not limited to, the power to appear before grand juries and to interrogate witnesses before grand juries.

Effective Date: 10-01-1998; 2008 HB525 07-01-2009; 2008 SB196 07-06-2009

3901.041 Rule-making and adjudicating powers of superintendent.

The superintendent of insurance shall adopt, amend, and rescind rules and make adjudications, necessary to discharge the superintendent's duties and exercise the superintendent's powers, including, but not limited to, the superintendent's duties and powers under Chapters 1751. and 1753. Title XXXIX [39] of the Revised Code, subject to Chapter 119. of the Revised Code.

Effective Date: 10-01-1998

3901.042 Service and transaction fees.

The superintendent of insurance may adopt rules in accordance with Chapter 119. of the Revised Code for the purpose of implementing Amended Substitute House Bill 478 of the 119th General Assembly, including rules that establish fees for any service or transaction that is required by that act. The rules shall specify each such service or transaction and the amount of the fee that is so charged. Any fee collected pursuant to those rules shall be paid into the state treasury to the credit of the department of insurance operating fund.

Effective Date: 01-14-1993

3901.043 Fees for services or transactions performed by department of insurance.

The superintendent of insurance may adopt rules in accordance with Chapter 119. of the Revised Code to establish reasonable fees for any service or transaction performed by the department of insurance pursuant to section 1751.03, 3901.321, 3901.341, 3907.09, 3907.10, 3907.11, 3907.12, 3911.011, 3913.40, 3915.14, 3917.06, 3918.07, 3923.02, 3935.04, 3937.03, or 3953.28 of the Revised Code or any provision in sections 3913.01 to 3913.23 or in Chapter 3905. of the Revised Code, if no fee is otherwise provided under Title XVII or IX of the Revised Code for such service or transaction. Any fee collected pursuant to those rules shall be paid into the state treasury to the credit of the department of insurance operating fund.

Effective Date: 08-06-2004

3901.044 Rules for implementing health insurance portability and accountability act.

The superintendent of insurance may adopt rules in accordance with Chapter 119. of the Revised Code that the superintendent considers necessary and advisable for the purpose of implementing the "Health Insurance Portability and Accountability Act of 1996," Pub. L. No. 104-191 , 110 Stat. 1955, 42 U.S.C.A. 300gg, as amended, and any regulation adopted thereunder.

Effective Date: 06-30-1997

3901.045 Receiving confidential or privileged documents and information.

(A) The superintendent of insurance may receive documents and information, including otherwise confidential or privileged documents and information, from local, state, federal, and international regulatory and law enforcement agencies, from local, state, and federal prosecutors, and from the national association of insurance commissioners and its affiliates and subsidiaries, provided that the superintendent maintains as confidential or privileged any document or information received with notice or the understanding that the document or information is confidential or privileged under the laws of the jurisdiction that is the source of the document or information.

(B) The superintendent may also receive documents and information, including otherwise confidential or privileged documents and information, from the chief deputy rehabilitator, the chief deputy liquidator, other deputy rehabilitators and liquidators, and from any other person employed by, or acting on behalf of, the superintendent pursuant to Chapter 3901. or 3903. of the Revised Code, provided that the superintendent maintains as confidential or privileged any document or information received with the notice or understanding that the document or information is confidential or privileged, except that the superintendent may share and disclose such a document or information when authorized by other sections of the Revised Code.

(C) The superintendent has the authority to maintain as confidential or privileged the documents and information received pursuant to this section.

(D) The superintendent's authority to receive documents and information under this section, from the persons and subject to the conditions listed in this section, is not limited in any way by section 1751.19, 3901.36, 3901.44, 3901.48, 3901.70, 3903.11, 3903.72, 3903.88, 3905.492, 3905.50, 3922.21, or 3999.36 of the Revised Code.

Amended by 129th General AssemblyFile No.48,HB 218, §1, eff. 12/26/2011.

Effective Date: 06-18-2002

3901.05 Deputy superintendent - duties.

In the event of a vacancy in the office of the superintendent of insurance, or in the absence or disability of that officer, or when so directed by the superintendent, the deputy superintendent of insurance shall perform all the duties of the superintendent. In the absence of the superintendent and the deputy superintendent, and when so directed by the superintendent, either assistant superintendent shall perform all the duties of the superintendent. The deputy superintendent, or either assistant superintendent, may serve upon any board or commission of which the superintendent is a member.

Effective Date: 09-09-1957

3901.051 Assistant superintendent - duties.

The assistant superintendents shall perform such duties of the superintendent and such other duties as the superintendent shall direct.

Effective Date: 09-09-1957

3901.06 Instruments under seal of the superintendent.

A certificate, assignment, or conveyance executed in pursuance of law by the superintendent of insurance with the seal of his office affixed thereto shall be received as evidence and may be recorded in the same manner and with like effect as a deed duly acknowledged by an officer authorized by law. In all cases copies of papers in the office of the superintendent, certified by him under the seal of his office, are equal to the original as evidence.

Effective Date: 10-01-1953

3901.07 Examination of financial affairs of insurer.

(A) As used in this section, "insurer" means any person doing or authorized to do any insurance business in this state.

(B)

(1) Before issuing any license to do the business of insurance in this state, the superintendent of insurance, or a person appointed by him, may examine the financial affairs of any insurer.

(2) The superintendent, or any person appointed by him, may examine, as often as he considers it desirable, the affairs of any insurer and of any person as to any matter relevant to the financial affairs of the insurer or to the examination.

(3) The superintendent, or any person appointed by him, shall examine each domestic insurer at least once every three years as to its condition, fulfillment of its contractual obligations, and compliance with applicable laws, provided that he may defer making the examination for a longer period not to exceed five years.

(C) In scheduling and determining the nature, scope, and frequency of any examination authorized or required by division (B) of this section, the superintendent shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, and any other criteria he considers appropriate.

(D) The superintendent, in lieu of making any examination authorized or required by division (B) of this section, may accept the report of an examination of a foreign or alien insurer made and certified by the superintendent of insurance or other insurance supervisory official of the state or government of domicile or state of entry. The examination of an alien insurer shall be limited to its United States business except as otherwise required by the superintendent.

(E) Whenever the superintendent determines to examine the affairs of any insurer pursuant to any examination authorized or required by division (B) of this section, he shall appoint as examiners one or more competent persons not employed by or interested in any insurer except as a policyholder. The superintendent shall instruct the examiners as to the scope of the examination.

Each examiner appointed under this division shall have convenient access at all reasonable hours to the books, records, files, securities, and other documents of the insurer, its managers, agents, or other persons that are relevant to the examination. The examiner may administer oaths and examine any person under oath as to any matter relevant to the affairs of the insurer or the examination.

(F) If the superintendent finds the accounts of an insurer being examined pursuant to any examination authorized or required by division (B) of this section to be inadequate or improperly kept or posted and if the insurer has been afforded a reasonable opportunity to correct the accounts, the superintendent may employ or require the insurer to employ experts to rewrite, post, or balance the accounts. The employment of experts under this division shall be at the expense of the insurer.

(G) In connection with any examination authorized or required by division (B) of this section, the superintendent may appoint one or more competent persons to appraise the real property of the insurer or any real property on which the insurer holds security.

(H) The examiner in charge of any examination authorized or required by division (B) of this section shall make a true report of the examination, verified under oath, that shall comprise only facts appearing upon the books, records, or other documents of the insurer or its agents or other persons examined, or as ascertained from the sworn testimony of its officers or agents or other persons examined concerning its affairs, and such conclusions and recommendations as may be reasonably warranted from those facts. The reports so verified shall be prima-facie evidence in any action or proceeding for the rehabilitation or liquidation of the insurer brought in the name of the state against the insurer or its officers or agents.

(I) The examined insurer, within thirty days after the postmark on the envelope in which the report was mailed, may file with the superintendent written objections to the report. The objections shall be attached to and made a part of the report, which then shall be placed in the files of the department of insurance as a public record.

(J)

(1) The officers, directors, managers, employees, and agents of an insurer shall facilitate in every way any examination authorized or required by division (B) of this section and, to the extent of their authority, aid the examiners and persons appointed or employed pursuant to divisions (E), (F), and (G) of this section in conducting the examination.

(2) No officer, director, manager, employee, or agent of an insurer shall do any of the following:

(a) Fail to comply with division (J)(1) of this section;

(b) Refuse, without just cause, to be examined under oath;

(c) Knowingly obstruct or interfere with an examiner or any person appointed or employed pursuant to division (E), (F), or (G) of this section in the exercise of his authority under this section.

(3) No insurer shall refuse to submit to an examination authorized or required by division (B) of this section. The superintendent, in accordance with Chapter 119. of the Revised Code, may suspend or revoke or refuse to issue or renew the license of any insurer that violates division (J)(3) of this section.

(K) Personnel conducting an examination shall be compensated for each day or portion thereof worked at the rates provided in the examiners' handbook published by the national association of insurance commissioners or the rates applicable to such personnel under section 124.15 or 124.152 of the Revised Code, whichever are higher. Such personnel shall also be reimbursed for their travel and living expenses at rates not to exceed the rates provided in the examiners' handbook published by the association. Personnel who are appointed by the superintendent, but are not employees of the department of insurance, shall be compensated for their work and travel and living expenses at reasonable and customary rates.

(L) If an examination is made of any insurer, the expenses thereof shall be paid by the insurer.

The superintendent shall provide each insurer with an itemized statement of the expenses incurred in the performance of the examination functions authorized or required by this section. Upon receipt of the superintendent's statement, the insurer shall remit the amount thereof to the superintendent who shall remit to the treasurer of state pursuant to section 3901.071 of the Revised Code for deposit in the superintendent's examination fund.

(M) As used in this section, "expenses" means:

(1) The entire compensation for each day or portion thereof worked by all personnel, including those who are not employees of the department of insurance, in:

(a) The conduct of such examination calculated at the rates provided in the examiners' handbook published by the national association of insurance commissioners;

(b) The review and analysis of the annual and any interim financial statements of insurers licensed in this state;

(d) The preparation of the premium or franchise tax liability of licensed insurers;

(e) The review and evaluation of foreign and alien insurers seeking a license in this state;

(f) A portion of the training and continuing education costs of examiners.

(2) Travel and living expenses of all personnel, including those who are not employees of the department, directly engaged in the conduct of such examination calculated at rates not to exceed the rates provided in the examiners' handbook published by the association;

(3) All other incidental expenses incurred by or on behalf of such personnel in the conduct of such examination;

(4) An allocated share of all expenses not paid as described in division (M)(1), (2), or (3) of this section that are necessarily incurred in carrying out the duties of the superintendent under this section, including the expenses of direct overhead and support staff for the examiners and persons appointed or employed pursuant to divisions (E), (F), and (G) of this section.

Effective Date: 08-08-1991

3901.071 Superintendent's examination fund.

All moneys collected by the superintendent of insurance for expenses incurred by the superintendent in conducting examinations pursuant to the Revised Code of the financial affairs of any insurance company doing business in this state, for which the insurance company examined is required to pay the costs, shall be paid to the superintendent. The superintendent shall deposit the money in the state treasury to the credit of the superintendent's examination fund, which is hereby established. Any funds expended or obligated therefrom by the superintendent shall be expended or obligated solely for defrayment of the costs of examinations of the financial affairs of insurance companies made by the superintendent pursuant to the Revised Code. For purposes of this section, "insurance company" means any domestic or foreign stock company, risk retention group, mutual company, mutual protective association, fraternal benefit society, reciprocal or inter-insurance exchange, and health insuring corporation, regardless of the type of coverage written, benefits provided, or guarantees made by each.

Effective Date: 06-04-1997

3901.08 Information from banks.

The superintendent of insurance may make written requisitions upon the officers or directors of any national bank, state bank, or state bank and trust company of this state, and upon any clearing corporation, direct participant, or member bank, as defined in section 3901.51 of the Revised Code, domiciled or doing business in this state, for information as he requires relating to the financial transactions of any of these institutions or entities with any insurance company, fraternal beneficiary association, or assessment association authorized to do business in this state.

Effective Date: 09-28-1990

3901.09 Duty of bank officers.

Any officer or director of any national bank, state bank, or state bank and trust company of this state, and any clearing corporation, direct participant, or member bank, as defined in section 3901.51 of the Revised Code, domiciled or doing business in this state, upon the receipt of the requisition authorized by section 3901.08 of the Revised Code, or within five days after the receipt of the requisition, shall furnish to the superintendent of insurance in writing all the information called for in the requisition and in the manner and form as directed in the requisition.

Effective Date: 09-28-1990

3901.10 Deficiency of company assets.

If it appears to the superintendent of insurance upon satisfactory evidence that the assets of an insurance company, organized under the laws of this state, after deducting therefrom all liabilities including reinsurance, reserve, or unearned premium fund, computed according to the laws of this state, are reduced below the capital required by law for a stock company or the surplus required for any other company, he shall require such company to restore such deficiency within a period designated by him of not less than thirty days nor more than ninety days. He may prohibit such company from issuing any new policies or transacting any new business until it has furnished evidence satisfactory to him that such deficiency has been restored, or until so authorized by a court in a proper proceeding therein. If the superintendent prohibits such company from issuing any new policies or transacting any new business, all licensed agents and solicitors of such company shall be notified of such prohibition in such manner as the superintendent shall direct. Thereafter, no such agent or solicitor shall procure applications for insurance or issue policies for such company until authorized by the superintendent or by a court.

Effective Date: 09-04-1970

3901.11 Acquisition of stock of other insurers.

Any domestic insurer and any foreign or alien insurer authorized to do business in this state may retain, invest in, or acquire the whole or any part of the capital stock of any other insurer, or have a common management with any other insurer, provided such retention, investment, acquisition, or common management is not inconsistent with any other law relating to the investment of the funds of domestic insurers, and provided further that by reason of such retention, investment, or acquisition of such capital stock, or common management, the business of such insurers with the public shall not be conducted in a manner which substantially lessens competition generally in the business of insurance or creates a monopoly therein.

Effective Date: 10-01-1953

3901.12 Interlocking directorate.

Any person otherwise qualified may be a director of two or more insurers which are competitors or which have a common management, but no such interlocking directorate shall be used as a means of substantially lessening competition generally in the business of insurance or of creating a monopoly therein.

Effective Date: 10-01-1953

3901.13 Hearing by superintendent.

Whenever the superintendent of insurance has reason to believe that there is a violation of section 3901.11 or 3901.12 of the Revised Code, he shall serve upon the insurers and directors a notice of a hearing before the superintendent to be held not less than thirty days after the service of such notice, and requiring such insurers and directors to show cause why an order should not be made by the superintendent directing such insurers and directors to cease and desist from such violation. All such hearings shall be conducted in accordance with sections 119.01 to 119.13, inclusive, of the Revised Code.

If, upon such hearing, the superintendent finds that there has been a violation of section 3901.11 or 3901.12 of the Revised Code, he shall issue and cause to be served upon such insurers and directors an order reciting the facts found by him, setting forth the respects in which there has been a violation, and directing such insurers and directors to cease and desist from such violation.

Any such order of the superintendent shall be subject to judicial review in accordance with sections 119.01 to 119.13, inclusive, of the Revised Code. A violation of any such order is, subject to said judicial review, deemed a violation as contemplated by section 3901.16 or 3901.17 of the Revised Code.

Effective Date: 10-01-1953

3901.14 Record and report of superintendent.

The superintendent of insurance shall preserve a full record of his proceedings, including a concise statement of the condition of each insurance company or association authorized to transact business in this state. Each year the superintendent shall report their general conduct and condition, including the information contained in the statement required of them, arranged in tabular form in two separate reports, one pertaining to life insurance companies and the second to all other insurance companies.

Effective Date: 09-06-1965

3901.15 Application of law.

The laws relating to the superintendent of insurance apply to all persons, companies, and associations, whether incorporated or not, engaged in the business of insurance.

Effective Date: 10-01-1953

3901.16 Forfeiture.

Any association, company, or corporation, including a health insuring corporation, which violates any law relating to the superintendent of insurance, any provision of Chapter 1751. or 1753. of the Revised Code, or any insurance law of this state, for the violation of which no forfeiture or penalty is elsewhere provided in the Revised Code, shall forfeit and pay not less than one thousand nor more than ten thousand dollars, to be recovered by an action in the name of the state and on collection to be paid to the superintendent, who shall pay such sum into the state treasury.

Effective Date: 10-01-1998

3901.17 Personal jurisdiction over foreign or alien insurer.

(A) As used in this section:

(1) "Captive insurer" has the meaning defined in section 3905.36 of the Revised Code.

(2) "Insurer" includes, but is not limited to, any person that is an affiliate of or affiliated with the insurer, as defined in division (A) of section 3901.32 of the Revised Code, and any person that is a subsidiary of the insurer as defined in division (F) of section 3901.32 of the Revised Code.

(3) "Laws of this state relating to insurance" has the meaning defined in division (A)(1) of section 3901.04 of the Revised Code.

(4) "Person" has the meaning defined in division (A) of section 3901.19 of the Revised Code.

(5) "Home state" has the same meaning as in section 3905.30 of the Revised Code.

(B) Any of the following acts in this state, effected by mail or otherwise, by any foreign or alien insurer not authorized to transact business within this state, any nonresident person acting on behalf of an insurer, or any nonresident insurance agent subjects the insurer, person, or agent to the exercise of personal jurisdiction over the insurer, person, or agent to the extent permitted by the constitutions of this state and of the United States:

(1) Issuing or delivering contracts of insurance to residents of this state or to corporations authorized to do business therein;

(2) Making or proposing to make any insurance contracts;

(3) Soliciting, taking, or receiving any application for insurance;

(4) Receiving or collecting any premium, commission, membership fee, assessment, dues, or other consideration for any insurance contract or any part thereof;

(5) Disseminating information as to coverage or rates, forwarding applications, inspecting risks, fixing rates, investigating or adjusting claims or losses, or transacting any matters subsequent to effecting a contract of insurance and arising out of it;

(6) Doing any kind of business recognized as constituting the doing of an insurance business under Title XXXIX of the Revised Code or subject to regulation by the superintendent of insurance under the laws of this state relating to insurance.

Any such act shall be considered to be the doing of an insurance business in this state by such insurer, person, or agent and shall be its agreement that service of any lawful subpoena, notice, order, or process is of the same legal force and validity as personal service of the subpoena, notice, order, or process in this state upon the insurer, person, or agent.

(C) Service of process in judicial proceedings shall be as provided by the Rules of Civil Procedure. Service in or out of this state of notice, orders, or subpoenas in administrative proceedings before the superintendent shall be as provided in section 3901.04 of the Revised Code.

(D) Service of any notice, order, subpoena, or process in any such action, suit, or proceeding shall, in addition to the manner provided in division (C) of this section, be valid if served upon any person within this state who, in this state on behalf of such insurer, person, or agent is or has been:

(1) Soliciting, procuring, effecting, or negotiating for insurance;

(2) Making, issuing, or delivering any contract of insurance;

(3) Collecting or receiving any premium, membership fees, assessment, dues, or other consideration for insurance;

(4) Disseminating information as to coverage or rates, forwarding applications, inspecting risks, fixing rates, investigating or adjusting claims or losses, or transacting any matters subsequent to effecting a contract of insurance and arising out of it.

(E) Nothing in this section shall limit or abridge the right to serve any subpoena, order, process, notice, or demand upon any insurer, person, or agent in any other manner permitted by law.

(F) Every person investigating or adjusting any loss or claim under a policy of insurance not excepted under division (I) of this section and issued by any such insurer and covering a subject of insurance that was resident, located, or to be performed in this state at the time of issuance shall immediately report the policy to the superintendent.

(G) If this state is the home state of the insured, each such insurer that does any of the acts set forth in division (B) of this section shall be subject to the requirements of section 3905.36 of the Revised Code.

(H) No contract of insurance effected in this state by mail or otherwise by any such insurer is enforceable by the insurer.

(I) This section does not apply to:

(1) Insurance obtained pursuant to sections 3905.30 to 3905.36 of the Revised Code;

(2) The transaction of reinsurance by insurers;

(3) Transactions in this state involving a policy of group life or group accident and sickness insurance solicited, written, and delivered outside this state;

(4) Transactions involving contracts of insurance independently procured through negotiations occurring entirely outside this state which are reported and the tax is paid in accordance with section 3905.36 of the Revised Code ;

(5) An attorney at law acting on behalf of the attorney's clients in the adjustment of claims or losses;

(6) Ocean marine insurance;

(7) Transactions involving policies issued by a captive insurer.

Amended by 129th General AssemblyFile No.5,HB 122, §1, eff. 6/17/2011.

Effective Date: 06-30-1997; 06-30-2005

3901.18 Requirements for unauthorized foreign or alien insurer to enter an appearance.

(A) Before any unauthorized foreign or alien insurer may enter an appearance in any court action, suit, or proceeding or in any administrative proceeding before the superintendent of insurance, such unauthorized insurer shall either:

(1) Deposit with the clerk of the court in which such action, suit, or proceeding is pending or with the superintendent if such proceeding is before him, cash or securities or file with such clerk or the superintendent a bond with good and sufficient sureties, to be approved by the court or the superintendent, in an amount to be fixed by the court sufficient to secure the payment of any final judgment which may be rendered in any such court action, suit, or proceeding or by the superintendent sufficient to satisfy any order issued by the superintendent;

(2) Procure a certificate of authority to transact the business of insurance in this state.

(B) In any action, suit, or proceeding, in which service is made in the manner provided in division (B) or (C) of section 3901.17 of the Revised Code the court or, if the proceeding is before the superintendent of insurance, the superintendent may order such postponement as may be necessary to afford the unauthorized insurer reasonable opportunity to comply with the provisions of division (A) of this section and to defend such action, suit, or proceeding.

(C) Nothing in division (A) of this section shall prevent an unauthorized foreign or alien insurer from filing a motion to set aside service made in the manner provided in division (B) or (C) of section 3901.17 of the Revised Code on the ground either:

(1) That such unauthorized insurer has not done any of the acts enumerated in division (A) of section 3901.17 of the Revised Code;

(2) That the person on whom service was made pursuant to division (C) of section 3901.17 of the Revised Code was not doing or had not done any of the acts enumerated in division (C) of section 3901.17 of the Revised Code.

(D) The provisions of this section do not apply to ocean marine insurance.

Effective Date: 11-21-1967

3901.19 Unfair and deceptive practices definitions.

As used in sections 3901.19 to 3901.26 of the Revised Code:

(A) "Person" means any individual, corporation, association, partnership, reciprocal exchange, inter-insurer, fraternal benefit society, title guarantee and trust company, health insuring corporation, and any other legal entity.

(B) "Residents" includes any individual, partnership, or corporation.

(C) "Maternity benefits" means those benefits calculated to indemnify the insured for hospital and medical expenses fairly and reasonably associated with a pregnancy and childbirth.

(D) "Insurance" includes, but is not limited to, any policy or contract offered, issued, sold, or marketed by an insurer, corporation, association, organization, or entity regulated by the superintendent of insurance or doing business in this state. Nothing in any other section of the Revised Code shall be construed to exclude single premium deferred annuities from the regulation of the superintendent under sections 3901.19 to 3901.26 of the Revised Code.

(E) "Affiliate" means any company that controls, is controlled by, or is under common control with, another company.

(F) "Customer" means an individual who purchases, applies to purchase, or is solicited to purchase insurance products primarily for personal, family, or household purposes.

(G) "Depository institution" means a bank, savings bank, savings and loan association, or credit union that is subject to regulation or supervision by the United States or any state. "Depository institution" does not include an insurance company.

(H) "Insurance agent" or "agent" has the same meaning as in section 3905.01 of the Revised Code.

(I) "Insurer" has the same meaning as in section 3901.32 of the Revised Code.

(J) "Policy" or "certificate" means a contract of insurance, indemnity, medical, health or hospital service, suretyship, or annuity issued, proposed for issuance, or intended for issuance by any insurer.

Effective Date: 09-01-2002

3901.20 Prohibition against unfair or deceptive acts.

No person shall engage in this state in any trade practice which is defined in sections 3901.19 to 3901.23 of the Revised Code as, or determined pursuant to those sections to be, an unfair or deceptive act or practice in the business of insurance.

This section applies to any person, as defined in section 3901.19 of the Revised Code, regardless of whether the person is licensed or required to be licensed by the superintendent of insurance.

Effective Date: 01-05-1988

3901.21 Unfair and deceptive acts or practices in business of insurance defined.

The following are hereby defined as unfair and deceptive acts or practices in the business of insurance:

(A) Making, issuing, circulating, or causing or permitting to be made, issued, or circulated, or preparing with intent to so use, any estimate, illustration, circular, or statement misrepresenting the terms of any policy issued or to be issued or the benefits or advantages promised thereby or the dividends or share of the surplus to be received thereon, or making any false or misleading statements as to the dividends or share of surplus previously paid on similar policies, or making any misleading representation or any misrepresentation as to the financial condition of any insurer as shown by the last preceding verified statement made by it to the insurance department of this state, or as to the legal reserve system upon which any life insurer operates, or using any name or title of any policy or class of policies misrepresenting the true nature thereof, or making any misrepresentation or incomplete comparison to any person for the purpose of inducing or tending to induce such person to purchase, amend, lapse, forfeit, change, or surrender insurance.

Any written statement concerning the premiums for a policy which refers to the net cost after credit for an assumed dividend, without an accurate written statement of the gross premiums, cash values, and dividends based on the insurer's current dividend scale, which are used to compute the net cost for such policy, and a prominent warning that the rate of dividend is not guaranteed, is a misrepresentation for the purposes of this division.

(B) Making, publishing, disseminating, circulating, or placing before the public or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station, or in any other way, or preparing with intent to so use, an advertisement, announcement, or statement containing any assertion, representation, or statement, with respect to the business of insurance or with respect to any person in the conduct of the person's insurance business, which is untrue, deceptive, or misleading.

(C) Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting, or encouraging the making, publishing, disseminating, or circulating, or preparing with intent to so use, any statement, pamphlet, circular, article, or literature, which is false as to the financial condition of an insurer and which is calculated to injure any person engaged in the business of insurance.

(D) Filing with any supervisory or other public official, or making, publishing, disseminating, circulating, or delivering to any person, or placing before the public, or causing directly or indirectly to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer.

Making any false entry in any book, report, or statement of any insurer with intent to deceive any agent or examiner lawfully appointed to examine into its condition or into any of its affairs, or any public official to whom such insurer is required by law to report, or who has authority by law to examine into its condition or into any of its affairs, or, with like intent, willfully omitting to make a true entry of any material fact pertaining to the business of such insurer in any book, report, or statement of such insurer, or mutilating, destroying, suppressing, withholding, or concealing any of its records.

(E) Issuing or delivering or permitting agents, officers, or employees to issue or deliver agency company stock or other capital stock or benefit certificates or shares in any common-law corporation or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to insurance.

(F) Making or permitting any unfair discrimination among individuals of the same class and equal expectation of life in the rates charged for any contract of life insurance or of life annuity or in the dividends or other benefits payable thereon, or in any other of the terms and conditions of such contract.

(G)

(1) Except as otherwise expressly provided by law, knowingly permitting or offering to make or making any contract of life insurance, life annuity or accident and health insurance, or agreement as to such contract other than as plainly expressed in the contract issued thereon, or paying or allowing, or giving or offering to pay, allow, or give, directly or indirectly, as inducement to such insurance, or annuity, any rebate of premiums payable on the contract, or any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the contract; or giving, or selling, or purchasing, or offering to give, sell, or purchase, as inducement to such insurance or annuity or in connection therewith, any stocks, bonds, or other securities, or other obligations of any insurance company or other corporation, association, or partnership, or any dividends or profits accrued thereon, or anything of value whatsoever not specified in the contract.

(2) Nothing in division (F) or division (G)(1) of this section shall be construed as prohibiting any of the following practices: (a) in the case of any contract of life insurance or life annuity, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the company and its policyholders; (b) in the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously for a specified period made premium payments directly to an office of the insurer in an amount which fairly represents the saving in collection expenses; (c) readjustment of the rate of premium for a group insurance policy based on the loss or expense experience thereunder, at the end of the first or any subsequent policy year of insurance thereunder, which may be made retroactive only for such policy year.

(H) Making, issuing, circulating, or causing or permitting to be made, issued, or circulated, or preparing with intent to so use, any statement to the effect that a policy of life insurance is, is the equivalent of, or represents shares of capital stock or any rights or options to subscribe for or otherwise acquire any such shares in the life insurance company issuing that policy or any other company.

(I) Making, issuing, circulating, or causing or permitting to be made, issued or circulated, or preparing with intent to so issue, any statement to the effect that payments to a policyholder of the principal amounts of a pure endowment are other than payments of a specific benefit for which specific premiums have been paid.

(J) Making, issuing, circulating, or causing or permitting to be made, issued, or circulated, or preparing with intent to so use, any statement to the effect that any insurance company was required to change a policy form or related material to comply with Title XXXIX of the Revised Code or any regulation of the superintendent of insurance, for the purpose of inducing or intending to induce any policyholder or prospective policyholder to purchase, amend, lapse, forfeit, change, or surrender insurance.

(K) Aiding or abetting another to violate this section.

(L) Refusing to issue any policy of insurance, or canceling or declining to renew such policy because of the sex or marital status of the applicant, prospective insured, insured, or policyholder.

(M) Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of insurance, other than life insurance, or in the benefits payable thereunder, or in underwriting standards and practices or eligibility requirements, or in any of the terms or conditions of such contract, or in any other manner whatever.

(N) Refusing to make available disability income insurance solely because the applicant's principal occupation is that of managing a household.

(O) Refusing, when offering maternity benefits under any individual or group sickness and accident insurance policy, to make maternity benefits available to the policyholder for the individual or individuals to be covered under any comparable policy to be issued for delivery in this state, including family members if the policy otherwise provides coverage for family members. Nothing in this division shall be construed to prohibit an insurer from imposing a reasonable waiting period for such benefits under an individual sickness and accident insurance policy issued to an individual who is not a federally eligible individual or a nonemployer-related group sickness and accident insurance policy, but in no event shall such waiting period exceed two hundred seventy days.

For purposes of division (O) of this section, "federally eligible individual" means an eligible individual as defined in 45 C.F.R. 148.103.

(P) Using, or permitting to be used, a pattern settlement as the basis of any offer of settlement. As used in this division, "pattern settlement" means a method by which liability is routinely imputed to a claimant without an investigation of the particular occurrence upon which the claim is based and by using a predetermined formula for the assignment of liability arising out of occurrences of a similar nature. Nothing in this division shall be construed to prohibit an insurer from determining a claimant's liability by applying formulas or guidelines to the facts and circumstances disclosed by the insurer's investigation of the particular occurrence upon which a claim is based.

(Q) Refusing to insure, or refusing to continue to insure, or limiting the amount, extent, or kind of life or sickness and accident insurance or annuity coverage available to an individual, or charging an individual a different rate for the same coverage solely because of blindness or partial blindness. With respect to all other conditions, including the underlying cause of blindness or partial blindness, persons who are blind or partially blind shall be subject to the same standards of sound actuarial principles or actual or reasonably anticipated actuarial experience as are sighted persons. Refusal to insure includes, but is not limited to, denial by an insurer of disability insurance coverage on the grounds that the policy defines "disability" as being presumed in the event that the eyesight of the insured is lost. However, an insurer may exclude from coverage disabilities consisting solely of blindness or partial blindness when such conditions existed at the time the policy was issued. To the extent that the provisions of this division may appear to conflict with any provision of section 3999.16 of the Revised Code, this division applies.

(R)

(1) Directly or indirectly offering to sell, selling, or delivering, issuing for delivery, renewing, or using or otherwise marketing any policy of insurance or insurance product in connection with or in any way related to the grant of a student loan guaranteed in whole or in part by an agency or commission of this state or the United States, except insurance that is required under federal or state law as a condition for obtaining such a loan and the premium for which is included in the fees and charges applicable to the loan; or, in the case of an insurer or insurance agent, knowingly permitting any lender making such loans to engage in such acts or practices in connection with the insurer's or agent's insurance business.

(2) Except in the case of a violation of division (G) of this section, division (R)(1) of this section does not apply to either of the following:

(a) Acts or practices of an insurer, its agents, representatives, or employees in connection with the grant of a guaranteed student loan to its insured or the insured's spouse or dependent children where such acts or practices take place more than ninety days after the effective date of the insurance;

(b) Acts or practices of an insurer, its agents, representatives, or employees in connection with the solicitation, processing, or issuance of an insurance policy or product covering the student loan borrower or the borrower's spouse or dependent children, where such acts or practices take place more than one hundred eighty days after the date on which the borrower is notified that the student loan was approved.

(S) Denying coverage, under any health insurance or health care policy, contract, or plan providing family coverage, to any natural or adopted child of the named insured or subscriber solely on the basis that the child does not reside in the household of the named insured or subscriber.

(T)

(1) Using any underwriting standard or engaging in any other act or practice that, directly or indirectly, due solely to any health status-related factor in relation to one or more individuals, does either of the following:

(a) Terminates or fails to renew an existing individual policy, contract, or plan of health benefits, or a health benefit plan issued to an employer, for which an individual would otherwise be eligible;

(b) With respect to a health benefit plan issued to an employer, excludes or causes the exclusion of an individual from coverage under an existing employer-provided policy, contract, or plan of health benefits.

(2) The superintendent of insurance may adopt rules in accordance with Chapter 119. of the Revised Code for purposes of implementing division (T)(1) of this section.

(3) For purposes of division (T)(1) of this section, "health status-related factor" means any of the following:

(a) Health status;

(b) Medical condition, including both physical and mental illnesses;

(d) Receipt of health care;

(e) Medical history;

(f) Genetic information;

(g) Evidence of insurability, including conditions arising out of acts of domestic violence;

(h) Disability.

(U) With respect to a health benefit plan issued to a small employer, as those terms are defined in section 3924.01 of the Revised Code, negligently or willfully placing coverage for adverse risks with a certain carrier, as defined in section 3924.01 of the Revised Code.

(V) Using any program, scheme, device, or other unfair act or practice that, directly or indirectly, causes or results in the placing of coverage for adverse risks with another carrier, as defined in section 3924.01 of the Revised Code.

(W) Failing to comply with section 3923.23, 3923.231, 3923.232, 3923.233, or 3923.234 of the Revised Code by engaging in any unfair, discriminatory reimbursement practice.

(X) Intentionally establishing an unfair premium for, or misrepresenting the cost of, any insurance policy financed under a premium finance agreement of an insurance premium finance company.

(Y)

(1)

(a) Limiting coverage under, refusing to issue, canceling, or refusing to renew, any individual policy or contract of life insurance, or limiting coverage under or refusing to issue any individual policy or contract of health insurance, for the reason that the insured or applicant for insurance is or has been a victim of domestic violence;

(b) Adding a surcharge or rating factor to a premium of any individual policy or contract of life or health insurance for the reason that the insured or applicant for insurance is or has been a victim of domestic violence;

(c) Denying coverage under, or limiting coverage under, any policy or contract of life or health insurance, for the reason that a claim under the policy or contract arises from an incident of domestic violence;

(d) Inquiring, directly or indirectly, of an insured under, or of an applicant for, a policy or contract of life or health insurance, as to whether the insured or applicant is or has been a victim of domestic violence, or inquiring as to whether the insured or applicant has sought shelter or protection from domestic violence or has sought medical or psychological treatment as a victim of domestic violence.

(2) Nothing in division (Y)(1) of this section shall be construed to prohibit an insurer from inquiring as to, or from underwriting or rating a risk on the basis of, a person's physical or mental condition, even if the condition has been caused by domestic violence, provided that all of the following apply:

(a) The insurer routinely considers the condition in underwriting or in rating risks, and does so in the same manner for a victim of domestic violence as for an insured or applicant who is not a victim of domestic violence;

(b) The insurer does not refuse to issue any policy or contract of life or health insurance or cancel or refuse to renew any policy or contract of life insurance, solely on the basis of the condition, except where such refusal to issue, cancellation, or refusal to renew is based on sound actuarial principles or is related to actual or reasonably anticipated experience;

(c) The insurer does not consider a person's status as being or as having been a victim of domestic violence, in itself, to be a physical or mental condition;

(d) The underwriting or rating of a risk on the basis of the condition is not used to evade the intent of division (Y)(1) of this section, or of any other provision of the Revised Code.

(3)

(a) Nothing in division (Y)(1) of this section shall be construed to prohibit an insurer from refusing to issue a policy or contract of life insurance insuring the life of a person who is or has been a victim of domestic violence if the person who committed the act of domestic violence is the applicant for the insurance or would be the owner of the insurance policy or contract.

(b) Nothing in division (Y)(2) of this section shall be construed to permit an insurer to cancel or refuse to renew any policy or contract of health insurance in violation of the "Health Insurance Portability and Accountability Act of 1996," 110 Stat. 1955, 42 U.S.C.A. 300gg - 41(b), as amended, or in a manner that violates or is inconsistent with any provision of the Revised Code that implements the "Health Insurance Portability and Accountability Act of 1996."

(4) An insurer is immune from any civil or criminal liability that otherwise might be incurred or imposed as a result of any action taken by the insurer to comply with division (Y) of this section.

(5) As used in division (Y) of this section, "domestic violence" means any of the following acts:

(a) Knowingly causing or attempting to cause physical harm to a family or household member;

(b) Recklessly causing serious physical harm to a family or household member;

(c) Knowingly causing, by threat of force, a family or household member to believe that the person will cause imminent physical harm to the family or household member.

For the purpose of division (Y)(5) of this section, "family or household member" has the same meaning as in section 2919.25 of the Revised Code.

Nothing in division (Y)(5) of this section shall be construed to require, as a condition to the application of division (Y) of this section, that the act described in division (Y)(5) of this section be the basis of a criminal prosecution.

(Z) Disclosing a coroner's records by an insurer in violation of section 313.10 of the Revised Code.

(AA) Making, issuing, circulating, or causing or permitting to be made, issued, or circulated any statement or representation that a life insurance policy or annuity is a contract for the purchase of funeral goods or services.

(BB) With respect to private passenger automobile insurance, charging premium rates that are excessive, inadequate, or unfairly discriminatory, pursuant to division (D) of section 3937.02 of the Revised Code, based solely on the location of the residence of the insured .

The enumeration in sections 3901.19 to 3901.26 of the Revised Code of specific unfair or deceptive acts or practices in the business of insurance is not exclusive or restrictive or intended to limit the powers of the superintendent of insurance to adopt rules to implement this section, or to take action under other sections of the Revised Code.

This section does not prohibit the sale of shares of any investment company registered under the "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C.A. 80a-1, as amended, or any policies, annuities, or other contracts described in section 3907.15 of the Revised Code.

As used in this section, "estimate," "statement," "representation," "misrepresentation," "advertisement," or "announcement" includes oral or written occurrences.

Amended by 129th General AssemblyFile No.181,HB 278, §1, eff. 3/22/2013.

Effective Date: 03-22-1999; 08-17-2006; 2008 SB196 07-06-2009

3901.211 Lending of money, extension of credit - prohibited acts.

(A)

(1) No person may require as a condition precedent to the lending of money or the extension of credit, or any renewal thereof, that the person to whom such money or credit is extended or whose obligation a creditor is to acquire or finance, negotiate any policy or renewal thereof through a particular insurer or group of insurers or agent or group of agents.

(2) No person may reject an insurance policy solely because the policy has been issued or underwritten by a person that is not associated with the person, or an affiliate of the person, rejecting the policy.

(B) No person that lends money or extends credit may do any of the following:

(1) As a condition for extending credit or offering any product or service that is equivalent to an extension of credit, require that a customer obtain insurance from a depository institution or an affiliate of a depository institution, or from a particular insurer, agent, or other person. However, this provision does not prohibit a person from informing a customer or prospective customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the procurement by the customer of acceptable insurance, or that insurance is available from the person or an affiliate of that person.

(2) Unreasonably reject a policy furnished by the customer or borrower for the protection of the property securing the credit or lien. A rejection shall not be deemed unreasonable if it is based on reasonable standards, uniformly applied. Such standards may include, but are not limited to, standards relating to the extent of coverage required and the financial soundness and services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for the rejection of a policy because it contains coverage in addition to that required in the credit transaction.

(3) Require that any customer, borrower, mortgagor, purchaser, insurer, broker, or agent pay a separate charge in connection with the handling of any policy required as security for a loan on real estate or pay a separate charge to substitute the policy of one insurer for that of another. Division (B)(3) of this section does not apply to the interest that may be charged on premium loans or premium advancements in accordance with the terms of the loan or credit document. Division (B)(3) of this section does not apply to required charges when the person or an affiliate of that person is the licensed agent providing the insurance.

(4) Require any procedures or conditions of duly licensed agents or insurers not customarily required of the agents or insurers affiliated, or in any way connected, with the person that lends money or extends credit;

(5) Use an advertisement or other insurance promotional material that would cause a reasonable person to mistakenly believe that the federal government or the state is responsible for the insurance sales activity of, or stands behind the credit of, the person, depository institution, or an affiliate of the person or depository institution;

(6) Use an advertisement or other insurance promotional material that would cause a reasonable person to mistakenly believe that the federal government or the state guarantees any return on insurance products or is a source of payment on any insurance obligation of or sold by the person or an affiliate of the person;

(7) Pay or receive any commission, brokerage fee, or other compensation as an agent, unless the person holds a valid agent's license for the applicable class of insurance. However, an unlicensed person may make a referral to a licensed agent, provided that the person does not discuss specific insurance policy terms and conditions. The unlicensed person may be compensated for the referral; however, in the case of a referral of a customer, the unlicensed person may be compensated only if the compensation is a fixed dollar amount for each referral that does not depend on whether the customer purchases the insurance product from the licensed agent. Further, any person that accepts deposits from the public in an area where such transactions are routinely conducted in the depository institution may receive for each customer referral no more than a one-time, nominal fee of a fixed dollar amount that does not depend on whether the referral results in a transaction.

(8) Solicit or sell insurance, other than credit insurance or flood insurance, unless the solicitation or sale is completed through documents separate from any credit transactions;

(9) Include the expense of insurance premiums, other than credit insurance premiums or flood insurance premiums, in the primary credit transaction without the express written consent of the customer;

(10) As a condition of financing a residential mortgage or providing other financing arrangements for residential property, including a mobile or manufactured home, require a mortgagor or borrower to purchase homeowners insurance coverage or other residential property insurance coverage in an amount that exceeds the replacement value of the dwelling and its contents, regardless of the amount of mortgage or other financing arrangement entered into by the mortgagor or borrower. The fair market value of the land on which the dwelling is located shall not be included in the replacement value of the dwelling and its contents.

(C)

(1) If an application for a loan or extension of credit is pending before a person that lends money or extends credit and that also solicits insurance primarily for personal, family, or household purposes in connection with that loan or extension of credit, that person shall disclose to the customer, in writing, that the insurance related to the credit extension may be purchased from an insurer or agent of the customer's choice, subject only to the lender's right to reject a given insurer or agent as provided in division (B)(2) of this section. Further, the disclosure shall inform the customer that the customer's choice of an insurer or agent will not affect the credit decision or credit terms in any way, except that the person lending money or extending credit may impose reasonable requirements as provided in division (B)(2) of this section.

(2) If an application for a loan or extension of credit is pending before a person that lends money or extends credit and that also solicits insurance primarily for personal, family, or household purposes in connection with that loan or extension of credit, that person shall obtain a written acknowledgement of the receipt of the disclosure at the time the customer receives the disclosure or at the time of the initial purchase of the insurance policy. If the solicitation is conducted by telephone, the person shall obtain an oral acknowledgement of receipt of the disclosure, maintain sufficient documentation to show that the acknowledgement was given by the customer, and make reasonable efforts to obtain a written acknowledgement from the customer. If a customer affirmatively consents to receiving the disclosures electronically and the disclosures are provided in a format that the customer may retain or obtain later, the person may provide the disclosure and obtain acknowledgement of the receipt of the disclosure from the customer using electronic media.

(3) This division does not apply to the offering or sale of limited line credit insurance as defined in section 3905.01 of the Revised Code.

(D)

(1) A depository institution that solicits, sells, advertises, or offers insurance, and any person that solicits, sells, advertises, or offers insurance on behalf of a depository institution or on the premises of a depository institution, shall disclose to the customer in writing, where practicable and in a clear and conspicuous manner, prior to a sale, that the insurance:

(a) Is not a deposit;

(b) Is not insured by the federal deposit insurance corporation or any other federal government agency;

(c) Is not guaranteed by the depository institution, and, when applicable, that the insurance is not guaranteed by an affiliate of the depository institution or by any person that is soliciting, selling, advertising, or offering insurance;

(d) Involves investment risk including the possible loss of value, where this disclosure is appropriate.

(2) A depository institution that solicits, sells, advertises, or offers insurance, and any person that solicits, sells, advertises, or offers insurance on behalf of a depository institution or on the premises of a depository institution, shall obtain written acknowledgement of the receipt of the disclosure from the customer at the time the customer receives the disclosure or at the time of the initial purchase of the insurance policy. If the solicitation is conducted by telephone, the person or depository institution shall obtain an oral acknowledgement of receipt of the disclosure, maintain sufficient documentation to show that the acknowledgement was given by the customer, and make reasonable efforts to obtain a written acknowledgement from the customer. If a customer affirmatively consents to receiving the disclosures electronically and the disclosures are provided in a format that the customer may retain or obtain later, the person or depository institution may provide the disclosure and obtain acknowledgement of the receipt of the disclosure from the customer using electronic media.

(3) For purposes of divisions (D)(1) and (2) of this section, an affiliate of a depository institution is subject to these requirements only to the extent that it sells, solicits, advertises, or offers insurance products or annuities at an office of a depository institution or on behalf of a depository institution. These requirements apply only when an individual purchases, applies to purchase, or is solicited to purchase insurance products or annuities primarily for personal, family, or household purposes and only to the extent that a disclosure would be accurate.

(4) For purposes of division (D)(1) of this section, a person is selling, soliciting, advertising, or offering insurance on behalf of a depository institution, whether at an office of the depository institution or another location, if at least one of the following applies:

(a) The person represents to the customer that the sale, solicitation, advertisement, or offer of insurance is by or on behalf of the depository institution;

(b) The depository institution refers a customer to the person that sells insurance and the depository institution has a contractual arrangement to receive commissions or fees derived from the sale of insurance resulting from the referral;

(c) Documents evidencing the sale, solicitation, advertisement, or offer of insurance identify or refer to the depository institution.

(E) Nothing in this section shall prevent a person that lends money or extends credit from placing insurance on real or personal property in the event the mortgagor, borrower, or purchaser has failed to provide required insurance in accordance with the terms of the loan or credit document.

(F)

(1) A violation of this section is an unfair and deceptive act or practice in the business of insurance under sections 3901.19 to 3901.26 of the Revised Code.

(2) Any person subject to this section shall, upon reasonable notice, make available to the superintendent of insurance all books and records relating to insurance transactions.

Effective Date: 09-01-2002; 04-27-2005

3901.22 Hearings on violation - orders - administrative remedies.

(A) The superintendent of insurance may conduct hearings to determine whether violations of section 3901.20 of the Revised Code have occurred. Any person aggrieved with respect to any act that the person believes to be an unfair or deceptive act or practice in the business of insurance, as defined in section 3901.21 or 3901.211 of the Revised Code or in any rule of the superintendent, may make written application to the superintendent for a hearing to determine if there has been a violation of section 3901.20 of the Revised Code. The application shall specify the grounds to be relied upon by the applicant. If the superintendent finds that the application is made in good faith, that the applicant would be so aggrieved if the applicant's grounds are established, and that such grounds otherwise justify holding such a hearing, the superintendent shall hold a hearing to determine whether the act specified in the application is a violation of section 3901.20 of the Revised Code. Notice of any hearing held under the authority of this section, the conduct of the hearing, the orders issued pursuant to it, the review of the orders and all other matters relating to the holding of the hearing shall be governed by Chapter 119. of the Revised Code.

(B) Upon good cause shown, the superintendent shall permit any person to intervene, appear, and be heard at the hearing, either in person or by counsel.

(D) If the superintendent, by written order, finds that any person has violated section 3901.20 of the Revised Code, the superintendent shall issue an order requiring that person to cease and desist from engaging in the violation. In addition, the superintendent may impose any or all of the following administrative remedies upon the person:

(1) The superintendent may suspend or revoke the person's license to engage in the business of insurance;

(2) The superintendent may order that an insurance company or insurance agency not employ the person or permit the person to serve as a director, consultant, or in any other capacity for such time as the superintendent determines would serve the public interest. No application for termination of such an order for an indefinite time shall be filed within two years of its effective date.

(3) The superintendent may order the person to return any payments received by the person as a result of the violation;

(4) If the superintendent issues an order pursuant to division (D)(3) of this section, the superintendent shall order the person to pay statutory interest on such payments.

If the superintendent does not issue orders pursuant to divisions (D)(3) and (4) of this section, the superintendent shall expressly state in the cease-and-desist order the reasons for not issuing such orders.

(5) The superintendent may order the person to pay to the state treasury for credit to the department's operating fund an amount, not in excess of one hundred thousand dollars, equal to one-half of the expenses reasonably incurred by the superintendent to retain attorneys, actuaries, accountants, and other experts not otherwise a part of the superintendent's staff to assist directly in the conduct of any investigations and hearings conducted with respect to violations committed by the person.

(E) If the superintendent has reasonable cause to believe that an order issued pursuant to division (D) of this section has been violated in whole or in part, the superintendent may, unless such order is stayed by a court of competent jurisdiction, request the attorney general to commence and prosecute any appropriate action or proceeding in the name of the state against the person.

Such action may include, but need not be limited to, the commencement of a class action under Civil Rule 23 on behalf of policyholders, subscribers, applicants for policies or contracts, or other insurance consumers for damages caused by or unjust enrichment received as a result of the violation.

(F) In addition to any penalties imposed pursuant to this chapter, the court may, in an action brought pursuant to division (E) of this section, impose any of the following:

(1) For each act or practice found to be in violation of section 3901.20 of the Revised Code, a civil penalty of not more than three thousand five hundred dollars for each violation but not to exceed an aggregate penalty of thirty-five thousand dollars in any six-month period, provided that a series of similar acts or practices prohibited by section 3901.20 of the Revised Code and committed by the same person but not in separate insurance sales transactions shall be considered a single violation;

(2) For each violation of a cease and desist order issued by the superintendent pursuant to this section, a civil penalty of not more than ten thousand dollars;

(3) In addition to any other appropriate relief, the court may order any or all of the remedies specified in division (D) of this section.

(G) The superintendent, under a settlement agreement to which a person has consented in writing for the purpose of assuring the person's correction of a series of offenses and future compliance with the laws of this state relating to the business of insurance, may impose a single penalty in whatever amount the parties determine to be justified under the circumstances.

(H) A court of common pleas, in a civil action commenced by the attorney general on behalf of the superintendent under Civil Rule 65, may grant a temporary restraining order, preliminary injunction, or permanent injunction to restrain or prevent a violation or threatened violation of any provision of section 3901.20 of the Revised Code, if the court finds that the defendant has violated, is violating, or is threatening to violate such provision, that immediate and irreparable injury, loss, or damage will result if such relief is not granted, and that no adequate remedy at law exists to prevent such irreparable injury, loss, or damage.

(I) If the superintendent's position in initiating a matter in controversy pursuant to this section and section 3901.221 of the Revised Code was not substantially justified, upon motion of the person who prevailed in the hearing or in the appropriate court, if an adjudication order was appealed or a civil action was commenced, the superintendent or the court shall order the department of insurance to pay such person an amount, not in excess of one hundred thousand dollars, equal to one-half of the expenses reasonably incurred by the person in connection with the related proceedings. An award pursuant to this division may be reduced or denied if special circumstances make an award unjust or if the person engaged in conduct that unduly and unreasonably protracted the final resolution of the matter in controversy. If the department does not pay such award or no such funds are available, the award shall be treated as if it were a judgment under Chapter 2743. of the Revised Code and be payable in accordance with the procedures specified in section 2743.19 of the Revised Code, except that interest shall not be paid in relation to the award.

Effective Date: 09-01-2002

3901.221 Cease-and-desist orders.

If a violation of section 3901.20 of the Revised Code has caused, is causing, or is about to cause substantial and material harm, the superintendent of insurance may issue an order that the person cease and desist from any activity violating such section. Notice of the order shall be mailed by certified mail, return receipt requested, or served in any manner provided in section 3901.04 of the Revised Code, immediately after its issuance by the superintendent to the person subject to the order and to all persons known to be involved in the violation. The superintendent may thereafter publicize or otherwise make known to all interested persons that the order has been issued.

The notice shall specify the particular act, omission, practice, or transaction that is subject to the cease-and-desist order and shall set a date, not more than fifteen days after the date of the cease-and-desist order, for a hearing on the continuation or revocation of the order. The person shall comply with the order immediately upon receipt of notice of the order. The superintendent may, upon the application of a party and for good cause shown, continue the hearing. Chapter 119. of the Revised Code applies to such hearings to the extent that that chapter does not conflict with the procedures set forth in this section. The superintendent shall, within fifteen days after objections are submitted to the hearing officer's report and recommendation, issue a final order either confirming or revoking the cease-and-desist order. The final order may be appealed as provided under section 119.12 of the Revised Code. The remedy under this section is cumulative and concurrent with the remedies available under section 3901.22 of the Revised Code and may be enforced by the attorney general at the request of the superintendent as provided in division (E) of that section.

Effective Date: 01-05-1988

3901.23 Self-incrimination.

If any person asks to be excused from attending and testifying or from producing any books, papers, records, correspondence, or other documents at any hearing on the ground that the testimony or evidence required of him may tend to incriminate him or subject him to a penalty or forfeiture and notwithstanding is directed to give such testimony or produce such evidence, he must none the less comply with such direction, but he shall not thereafter be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he may testify or produce evidence pursuant thereto. No testimony so given or evidence produced shall be received against him upon any criminal action, investigation, or proceeding, provided that no such individual so testifying shall be exempt from prosecution or punishment for any perjury committed by him while so testifying. The testimony or evidence so given or produced shall be admissible against him upon any criminal action, investigation, or proceeding concerning such perjury. No such individual so testifying shall be exempt from the refusal, revocation, or suspension of any license, permission, or authority conferred, or to be conferred, pursuant to the insurance law of this state. Any such individual may execute, acknowledge, and file in the office of the superintendent of insurance a statement expressly waiving such immunity or privilege in respect to any transaction, matter, or thing specified in such statement; thereupon the testimony of such person or such evidence in relation to such transaction, matter, or thing may be received or produced before any judge or justice, court, tribunal, grand jury, or otherwise, and if so received or produced, such individual shall not be entitled to any immunity or privilege on account of any testimony he may so give or evidence so produced.

Effective Date: 01-10-1961

3901.24 Unlawful advertising.

No unauthorized foreign or alien insurer shall make, issue, circulate, or cause to be made, issued, or circulated, to residents of this state any estimate, illustration, circular, pamphlet, or letter, or cause to be made in any newspaper, magazine or other publication or over any radio or television station, any announcement or statement to such residents misrepresenting its financial condition or the terms of any contracts issued or to be issued or the benefits or advantages promised thereby, or the dividends or share of the surplus to be received thereon in violation of sections 3901.19 to 3901.26, inclusive, of the Revised Code, and whenever the superintendent of insurance has reason to believe that any such insurer is engaging in such unlawful advertising, he shall give notice of such fact by registered mail to such insurer and to the insurance supervisory official of the domiciliary state of such insurer. For the purpose of this section, the domiciliary state of an alien insurer shall be deemed to be the state of entry or the state of the principal office in the United States.

Effective Date: 02-21-1967

3901.25 Action by superintendent against insurer.

If after thirty days following the giving of the notice mentioned in section 3901.24 of the Revised Code such insurer has failed to cease making, issuing, or circulating such false misrepresentations or causing the same to be made, issued, or circulated in this state, and if the superintendent of insurance has reason to believe that a proceeding by him in respect to such matters would be to the interest of the public, and that such insurer is issuing or delivering contracts of insurance to residents of this state or collecting premiums on such contracts or doing any of the acts enumerated in section 3901.26 of the Revised Code, he shall take action against such insurer under sections 3901.19 to 3901.26, inclusive, of the Revised Code.

Effective Date: 02-21-1967

3901.26 Acts by insurer which constitute appointment of superintendent as attorney - service of statement.

(A) Any of the following acts in this state, effected by mail or otherwise, by any such unauthorized foreign or alien insurer; (1) the issuance or delivery of contracts or insurance to residents of this state, (2) the solicitation of applications for such contracts, (3) the collection of premiums, membership fees, assessments, or other considerations for such contracts, or (4) any other transaction of insurance business, is equivalent to and constitutes an appointment by such insurer of the superintendent of insurance and his successor or successors in office, to be its true and lawful attorney, upon whom may be served all statements of charges, notices, and lawful process in any proceeding instituted in respect to the misrepresentations set forth in section 3901.24 of the Revised Code under sections 3901.19 to 3901.26, inclusive, of the Revised Code, or in any action, suit, or proceeding for the recovery of any penalty therein provided, and any such act shall be signification of its agreement that such service of statement of charges, notices, or process is of the same legal force and validity as personal service of such statement of charges, notices, or process in this state, upon such insurer.

(B) Service of a statement of charges and notices under sections 3901.19 to 3901.26, inclusive, of the Revised Code, shall be made by any deputy or employee of the department of insurance delivering to and leaving with the superintendent or some person in apparent charge of his office, two copies thereof. Service of process issued by any court in any action, suit, or proceeding to collect any penalty under said sections, shall be made by delivering and leaving with the superintendent, or some person in apparent charge of his office, two copies thereof. The superintendent shall forthwith cause to be mailed by registered mail one of the copies of such statement of charges, notices, or process to the defendant at its last known principal place of business, and shall keep a record of all statements, charges, notices, and processes so served. Such service of statement of charges, notices, or process shall be sufficient provided they shall have been so mailed and the defendant's receipt or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the person mailing such letter showing a compliance herewith are filed with the superintendent in the case of any statement of charges or notices, or with the clerk of the court in which such action is pending in the case of any process, on or before the date the defendant is required to appear or within such further time as may be allowed.

(C) Service of statement of charges, notices, and process in any such proceeding, action, or suit shall in addition to the manner provided in division (B) of this section be valid if served upon any person within this state who on behalf of such insurer is (1) soliciting insurance, or (2) making, issuing, or delivering any contract of insurance, or (3) collecting or receiving in this state any premium for insurance; and a copy of such statement of charges, notices, or process is sent within ten days thereafter by registered mail by or on behalf of the superintendent to the defendant at the last known principal place of business of the defendant, and the defendant's receipt, or the receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter, the name and address of the person to whom the letter is addressed, and the affidavit of the person mailing the same showing a compliance herewith, are filed with the superintendent in the case of any statement of charges or notices, or with the clerk of the court in which such action is pending in the case of any process, on or before the date the defendant is required to appear or within such further time as the court may allow.

(D) No cease or desist order or judgment under this section shall be entered until the expiration of thirty days from the date of the filing of the affidavit of compliance.

(E) Service of process and notice under sections 3901.19 to 3901.26, inclusive, of the Revised Code, shall be in addition to all other methods of service provided by law, and nothing in these sections shall limit to prohibit the right to serve any statement of charges, notices, or process upon any insurer in any other manner permitted by law.

Effective Date: 09-15-1965

3901.27 Adoption of emergency bylaws.

The board of directors of any domestic insurance company may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws for the company, which shall be operative during an emergency, and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes, or of the company's charter, make any provision reasonably necessary for the operation of the company during the period of such emergency. An emergency shall exist when the president of the United States or the congress of the United States proclaims a national emergency because of an attack on the United States by nuclear or atomic weapons, or similar disaster, or when the governor of this state proclaims an emergency for corporations as described in division (U) of section 1701.01 of the Revised Code.

Effective Date: 11-11-1965

3901.28 Provisions effective if no emergency bylaws.

In the event that the board of directors of a domestic insurance company has not adopted emergency bylaws, the following provisions shall become effective upon the occurrence of an emergency as described in section 3901.27 of the Revised Code.

(A) Three directors shall constitute a quorum for the transaction of business at all meetings of the board.

(B) Any vacancy in the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director.

(C) If there are no surviving directors, but at least three vice-presidents of the company survive, the three vice-presidents with the longest term of service shall be the directors and shall possess all of the powers of the previous board of directors and such powers as are granted herein or by subsequently enacted legislation. By majority vote, said emergency board of directors may elect other directors. If there are not at least three surviving vice-presidents, the superintendent of insurance or duly designated person exercising the powers of the superintendent shall appoint three persons as directors who shall possess all of the powers of the previous board of directors and such powers as are granted herein or by subsequently enacted legislation, and these directors may, by majority vote, elect other directors.

Effective Date: 11-11-1965

3901.29 Succession list.

At any time, the board of directors of a domestic insurance company may, by resolution, provide that in the event of an emergency, as described in section 3901.27 of the Revised Code, and in the event of the death or incapacity of the president, the secretary, or the treasurer of the company, such officers or any of them shall be succeeded in the office by the person named or described in a succession list adopted by the board of directors. Such list may be on the basis of named persons or position titles, and shall establish the order of priority and prescribe the conditions under which the powers of the office shall be exercised.

Effective Date: 11-11-1965

3901.30 Emergency business location.

At any time, the board of directors of a domestic insurance company may, by resolution, provide that in the event of an emergency, as described in section 3901.27 of the Revised Code, the home office or principal place of business of the company shall be at such location as is named or described in the resolution. Such resolution may provide for alternate locations and establish an order of preference.

Effective Date: 11-11-1965

3901.31 Filing statements indicating ownership.

(A) Every person who is directly or indirectly the beneficial owner of more than ten per cent of any class of any equity security of a domestic stock insurance company which is not a wholly owned subsidiary of an insurance holding company system or who is a director or officer of such company, shall file with the superintendent of insurance within ten days after the person becomes such beneficial owner, director, or officer, a statement in such form as the superintendent of insurance may prescribe, of the amount of all equity securities of such company of which the person is the beneficial owner, and within ten days after the close of each calendar month thereafter, if there has been a change in such ownership during such month, shall file with the superintendent of insurance a statement, in such form as the superintendent of insurance may prescribe, indicating the person's ownership at the close of the calendar month and such changes in the person's ownership as have occurred during such calendar month.

(B) For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director, or officer by reason of the beneficial owner's, director's, or officer's relationship to such company, any profit realized by the beneficial owner, director, or officer from any purchase and sale, or any sale and purchase, of any equity security of such company within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of such beneficial owner, director, or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the company, or by the owner of any security of the company in the name and in behalf of the company if the company fails or refuses to bring such suit within sixty days after request or fails diligently to prosecute the same thereafter; but no such suit shall be brought more than two years after the date such profit was realized. Division (B) of this section shall not be construed to cover any transaction where such beneficial owner was not such both at the time of purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the superintendent of insurance by rules may exempt as not comprehended within the purpose of division (B) of this section.

(C) No such beneficial owner, director, or officer, directly or indirectly, shall sell any equity security of such company if the person selling the security or the person's principal does not own the security sold, or if owning the security, does not deliver it against such sale within twenty days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated division (C) of this section if the person proves that notwithstanding the exercise of good faith the person was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense.

(D) A domestic insurance company having at least fifty shareholders or any other person soliciting proxies with respect to such domestic insurance company shall not solicit voting proxies from any shareholder or other person except upon a proxy statement and pursuant to a notice of meeting, which statement and notice have been submitted to the superintendent of insurance at least ten days prior to being mailed to the intended recipients. Such proxy statement and notice of meeting shall make such disclosures pertinent to the business to be carried on at the meeting or meetings with respect to which such proxies are solicited and such notices are given as the superintendent by rule requires. The superintendent shall retain such proxy material for examination by any interested party for at least one year.

(E) Division (B) of this section does not apply to any purchase and sale, or sale and purchase, and division (C) of this section does not apply to any sale, of an equity security of a domestic stock insurance company not then or theretofore held in an investment account, by a dealer in the ordinary course of the dealer's business and incident to the establishment or maintenance by the dealer of a primary or secondary market for such security. The superintendent of insurance may, by such rules as the superintendent considers necessary or appropriate in the public interest, describe and define the terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.

(F) Divisions (A), (B), and (C) of this section do not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules as the superintendent of insurance may adopt in order to carry out the purposes of this section.

(G) "Equity security" when used in this section means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any other security which the superintendent of insurance determines to be of similar nature and considers necessary or appropriate, by such rules as the superintendent may prescribe in the public interest or for the protection of investors, to treat as an equity security.

(H) The superintendent of insurance may adopt, amend, and rescind rules, pursuant to Chapter 119. of the Revised Code, which will enable the superintendent to carry out the duties imposed by this section.

(I) This section applies to health insuring corporations in the same manner in which this section applies to domestic stock insurance companies.

Effective Date: 06-04-1997

3901.32 Insurance holding company system definitions.

As used in sections 3901.32 to 3901.37 of the Revised Code:

(A) "Affiliate of" or "affiliated with" a specific person means a person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the person specified.

(B) "Control," including "controlling," "controlled by," and "under common control with," means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, ten per cent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided in division (J) of section 3901.33 of the Revised Code that control does not exist in fact. The superintendent of insurance may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

(D) "Insurer" means any person engaged in the business of insurance, guaranty, or membership, an inter-insurance exchange, a mutual or fraternal benefit society, or a health insuring corporation, excepting any agency, authority, or instrumentality of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.

(E) "Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing acting in concert.

(F) "Subsidiary" of a specified person is an affiliate controlled by such person, directly or indirectly, through one or more intermediaries.

(G) "Voting security" includes any security convertible into or evidencing a right to acquire a voting security.

Effective Date: 06-04-1997

3901.321 Mergers and acquisitions of domestic insurers.

(A) For the purposes of this section:

(1) "Acquiring party" means any person by whom or on whose behalf a merger or other acquisition of control is to be effected.

(2) "Domestic insurer" includes any person controlling a domestic insurer unless the person, as determined by the superintendent of insurance, is either directly or through its affiliates primarily engaged in business other than the business of insurance.

(3) "Person" does not include any securities broker holding, in the usual and customary broker's function, less than twenty per cent of the voting securities of an insurance company or of any person that controls an insurance company.

(B)

(1) Subject to compliance with division (B)(2) of this section, no person other than the issuer shall do any of the following if, as a result, the person would, directly or indirectly, including by means of conversion or the exercise of any right to acquire, be in control of a domestic insurer:

(a) Make a tender offer for any voting security of a domestic insurer;

(b) Make a request or invitation for tenders of any voting security of a domestic insurer;

(d) Seek to acquire or acquire, in the open market or otherwise, any voting security of a domestic insurer;

(e) Enter into an agreement to merge with, or otherwise to acquire control of, a domestic insurer.

(2)

(a) No person shall engage in any transaction described in division (B)(1) of this section, unless all of the following conditions are met:

(i) The person has filed with the superintendent of insurance a statement containing the information required by division (C) of this section;

(ii) The person has sent the statement to the domestic insurer;

(iii) The offer, request, invitation, agreement, or acquisition has been approved by the superintendent in the manner provided in division (F) of this section.

(b) The requirements of division (B)(2)(a) of this section shall be met at the time any offer, request, or invitation is made, or any agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved.

(C) The statement required by division (B)(2) of this section shall be made under oath or affirmation, and shall contain all of the following information:

(1) The name and address of each acquiring party;

(2) If the acquiring party is an individual, the individual's principal occupation and all offices and positions held during the past five years, and any conviction of crimes other than minor traffic violations during the past ten years;

(3) If the acquiring party is not an individual, a report of the nature of its business operations during the past five years or for such lesser period as the acquiring party and any of its predecessors shall have been in existence; an informative description of the business intended to be done by the acquiring party and the acquiring party's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the acquiring party, who perform or will perform functions appropriate to such positions. The list shall include for each individual the information required by division (C)(2) of this section.

(4) The source, nature, and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction in which funds were or are to be obtained for any such purpose, including any pledge of the domestic insurer's stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing such consideration;

(5) Fully audited financial information as to the earnings and financial condition of each acquiring party for its preceding five fiscal years, or for such lesser period as the acquiring party and any of its predecessors shall have been in existence, and similar unaudited information as of a date not earlier than ninety days prior to the filing of the statement;

(6) Any plans or proposals which each acquiring party may have to liquidate such domestic insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management;

(7) The number of shares of any security of such issuer or such controlling person that each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement, or acquisition, and a statement as to the method by which the fairness of the proposal was determined;

(8) The amount of each class of any security of such issuer or such controlling person which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;

(9) A full description of any contracts, arrangements, or understandings with respect to any security of such issuer or such controlling person in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify the persons with whom such contracts, arrangements, or understandings have been made.

(10) A description of the purchase of any security of such issuer or such controlling person during the year preceding the filing of the statement, by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid therefor;

(11) A description of any recommendations to purchase any security of such issuer or such controlling person made during the year preceding the filing of the statement, by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party;

(12) Copies of all tender offers for, requests, or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities of such issuer or such controlling person, and, if distributed, of additional solicitation material relating thereto;

(13) The terms of any agreement, contract, or understanding made with or proposed to be made with any broker or dealer as to solicitation of securities of such issuer or such controlling person for tender, and the amount of any fees, commissions, or other compensation to be paid to brokers or dealers with regard thereto;

(14) With respect to proposed affiliations between depository institutions or any affiliate thereof, within the meaning of Title I, Section104(c) of the "Gramm-Leach-Bliley Act," Pub. L. No. 106-102 Pub. L. No. 106-102 , 113 Stat. 1338 (1999), and a domestic insurer, the proposed effective date of the acquisition or change of control;

(15) Such additional information as the superintendent may by rule prescribe as necessary or appropriate for the protection of policyholders of the domestic insurer or in the public interest.

(D)

(1) If the person required to file the statement required by division (B)(2) of this section is a partnership, limited partnership, syndicate, or other group, the superintendent may require that the information required by division (C) of this section be furnished with respect to each partner of such partnership or limited partnership, each member of such syndicate or group, and each person that controls such partner or member. If any such partner, member, or person is a corporation, or the person required to file the statement is a corporation, the superintendent may require that the information required by division (C) of this section be furnished with respect to the corporation, each officer and director of the corporation, and each person that is directly or indirectly the beneficial owner of more than ten per cent of the outstanding voting securities of the corporation.

(2) If any material change occurs in the facts set forth in the statement required by division (B)(2) of this section, an amendment setting forth such change, together with copies of all documents and other material relevant to the change, shall be filed with the superintendent by the person subject to division (B)(2) of this section and sent to the domestic insurer within two business days after such person learns of the occurrence of the material change.

(E) If any offer, request, invitation, agreement, or acquisition described in division (B)(1) of this section is proposed to be made by means of a registration statement under the "Securities Act of 1933," 48 Stat. 74, 15 U.S.C.A. 78a, or in circumstances requiring the disclosure of similar information under the "Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C.A. 78a, or under a state law requiring similar registration or disclosure, the person required to file the statement required by division (B)(2) of this section may use such documents in furnishing the information required by that statement.

(F)

(1) The superintendent shall approve any merger or other acquisition of control described in division (B)(1) of this section unless, after a public hearing, the superintendent finds that any of the following apply:

(a) After the change of control, the domestic insurer would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;

(b) The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly;

(c) The financial condition of any acquiring party is such as might jeopardize the financial stability of the domestic insurer, or prejudice the interests of its policyholders;

(d) The plans or proposals that the acquiring party has to liquidate the domestic insurer, sell its assets, or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the domestic insurer and not in the public interest;

(e) The competence, experience, and integrity of those persons that would control the operation of the domestic insurer are such that it would not be in the interest of policyholders of the domestic insurer and of the public to permit the merger or other acquisition of control;

(f) The acquisition is likely to be hazardous or prejudicial to the insurance-buying public.

(2)

(a) Chapter 119. of the Revised Code, except for section 119.09 of the Revised Code, applies to any hearing held under division (F)(1) of this section, including the notice of the hearing, the conduct of the hearing, the orders issued pursuant to it, the review of the orders, and all other matters relating to the holding of the hearing, but only to the extent that Chapter 119. of the Revised Code is not inconsistent or in conflict with this section.

(b) The notice of a hearing required under this division shall be transmitted by personal service, certified mail, e-mail, or any other method designed to ensure and confirm receipt of the notice, to the persons and addresses designated to receive notices and correspondence in the information statement filed under division (B)(2) of this section. Confirmation of receipt of the notice, including electronic "Read Receipt" confirmation, shall constitute evidence of compliance with the requirement of this section. The notice of hearing shall include the reasons for the proposed action and a statement informing the acquiring party that the party is entitled to a hearing. The notice also shall inform the acquiring party that at the hearing the acquiring party may appear in person, by attorney, or by such other representative as is permitted to practice before the superintendent, or that the acquiring party may present its position, arguments, or contentions in writing, and that at the hearing the acquiring party may present evidence and examine witnesses appearing for and against the acquiring party. A copy of the notice also shall be transmitted to attorneys or other representatives of record representing the acquiring party.

(c) The hearing shall be held at the offices of the superintendent within ten calendar days, but not earlier than seven calendar days, of the date of transmission of the notice of hearing by any means, unless it is postponed or continued; but in no event shall the hearing be held unless notice is received at least three days prior to the hearing. The superintendent may postpone or continue the hearing upon receipt of a written request by an acquiring party, or upon the superintendent's motion, provided, however, a hearing in connection with a proposed change of control involving a depository institution or any affiliate thereof, within the meaning of Title I, Section104(c) of the "Gramm-Leach-Bliley Act," Pub. L. No. 106-102 Pub. L. No. 106-102 , 113 Stat. 1338 (1999), and a domestic insurer, may be postponed or continued only upon the request of an acquiring party, or upon the superintendent's motion when the acquiring party agrees in writing to extend the sixty-day period provided for in section 104(c) of the "Gramm-Leach-Bliley Act," by a number of days equal to the number of days of such postponement or continuance.

(d) For the purpose of conducting any hearing held under this section, the superintendent may require the attendance of such witnesses and the production of such books, records, and papers as the superintendent desires, and may take the depositions of witnesses residing within or without the state in the same manner as is prescribed by law for the taking of depositions in civil actions in the court of common pleas, and for that purpose the superintendent may, and upon the request of an acquiring party shall, issue a subpoena for any witnesses or a subpoena duces tecum to compel the production of any books, records, or papers, directed to the sheriff of the county where such witness resides or is found, which shall be served and returned in the same manner as a subpoena in a criminal case is served and returned. The fees of the sheriff shall be the same as that allowed in the court of common pleas in criminal cases. Witnesses shall be paid the fees and mileage provided for under section 119.094 of the Revised Code. Fees and mileage shall be paid from the fund in the state treasury for the use of the superintendent in the same manner as other expenses of the superintendent are paid. In any case of disobedience or neglect of any subpoena served on any person or the refusal of any witness to testify in any matter regarding which the witness may lawfully be interrogated, the court of common pleas of any county where such disobedience, neglect, or refusal occurs or any judge thereof, on application by the superintendent, shall compel obedience by attachment proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify therein.

In any hearing held under this section, a record of the testimony, as provided by stenographic means or by use of audio electronic recording devices, as determined by the superintendent, and other evidence submitted shall be taken at the expense of the superintendent. The record shall include all of the testimony and other evidence, and rulings on the admissibility thereof, presented at the hearing.

The superintendent shall pass upon the admissibility of evidence, but a party to the proceedings may at that time object to the rulings of the superintendent, and if the superintendent refuses to admit evidence, the party offering the evidence shall proffer the evidence. The proffer shall be made a part of the record of the hearing.

In any hearing held under this section, the superintendent may call any person to testify under oath as upon cross-examination. The superintendent, or any one delegated by the superintendent to conduct a hearing, may administer oaths or affirmations.

In any hearing under this section, the superintendent may appoint a hearing officer to conduct the hearing; the hearing officer has the same powers and authority in conducting the hearing as is granted to the superintendent. The hearing officer shall have been admitted to the practice of law in the state and be possessed of any additional qualifications as the superintendent requires. The hearing officer shall submit to the superintendent a written report setting forth the hearing officer's finding of fact and conclusions of law and a recommendation of the action to be taken by the superintendent. A copy of the written report and recommendation shall, within seven days of the date of filing thereof, be served upon the acquiring party or the acquiring party's attorney or other representative of record, by personal service, certified mail, e-mail, or any other method designed to ensure and confirm receipt of the report. The acquiring party may, within three days of receipt of the copy of the written report and recommendation, file with the superintendent written objections to the report and recommendation, which objections the superintendent shall consider before approving, modifying, or disapproving the recommendation. The superintendent may grant extensions of time to the acquiring party within which to file such objections. No recommendation of the hearing officer shall be approved, modified, or disapproved by the superintendent until after three days following the service of the report and recommendation as provided in this section. The superintendent may order additional testimony to be taken or permit the introduction of further documentary evidence. The superintendent may approve, modify, or disapprove the recommendation of the hearing officer, and the order of the superintendent based on the report, recommendation, transcript of testimony, and evidence, or the objections of the acquiring party, and additional testimony and evidence shall have the same effect as if the hearing had been conducted by the superintendent. No such recommendation is final until confirmed and approved by the superintendent as indicated by the order entered in the record of proceedings, and if the superintendent modifies or disapproves the recommendations of the hearing officer, the reasons for the modification or disapproval shall be included in the record of proceedings.

After the order is entered, the superintendent shall transmit in the manner and by any of the methods set forth in division (F)(2)(b) of this section a certified copy of the order and a statement of the time and method by which an appeal may be perfected. A copy of the order shall be mailed to the attorneys or other representatives of record representing the acquiring party.

(e) An order of disapproval issued by the superintendent may be appealed to the court of common pleas of Franklin county by filing a notice of appeal with the superintendent and a copy of the notice of appeal with the court, within fifteen calendar days after the transmittal of the copy of the order of disapproval. The notice of appeal shall set forth the order appealed from and the grounds for appeal, in accordance with section 119.12 of the Revised Code.

(3) The superintendent may retain at the acquiring party's expense any attorneys, actuaries, accountants, and other experts not otherwise a part of the superintendent's staff as may be reasonably necessary to assist the superintendent in reviewing the proposed acquisition of control.

(G) This section does not apply to either of the following:

(1) Any transaction that is subject to section 3907.09, 3907.10, 3907.11, or 3921.14, or sections 3925.27 to 3925.31, 3941.35 to 3941.46, or section 3953.19 of the Revised Code;

(2) Any offer, request, invitation, agreement, or acquisition that the superintendent by order exempts from this section on either of the following bases:

(a) It has not been made or entered into for the purpose and does not have the effect of changing or influencing the control of a domestic insurer;

(b) It is not otherwise comprehended within the purposes of this section.

(H) Nothing in this section or in any other section of Title XXXIX of the Revised Code shall be construed to impair the authority of the attorney general to investigate or prosecute actions under any state or federal antitrust law with respect to any merger or other acquisition involving domestic insurers.

(I) In connection with a proposed change of control involving a depository institution or any affiliate thereof, within the meaning of Title I, Section104(c) of the "Gramm-Leach-Bliley Act," Pub. L. No. 106-102 Pub. L. No. 106-102 , 113 Stat. 1338 (1999), and a domestic insurer, not later than sixty days after the date of the notification of the proposed change in control submitted pursuant to division (B)(2) of this section, the superintendent shall make any determination that the person acquiring control of the insurer shall maintain or restore the capital of the insurer to the level required by the laws and regulations of this state.

Effective Date: 08-06-2002; 2008 HB525 07-01-2009

3901.322 Procedure for violations.

(A) Whenever it appears to the superintendent of insurance that any person has committed or is about to commit a violation of section 3901.321 of the Revised Code or of any rule or order issued by the superintendent under that section, the superintendent may apply to the court of common pleas of the county in which the principal office of the domestic insurer is located, or the court of common pleas of Franklin county if the domestic insurer has no such office in this state, for either or both of the following:

(1) An order enjoining the person from violating or continuing to violate section 3901.321 of the Revised Code or any such rule or order;

(2) Other equitable relief as the nature of the case and the interests of the public or the domestic insurer's policyholders, creditors, and shareholders may require.

(B)

(1) No security that is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of section 3901.321 of the Revised Code or of any rule or order issued by the superintendent under that section may be voted at any shareholder's meeting, or counted for quorum purposes. Any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though such securities were not issued and outstanding. No action taken at any such meeting shall be invalidated by the voting of such securities, unless the action would materially affect control of the domestic insurer, or unless the courts of this state have so ordered.

(2) If a domestic insurer or the superintendent has reason to believe that any security of the domestic insurer has been or is about to be acquired in contravention of section 3901.321 of the Revised Code or of any rule or order issued by the superintendent under that section, the domestic insurer or the superintendent may apply to the court of common pleas of the county in which the domestic insurer has its principal place of business, or the court of common pleas of Franklin county if the domestic insurer's principal place of business is not in this state, for any or all of the following:

(a) An order enjoining any offer, request, invitation, agreement, or acquisition made in contravention of section 3901.321 of the Revised Code or any rule or order issued by the superintendent under that section;

(b) An order enjoining the voting of any security so acquired;

(d) Such other equitable relief as the nature of the case and the interests of the public or the domestic insurer's policyholders, creditors, and shareholders may require.

(C) In any case where a person has acquired or is proposing to acquire any voting securities in violation of section 3901.321 of the Revised Code or any rule or order issued by the superintendent under that section, the court of common pleas of Franklin county or the court of common pleas of the county in which the domestic insurer has its principal place of business may, upon the application of the domestic insurer or the superintendent and such notice as the court finds appropriate, seize or sequester any voting securities of the domestic insurer owned directly or indirectly by such person, and issue an order with respect thereto as may be appropriate to effectuate the purposes of section 3901.321 of the Revised Code.

(D) Notwithstanding any other provisions of law, for the purposes of sections 3901.321 to 3901.323 of the Revised Code, the situs of the ownership of the securities of domestic insurers is deemed to be in this state.

Effective Date: 03-17-1989

3901.323 Jurisdiction.

(A) The courts of this state have personal jurisdiction over both of the following:

(1) Every person that is not a resident or domiciliary of, nor authorized to do business in, this state, and that files a statement with the superintendent of insurance under section 3901.321 of the Revised Code;

(2) All actions involving such person arising out of violations of section 3901.321 of the Revised Code.

(B) Each person described in division (A) of this section is deemed to have performed acts equivalent to and constituting an appointment of the superintendent to be his attorney upon whom may be served all process in any action, suit, or proceeding arising out of violations of section 3901.321 of the Revised Code. Copies of all such process shall be served on the superintendent and transmitted by certified mail by the superintendent to such person at his last known address.

Effective Date: 03-17-1989

3901.33 Registration.

(A) Every insurer that is authorized to do business in this state and that is a member of an insurance holding company system shall register with the superintendent of insurance, except a foreign insurer subject to disclosure requirements and standards adopted by statute or regulation in the jurisdiction of its domicile that are substantially similar to those contained in this section and section 3901.341 of the Revised Code. Every insurer that is subject to registration under this section shall register initially not later than December 31, 1971, or within thirty days after it becomes subject to registration, whichever is later, unless the superintendent for good cause shown extends the time for registration, and then within the extended time, and every such insurer shall register annually after its initial registration. The superintendent may require any authorized insurer that is a member of a holding company system that is not subject to registration under this section to furnish a copy of the registration statement or other information filed by the insurance company with the insurance regulatory authority of domiciliary jurisdiction.

(B) Every insurer subject to registration shall file a registration statement on a form provided by the superintendent, which shall contain current information about:

(1) The capital structure, general financial condition, ownership, and management of the insurer and any person controlling the insurer;

(2) The identity of every member of the insurance holding company system;

(3) The following agreements in force, relationships subsisting, and transactions currently outstanding between the insurer and its affiliates:

(a) Loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates;

(b) Purchases, sales, or exchanges of assets;

(d) Guarantees or undertakings for the benefit of an affiliate that result in an actual contingent exposure of the insurer's assets to liability, other than insurance contracts entered into in the ordinary course of the insurer's business;

(e) All management and service contracts and all cost-sharing arrangements;

(f) Reinsurance agreements;

(g) Dividends and other distributions to shareholders;

(h) Consolidated tax allocation agreements.

(4) Any pledge of the insurer's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system;

(5) Other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the superintendent.

(C) Each registration statement filed pursuant to division (B) of this section shall summarize the information that has changed from the prior registration statement filed pursuant to that division.

(D) No information need be disclosed on the registration statement filed pursuant to division (B) of this section if the information is not material for the purposes of this section. Unless the superintendent by rule, regulation, or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, or investments involving one-half of one per cent or less of an insurer's admitted assets as of the thirty-first day of December next preceding shall not be deemed material for the purposes of this section.

(E) Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions on amendment forms provided by the superintendent within fifteen days after the end of the month in which it learns of each change or addition.

(F) The superintendent shall terminate the registration of any insurer that demonstrates that it no longer is a member of an insurance holding company system.

(G) The superintendent may require or allow two or more affiliated insurers subject to registration under this section to file a consolidated registration statement or consolidated reports amending their consolidated registration statement or their individual registration statements.

(H) The superintendent may allow an insurer that is authorized to do business in this state and that is part of an insurance holding company system to register on behalf of any affiliated insurer that is required to register under division (A) of this section and to file all information and material required to be filed under this section.

(I) This section does not apply to any insurer, information, or transaction if and to the extent that the superintendent by rule, regulation, or order exempts it from this section.

(J) Any person may file with the superintendent a disclaimer of affiliation with any authorized insurer or such a disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the person and the insurer as well as the basis for disclaiming the affiliation. After a disclaimer has been filed, the insurer shall be relieved of any duty to register or report under this section which may arise out of the insurer's relationship with the person unless and until the superintendent disallows the disclaimer. The superintendent shall disallow such a disclaimer only in the manner provided in Chapter 119. of the Revised Code.

(K) The failure to file any registration statement or any amendment thereto required by this section within the time specified for the filing is a violation of this section.

Effective Date: 03-03-1996

3901.34 Material transactions standards.

(A) Material transactions by registered insurers with their affiliates shall be subject to the following standards:

(1) The terms shall be fair and reasonable.

(2) Charges or fees for services performed shall be reasonable.

(3) Expenses incurred and payment received shall be allocated to the insurer in conformity with customary insurance accounting practices that are consistently applied.

(4) The books, accounts, and records of each party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transactions.

(5) The insurer's surplus as regards policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.

(B) For the purposes of this section, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs, the following factors, among others, may be considered:

(1) The size of the insurer as measured by its assets, capital, surplus, reserves, premium writings, insurance in force, and other appropriate criteria;

(2) The extent to which the insurer's business is diversified among the several lines of insurance;

(3) The number and size of risks insured in each line of business;

(4) The extent of the geographical dispersion of the insurer's insured risks;

(5) The nature and extent of the insurer's reinsurance program;

(6) The quality, diversification, and liquidity of the insurer's investment portfolio;

(7) The recent past and projected future trend in the size of the insurer's surplus as regards policyholders;

(8) The adequacy of the insurer's reserves;

(9) The quality and liquidity of investments in subsidiaries. The superintendent may discount any such investment or treat any investment as a nonadmitted asset for purposes of determining the adequacy of surplus as regards policyholders whenever the investment so warrants.

(10) The quality of the insurer's earnings and the extent to which the reported earnings include extraordinary items;

(11) The surplus as regards policyholders maintained by other comparable insurers in respect of the factors enumerated in this division.

(C) No insurer subject to registration under section 3901.33 of the Revised Code shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders and the declaration of any such dividend or distribution shall be conditional and shall confer no rights upon shareholders until thirty days after the superintendent has received notice of the declaration thereof and has not within the thirty-day period disapproved the dividend or distribution, or the superintendent has approved the dividend or distribution within the thirty-day period.

Prior to paying any dividend or distribution, the insurer shall notify the superintendent on a form provided by the superintendent for informational purposes within five business days following its declaration of any dividend or distribution and at least ten calendar days prior to payment of such dividend or distribution, such ten-calendar-day period to be measured from the date of the superintendent's receipt of the notice.

For the purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value, together with that of other dividends or distributions made within the preceding twelve months, exceeds the greater of ten per cent of the insurer's surplus as regards policyholders as of the thirty-first day of December next preceding, or the net income of the insurer for the twelve-month period ending the thirty-first day of December next preceding, but shall not include pro rata distributions of any class of the insurer's own securities.

Any dividend or distribution paid from other than earned surplus shall be considered an extraordinary dividend or extraordinary distribution. For the purposes of this section, "earned surplus" means an amount equal to an insurer's unassigned funds as set forth in its most recent statutory financial statement submitted to the superintendent, including net unrealized capital gains and losses or revaluation of assets.

Effective Date: 03-03-1996

3901.341 Prior review of proposed transactions.

(A) No insurer subject to registration under section 3901.33 of the Revised Code shall enter into any of the following transactions with any person in its insurance holding company system until thirty days after the superintendent of insurance has received, for his review, written notice of the insurer's intention to enter into the transaction and if, during that period, the superintendent has not disapproved the proposed transaction:

(1) Any sale, purchase, exchange of assets, loan, extension of credit, guarantee, or investment, if the transaction equals or exceeds, with respect to insurers other than life insurers, the lesser of three per cent of the insurer's admitted assets as of the thirty-first day of December next preceding or twenty-five per cent of the insurer's surplus as regards policyholders as of the thirty-first day of December next preceding or, with respect to life insurers, three per cent of the insurer's admitted assets as of the thirty-first day of December next preceding;

(2) Any loan or extension of credit to any person that is not an affiliate of the insurer, if both of the following apply:

(a) The loan or extension of credit equals or exceeds, with respect to insurers other than life insurers, the lesser of three per cent of the insurer's admitted assets as of the thirty-first day of December next preceding or twenty-five per cent of the insurer's surplus as regards policyholders as of the thirty-first day of December next preceding or, with respect to life insurers, three per cent of the insurer's admitted assets as of the thirty-first day of December next preceding.

(b) The insurer makes the loan or extends the credit with an agreement or understanding that the proceeds of the transaction, in whole or in substantial part, are to be used to make loans or extend credit to, to purchase assets of, or to make investments in, any affiliate of the insurer.

(3) Reinsurance agreements or modifications of such agreements in which the reinsurance premium or the change in the insurer's liabilities equals or exceeds five per cent of the insurer's surplus as regards policyholders as of the thirty-first day of December next preceding. Division (A)(3) of this section also applies to reinsurance agreements that may require as consideration the transfer of assets from an insurer to a nonaffiliate, if the insurer and nonaffiliate have an agreement or understanding that any portion of the assets will be transferred to one or more affiliates of the insurer.

(4) All management agreements, service contracts, and cost-sharing arrangements;

(5) Any other material transaction that the superintendent, pursuant to rules adopted in accordance with Chapter 119. of the Revised Code, determines may render the insurer's surplus as regards policyholders unreasonable in relation to the insurer's outstanding liabilities and inadequate to its financial needs.

(B) In reviewing transactions under division (A) of this section, the superintendent shall consider whether the terms of the transaction are fair and reasonable and whether the transaction may adversely affect the interests of policyholders.

(C) Any transaction or agreement described in division (A) of this section that is not disapproved by the superintendent in accordance with that division is effective as of the effective date set forth in the notice required under this section.

(D) The superintendent, pursuant to rules adopted in accordance with Chapter 119. of the Revised Code, may designate certain types of transactions that need not be submitted for review under division (A) of this section, if those transactions would not have a significant impact on the financial condition of an insurer.

(E) A domestic insurer shall not enter into any transaction described in division (A) of this section with members of its insurance holding company system if the transaction is part of a plan or series of similar transactions and if the purpose of entering into the separate transactions is to avoid the review required under division (A) of this section that would otherwise occur. If the superintendent determines that the insurer, within a twelve-month period, entered into those separate transactions for that purpose, he may take any action authorized by section 3901.37 of the Revised Code.

(F) A domestic insurer shall give written notice to the superintendent, within thirty days after making an investment, if the investment is made in a corporation and the total investment in the corporation by the insurance holding company system exceeds ten per cent of the voting securities of the corporation.

(G) Nothing in division (A) of this section shall be construed to authorize or permit any transaction that would otherwise be contrary to law.

Effective Date: 08-08-1991

3901.35 Requiring production of records.

(A) In addition to the powers which the superintendent has under sections 3901.01 to 3901.31, inclusive, of the Revised Code, relating to the examination of insurers, the superintendent of insurance, subject to sections 119.01 to 119.13, inclusive, of the Revised Code, shall also have the power to order any insurer registered under section 3901.33 of the Revised Code to produce for examination such records, books, or other information papers in the possession of the insurer and its affiliates as may be necessary to ascertain the financial condition or legality of conduct of such insurer, but only if the superintendent finds that an examination of such insurer pursuant to sections 3901.01 to 3901.31, inclusive, of the Revised Code, would be inadequate or the interests of the policyholders of such insurer may be adversely affected. In the event such insurer fails to comply with such order, the superintendent shall have the power to examine such affiliates to obtain such information.

(B) The superintendent may retain at the registered insurer's expense such attorneys, actuaries, accountants, and other experts not otherwise a part of the superintendent's staff as shall be reasonably necessary to assist in the conduct of the examination under division (A) of this section. Any persons so retained shall be under the direction and control of the superintendent and shall act in a purely advisory capacity.

(C) Each registered insurer producing for examination records, books, and papers pursuant to division (A) of this section shall be liable for and shall pay the expense of such examination in accordance with section 3901.07 of the Revised Code.

Effective Date: 09-21-1971

3901.36 Confidential and privileged treatment of documents and information - exceptions.

(A) All information, documents, and copies thereof obtained by or disclosed to the superintendent of insurance or any other person in the course of an examination or investigation made pursuant to section 3901.35 of the Revised Code and all information reported pursuant to section 3901.33 of the Revised Code shall be given confidential and privileged treatment and shall not be subject to subpoena or be made public by the superintendent or any other person.

(B) Notwithstanding division (A) of this section, the superintendent may do any of the following:

(1) Disclose documents and information that are the subject of this section upon obtaining prior written consent from the insurer to which the documents and information pertain;

(2) Disclose documents and information that are the subject of this section in such a manner as the superintendent considers appropriate, after giving the insurer and those affiliates that are the subject of the documents and information notice and an opportunity to be heard in accordance with Chapter 119. of the Revised Code, if the superintendent determines that the interests of policyholders, shareholders, or the public will be served by the disclosure;

(3) Share documents and information that are the subject of this section with the chief deputy rehabilitator, the chief deputy liquidator, other deputy rehabilitators and liquidators, and any other person employed by, or acting on behalf of, the superintendent pursuant to Chapter 3901. or 3903. of the Revised Code, with other local, state, federal, and international regulatory and law enforcement agencies, with local, state, and federal prosecutors, and with the national association of insurance commissioners and its affiliates and subsidiaries, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged document or information and has authority to do so;

(4) Disclose documents and information that are the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent or the state, resulting from the exercise of the superintendent's official duties.

(C) Notwithstanding divisions (A) and (B) of this section, the superintendent may authorize the national association of insurance commissioners and its affiliates and subsidiaries by agreement to share confidential or privileged documents or information received pursuant to division (B)(3) of this section with local, state, federal, and international regulatory and law enforcement agencies and with local, state, and federal prosecutors, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged document or information and has authority to do so.

(D) Notwithstanding divisions (A) and (B) of this section, the chief deputy rehabilitator, the chief deputy liquidator, and other deputy rehabilitators and liquidators may disclose documents and information that are the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent, the rehabilitator, the liquidator, or the state resulting from the exercise of the superintendent's official duties in any capacity.

(E) Nothing in this section shall prohibit the superintendent from receiving documents and information in accordance with section 3901.045 of the Revised Code.

(F) The superintendent may enter into agreements governing the sharing and use of documents and information consistent with the requirements of this section.

(G)

(1) No waiver of any applicable privilege or claim of confidentiality in the documents and information described in this section shall occur as a result of sharing or receiving documents and information as authorized in divisions (B)(3), (C), and (E) of this section.

(2) The disclosure of a document or information in connection with a regulatory or legal action pursuant to divisions (B)(4) and (D) of this section does not prohibit an insurer or any other person from taking steps to limit the dissemination of the document or information to persons not involved in or the subject of the regulatory or legal action on the basis of any recognized privilege arising under any other section of the Revised Code or the common law.

Effective Date: 06-18-2002

3901.37 Suspension, revocation or refusal to renew license - civil forfeiture.

(A) Whenever it appears to the superintendent of insurance that any person has committed a violation of section 3901.33, 3901.34, 3901.341, or 3901.35 of the Revised Code, which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the superintendent may, subject to Chapter 119. of the Revised Code, suspend, revoke, or refuse to renew such insurer's license or authority to do business in this state for such period as he finds is required for the protection of policyholders or the public.

(B) Whenever an extraordinary dividend is paid in knowing violation of division (C) of section 3901.34 of the Revised Code, the superintendent may, subject to Chapter 119. of the Revised Code, cause the insurer to pay a civil forfeiture of not more than two hundred fifty thousand dollars, to be paid to the state treasury to the credit of the department of insurance operating fund. Each payment of an extraordinary dividend made in violation of division (C) of section 3901.34 of the Revised Code may be considered a separate offense.

Effective Date: 10-01-1993

3901.38 Prompt payments to health care providers definitions.

As used in this section and sections 3901.381 to 3901.3814 of the Revised Code:

(A) "Beneficiary" means any policyholder, subscriber, member, employee, or other person who is eligible for benefits under a benefits contract.

(B) "Benefits contract" means a sickness and accident insurance policy providing hospital, surgical, or medical expense coverage, or a health insuring corporation contract or other policy or agreement under which a third-party payer agrees to reimburse for covered health care or dental services rendered to beneficiaries, up to the limits and exclusions contained in the benefits contract.

(D) "Provider" means a hospital, nursing home, physician, podiatrist, dentist, pharmacist, chiropractor, or other health care provider entitled to reimbursement by a third-party payer for services rendered to a beneficiary under a benefits contract.

(E) "Reimburse" means indemnify, make payment, or otherwise accept responsibility for payment for health care services rendered to a beneficiary, or arrange for the provision of health care services to a beneficiary.

(F) "Third-party payer" means any of the following:

(1) An insurance company;

(2) A health insuring corporation;

(3) A labor organization;

(4) An employer;

(5) An intermediary organization, as defined in section 1751.01 of the Revised Code, that is not a health delivery network contracting solely with self-insured employers;

(6) An administrator subject to sections 3959.01 to 3959.16 of the Revised Code;

(7) A health delivery network, as defined in section 1751.01 of the Revised Code;

(8) Any other person that is obligated pursuant to a benefits contract to reimburse for covered health care services rendered to beneficiaries under such contract.

Effective Date: 07-24-2002

3901.381 Third-party payers processing claims for payment for health care services.

(A) Except as provided in sections 3901.382, 3901.383, 3901.384, and 3901.386 of the Revised Code, a third-party payer shall process a claim for payment for health care services rendered by a provider to a beneficiary in accordance with this section.

(B)

(1) Unless division (B)(2) or (3) of this section applies, when a third-party payer receives from a provider or beneficiary a claim on the standard claim form prescribed in rules adopted by the superintendent of insurance under section 3902.22 of the Revised Code, the third-party payer shall pay or deny the claim not later than thirty days after receipt of the claim. When a third-party payer denies a claim, the third-party payer shall notify the provider and the beneficiary. The notice shall state, with specificity, why the third-party payer denied the claim.

(2)

(a) Unless division (B)(3) of this section applies, when a provider or beneficiary has used the standard claim form, but the third-party payer determines that reasonable supporting documentation is needed to establish the third-party payer's responsibility to make payment, the third-party payer shall pay or deny the claim not later than forty-five days after receipt of the claim. Supporting documentation includes the verification of employer and beneficiary coverage under a benefits contract, confirmation of premium payment, medical information regarding the beneficiary and the services provided, information on the responsibility of another third-party payer to make payment or confirmation of the amount of payment by another third-party payer, and information that is needed to correct material deficiencies in the claim related to a diagnosis or treatment or the provider's identification.

Not later than thirty days after receipt of the claim, the third-party payer shall notify all relevant external sources that the supporting documentation is needed. All such notices shall state, with specificity, the supporting documentation needed. If the notice was not provided in writing, the provider, beneficiary, or third-party payer may request the third-party payer to provide the notice in writing, and the third-party payer shall then provide the notice in writing. If any of the supporting documentation is under the control of the beneficiary, the beneficiary shall provide the supporting documentation to the third-party payer.

The number of days that elapse between the third-party payer's last request for supporting documentation within the thirty-day period and the third-party payer's receipt of all of the supporting documentation that was requested shall not be counted for purposes of determining the third-party payer's compliance with the time period of not more than forty-five days for payment or denial of a claim. Except as provided in division (B)(2)(b) of this section, if the third-party payer requests additional supporting documentation after receiving the initially requested documentation, the number of days that elapse between making the request and receiving the additional supporting documentation shall be counted for purposes of determining the third-party payer's compliance with the time period of not more than forty-five days.

(b) If a third-party payer determines, after receiving initially requested documentation, that it needs additional supporting documentation pertaining to a beneficiary's preexisting condition, which condition was unknown to the third-party payer and about which it was reasonable for the third-party payer to have no knowledge at the time of its initial request for documentation, and the third-party payer subsequently requests this additional supporting documentation, the number of days that elapse between making the request and receiving the additional supporting documentation shall not be counted for purposes of determining the third-party payer's compliance with the time period of not more than forty-five days.

(c) When a third-party payer denies a claim, the third-party payer shall notify the provider and the beneficiary. The notice shall state, with specificity, why the third-party payer denied the claim.

(d) If a third-party payer determines that supporting documentation related to medical information is routinely necessary to process a claim for payment of a particular health care service, the third-party payer shall establish a description of the supporting documentation that is routinely necessary and make the description available to providers in a readily accessible format.

Third-party payers and providers shall, in connection with a claim, use the most current CPT code in effect, as published by the American medical association, the most current ICD-9 code in effect, as published by the United States department of health and human services, the most current CDT code in effect, as published by the American dental association, or the most current HCPCS code in effect, as published by the United States health care financing administration.

(3) When a provider or beneficiary submits a claim by using the standard claim form prescribed in the superintendent's rules, but the information provided in the claim is materially deficient, the third-party payer shall notify the provider or beneficiary not later than fifteen days after receipt of the claim. The notice shall state, with specificity, the information needed to correct all material deficiencies. Once the material deficiencies are corrected, the third-party payer shall proceed in accordance with division (B)(1) or (2) of this section.

It is not a violation of the notification time period of not more than fifteen days if a third-party payer fails to notify a provider or beneficiary of material deficiencies in the claim related to a diagnosis or treatment or the provider's identification. A third-party payer may request the information necessary to correct these deficiencies after the end of the notification time period. Requests for such information shall be made as requests for supporting documentation under division (B)(2) of this section, and payment or denial of the claim is subject to the time periods specified in that division.

(C) For purposes of this section, if a dispute exists between a provider and a third-party payer as to the day a claim form was received by the third-party payer, both of the following apply:

(1) If the provider or a person acting on behalf of the provider submits a claim directly to a third-party payer by mail and retains a record of the day the claim was mailed, there exists a rebuttable presumption that the claim was received by the third-party payer on the fifth business day after the day the claim was mailed, unless it can be proven otherwise.

(2) If the provider or a person acting on behalf of the provider submits a claim directly to a third-party payer electronically, there exists a rebuttable presumption that the claim was received by the third-party payer twenty-four hours after the claim was submitted, unless it can be proven otherwise.

(D) Nothing in this section requires a third-party payer to provide more than one notice to an employer whose premium for coverage of employees under a benefits contract has not been received by the third-party payer.

(E) Compliance with the provisions of division (B)(3) of this section shall be determined separately from compliance with the provisions of divisions (B)(1) and (2) of this section.

(F) A third party payer shall transmit electronically any payment with respect to claims that the third party payer receives electronically and pays to a contracted provider under this section and under sections 3901.383, 3901.384, and 3901.386 of the Revised Code. A provider shall not refuse to accept a payment made under this section or sections 3901.383, 3901.384, and 3901.386 of the Revised Code on the basis that the payment was transmitted electronically.

Amended by 128th General AssemblyFile No.9,HB 1, §101.01, eff. 10/16/2010.

Effective Date: 07-24-2002

3901.382 Electronic submission of claims.

Beginning six months after the date specified in section 262 of the "Health Insurance Portability and Accountability Act of 1996," 110 Stat. 2027, 42 U.S.C.A. 1320d-4, on which a third-party payer is initially required to comply with a standard or implementation specification for the electronic exchange of health information, as adopted or established by the United States secretary of health and human services pursuant to that act, sections 3901.381, 3901.384, 3901.385, 3901.389, 3901.3810, 3901.3811, 3901.3812, and 3901.3813 of the Revised Code apply to a claim submitted to a third-party payer for payment for health care services only if the claim is submitted electronically. A provider and third-party payer may enter into a contractual arrangement under which the third-party payer agrees to process claims that are not submitted electronically because of the financial hardship that electronic submission of claims would create for the provider or any other extenuating circumstance.

Effective Date: 07-24-2002

3901.383 Contractual agreements for payments by third-party payers.

(A) A provider and a third-party payer may do either of the following:

(1) Enter into a contractual agreement under which time periods shorter than those set forth in section 3901.381 of the Revised Code are applicable to the third-party payer in paying a claim for any amount due for health care services rendered by the provider;

(2) Enter into a contractual agreement under which the timing of payments by the third-party payer is not directly related to the receipt of a claim form. The contractual arrangement may include periodic interim payment arrangements, capitation payment arrangements, or other periodic payment arrangements acceptable to the provider and the third-party payer. Under a capitation payment arrangement, the third-party payer shall begin paying the capitated amounts to the beneficiary's primary care provider not later than sixty days after the date the beneficiary selects or is assigned to the provider. Under any other contractual periodic payment arrangement, the contractual agreement shall state, with specificity, the timing of payments by the third-party payer.

(B) Regardless of whether a third-party payer is exempted under division (D) of section 3901.3814 from sections 3901.38 and 3901.381 to 3901.3813 of the Revised Code, a provider and the third-party payer, including a third-party payer that provides coverage under the medicaid program, shall not enter into a contractual arrangement under which time periods longer than those provided for in paragraph (c)(1) of 42 C.F.R. 447.46 are applicable to the third-party payer in paying a claim for any amount due for health care services rendered by the provider.

Effective Date: 07-24-2002; 03-30-2006

3901.384 Untimely claim process.

(A) Subject to division (B) of this section, a third-party payer that requires timely submission of claims for payment for health care services shall process a claim that is not submitted in a timely manner if a claim for the same services was initially submitted to a different third-party payer or state or federal program that offers health care benefits and that payer or program has determined that it is not responsible for the cost of the health care services. When a claim is submitted later than one year after the last date of service for which reimbursement is sought under the claim, the third-party payer shall pay or deny the claim not later than ninety days after receipt of the claim or, alternatively, pursuant to the requirements of sections 3901.381 to 3901.388 of the Revised Code. The third-party payer must make an election to process such claims either within the ninety-day period or under section 3901.381 of the Revised Code. If the claim is denied, the third-party payer shall notify the provider and the beneficiary. The notice shall state, with specificity, why the third-party payer denied the claim.

(B) The third-party payer may refuse to process a claim submitted by a provider if the provider submits the claim later than forty-five days after receiving notice from the different third-party payer or a state or federal program that that payer or program is not responsible for the cost of the health care services, or if the provider does not submit the notice of denial from the different third-party payer or program with the claim. The failure of a provider to submit a notice of denial in accordance with this division shall not affect the terms of a benefits contract.

(1) A determination that a third-party payer or state or federal program is not responsible for the cost of health care services includes a determination regarding coordination of benefits, preexisting health conditions, ineligibility for coverage at the time services were provided, subrogation provisions, and similar findings;

(2) State and federal programs that offer health care benefits include medicare, medicaid, workers' compensation, the civilian health and medical program of the uniformed services and other elements of the tricare program offered by the United States department of defense, and similar state or federal programs.

(D) Any provision of a contractual arrangement entered into between a third-party payer and a provider or beneficiary that is contrary to divisions (A) to (C) of this section is unenforceable.

Effective Date: 07-24-2002

3901.385 Third-party payer - prohibited acts.

A third-party payer shall not do either of the following:

(A) Engage in any business practice that unfairly or unnecessarily delays the processing of a claim or the payment of any amount due for health care services rendered by a provider to a beneficiary;

(B) Refuse to process or pay within the time periods specified in section 3901.381 of the Revised Code a claim submitted by a provider on the grounds the beneficiary has not been discharged from the hospital or the treatment has not been completed, if the submitted claim covers services actually rendered and charges actually incurred over at least a thirty-day period.

Effective Date: 07-24-2002

3901.386 Reimbursement contract - reimbursements to be made directly to hospital - assignment of benefits.

(A) Notwithstanding section 1751.13 or division (I)(2) of section 3923.04 of the Revised Code, a reimbursement contract entered into or renewed on or after June 29, 1988, between a third-party payer and a hospital shall provide that reimbursement for any service provided by a hospital pursuant to a reimbursement contract and covered under a benefits contract shall be made directly to the hospital.

(B) If the third-party payer and the hospital have not entered into a contract regarding the provision and reimbursement of covered services, the third-party payer shall accept and honor a completed and validly executed assignment of benefits with a hospital by a beneficiary, except when the third-party payer has notified the hospital in writing of the conditions under which the third-party payer will not accept and honor an assignment of benefits. Such notice shall be made annually.

(C) A third-party payer may not refuse to accept and honor a validly executed assignment of benefits with a hospital pursuant to division (B) of this section for medically necessary hospital services provided on an emergency basis.

Effective Date: 07-24-2002

3901.387 Duplicative claims - claim information system.

(A) When a provider or beneficiary submits a duplicative claim for payment for health care services before the time periods specified in section 3901.381 of the Revised Code have elapsed for the original claim submitted, the third-party payer may deny the duplicative claim. Denials of claims determined to be duplicative by the department of insurance shall not be considered by the department in a market conduct examination of a third-party payer's compliance with section 3901.381 of the Revised Code. The superintendent of insurance shall have the discretion to exclude an original claim in determining a violation under section 3901.381 of the Revised Code.

(B)

(1) A third-party payer shall establish a system whereby a provider and a beneficiary may obtain information regarding the status of a claim for payment for health care services, provided the claim is not materially deficient. A third-party payer shall inform providers and beneficiaries of the mechanisms that may be used to gain access to the system.

(2) If a third-party payer delegates the processing of payments to another entity, the third-party payer shall require the entity to comply with division (B)(1) of this section on behalf of the third-party payer.

Effective Date: 07-24-2002

3901.388 Payments considered final - overpayment.

(A) A payment made by a third-party payer to a provider in accordance with sections 3901.381 to 3901.386 of the Revised Code shall be considered final two years after payment is made. After that date, the amount of the payment is not subject to adjustment, except in the case of fraud by the provider.

(B) A third-party payer may recover the amount of any part of a payment that the third-party payer determines to be an overpayment if the recovery process is initiated not later than two years after the payment was made to the provider. The third-party payer shall inform the provider of its determination of overpayment by providing notice in accordance with division (C) of this section. The third-party payer shall give the provider an opportunity to appeal the determination. If the provider fails to respond to the notice sooner than thirty days after the notice is made, elects not to appeal the determination, or appeals the determination but the appeal is not upheld, the third-party payer may initiate recovery of the overpayment.

When a provider has failed to make a timely response to the notice of the third-party payer's determination of overpayment, the third-party payer may recover the overpayment by deducting the amount of the overpayment from other payments the third-party payer owes the provider or by taking action pursuant to any other remedy available under the Revised Code. When a provider elects not to appeal a determination of overpayment or appeals the determination but the appeal is not upheld, the third-party payer shall permit a provider to repay the amount by making one or more direct payments to the third-party payer or by having the amount deducted from other payments the third-party payer owes the provider.

(C) The notice of overpayment a third-party payer is required to give a provider under division (B) of this section shall be made in writing and shall specify all of the following:

(1) The full name of the beneficiary who received the health care services for which overpayment was made;

(2) The date or dates the services were provided;

(3) The amount of the overpayment;

(4) The claim number or other pertinent numbers;

(5) A detailed explanation of basis for the third-party payer's determination of overpayment;

(6) The method in which payment was made, including, for tracking purposes, the date of payment and, if applicable, the check number;

(7) That the provider may appeal the third-party payer's determination of overpayment, if the provider responds to the notice within thirty days;

(8) The method by which recovery of the overpayment would be made, if recovery proceeds under division (B) of this section.

(D) Any provision of a contractual arrangement entered into between a third-party payer and a provider or beneficiary that is contrary to divisions (A) to (C) of this section is unenforceable.

Effective Date: 07-24-2002

3901.389 Computation of interest.

(A) Any third-party payer that fails to comply with section 3901.381 of the Revised Code, or any contractual payment arrangement entered into under section 3901.383 of the Revised Code, shall pay interest in accordance with this section.

(B) Interest shall be computed based upon the number of days that have elapsed between the date payment is due in accordance with section 3901.381 of the Revised Code or the contractual payment arrangement entered into under section 3901.383 of the Revised Code, and the date payment is made. The interest rate for determining the amount of interest due shall be equal to an annual percentage rate of eighteen per cent.

(C) For purposes of this section, if a dispute exists between a provider and a third-party payer as to the day a payment was made by the third-party payer, both of the following apply:

(1) If the third-party payer or a person acting on behalf of the third-party payer submits a payment directly to a provider by mail and retains a record of the day the payment was mailed, there exists a rebuttable presumption that the payment was made five business days before the day the payment was received by the provider, unless it can be proven otherwise.

(2) If the third-party payer or a person acting on behalf of the third-party payer submits a payment directly to a provider electronically, there exists a rebuttable presumption that the payment was made twenty-four hours before the date the payment was received by the provider, unless it can be proven otherwise.

(D) Interest due in accordance with this section shall be paid directly to the provider at the time payment of the claim is made and shall not be used to reduce benefits or payments otherwise payable under a benefits contract.

Effective Date: 07-24-2002

3901.3810 Complaints by provider or beneficiary - retaliation by payer.

(A) A provider or beneficiary aggrieved with respect to any act of a third-party payer that the provider or beneficiary believes to be a violation of sections 3901.381 to 3901.388 of the Revised Code may file a written complaint with the superintendent of insurance regarding the violation.

(B) A third-party payer shall not retaliate against a provider or beneficiary who files a complaint under division (A) of this section. If a provider or beneficiary is aggrieved with respect to any act of the third-party payer that the provider or beneficiary believes to be retaliation for filing a complaint under division (A) of this section, the provider or beneficiary may file a written complaint with the superintendent regarding the alleged retaliation.

Effective Date: 07-24-2002

3901.3811 Failure to comply by third-party payer.

(A) No third-party payer shall fail to comply with sections 3901.381 and 3901.384 to 3901.3810 of the Revised Code.

(B) The superintendent of insurance may require third-party payers to submit reports of their compliance with division (A) of this section. If reports are required, the superintendent shall prescribe the content, format, and frequency of the reports in consultation with third-party payers. The superintendent shall not require reports to be submitted more frequently than once every three months.

The superintendent shall not use findings from reports submitted by a third-party payer under this division as the basis of a finding of a violation of division (A) of this section or the imposition of penalties under section 3901.3812 of the Revised Code. However, the information contained in the reports may cause the superintendent to conduct a market conduct examination of the third-party payer. During this examination, the superintendent may examine data collected from the same time period as covered by these reports and the superintendent's examination findings may be used as the basis for finding a violation of division (A) of this section.

Effective Date: 07-24-2002

3901.3812 Administrative remedies.

(A) If, after completion of an examination involving information collected from a six-month period, the superintendent finds that a third-party payer has committed a series of violations that, taken together, constitutes a consistent pattern or practice of violating division (A) of section 3901.3811 of the Revised Code, the superintendent may impose on the third-party payer any of the administrative remedies specified in division (B) of this section. In making a finding under this division, the superintendent shall apply the error tolerance standards for claims processing contained in the market conduct examiners handbook issued by the national association of insurance commissioners in effect at the time the claims were processed.

Before imposing an administrative remedy, the superintendent shall provide written notice to the third-party payer informing the third-party payer of the reasons for the superintendent's finding, the administrative remedy the superintendent proposes to impose, and the opportunity to submit a written request for an administrative hearing regarding the finding and proposed remedy. If the third-party payer requests a hearing, the superintendent shall conduct the hearing in accordance with Chapter 119. of the Revised Code not later than fifteen days after receipt of the request.

(B)

(1) In imposing administrative remedies under division (A) of this section for violations of section 3901.381 of the Revised Code, the superintendent may do any of the following:

(a) Levy a monetary penalty in an amount determined in accordance with division (B)(3) of this section;

(b) Order the payment of interest directly to the provider in accordance with section 3901.389 of the Revised Code;

(d) If a monetary penalty is not levied under division (B)(1)(a) of this section, impose any of the administrative remedies provided for in section 3901.22 of the Revised Code, other than those specified in divisions (D)(4) and (5) and (G) of that section.

(2) In imposing administrative remedies under division (A) of this section for violations of sections 3901.384 to 3901.3810 of the Revised Code, the superintendent may do any of the following:

(a) Levy a monetary penalty in an amount determined in accordance with division (B)(3) of this section;

(b) Order the payment of interest directly to the provider in accordance with section 3901.38 of the Revised Code;

(d) If a monetary penalty is not levied under division (B)(2)(a) of this section, impose any of the administrative remedies provided for in section 3901.22 of the Revised Code, other than those specified in divisions (D)(4) and (5) and (G) of that section. For violations of sections 3901.384 to 3901.3810 of the Revised Code that did not comply with section 3901.381 of the Revised Code, the superintendent may also use section 3901.22 of the Revised Code except divisions (D)(4) and (5) of that section.

(3) A finding by the superintendent that a third-party payer has committed a series of violations that, taken together, constitutes a consistent pattern or practice of violating division (A) of section 3901.3811 of the Revised Code, shall constitute a single offense for purposes of levying a fine under division (B)(1)(a) and (B)(2)(a) of this section. For a first offense, the superintendent may levy a fine of not more than one hundred thousand dollars. For a second offense that occurs on or earlier than four years from the first offense, the superintendent may levy a fine of not more than one hundred fifty thousand dollars. For a third or additional offense that occurs on or earlier than seven years after a first offense, the superintendent may levy a fine of not more than three hundred thousand dollars. In determining the amount of a fine to be levied within the specified limits, the superintendent shall consider the following factors:

(a) The extent and frequency of the violations;

(b) Whether the violations were due to circumstances beyond the third-party payer's control;

(d) The actual or potential harm to others resulting from the violations;

(e) If the third-party payer knowingly and willingly committed the violations;

(f) The third-party payer's financial condition;

(g) Any other factors the superintendent considers appropriate.

(C) The remedies imposed by the superintendent under this section are in addition to, and not in lieu of, such other remedies as providers and beneficiaries may otherwise have by law.

(D) Any fine collected under this section shall be paid into the state treasury as follows:

(1) Twenty-five per cent of the total to the credit of the department of insurance operating fund created by section 3901.021 of the Revised Code;

(2) Sixty-five per cent of the total to the credit of the general revenue fund ;

(3) Ten per cent of the total to the credit of claims processing education account, which is hereby created within the department of insurance operating fund created by section 3901.021 of the Revised Code. All money credited to the claims processing education account shall be used by the department of insurance to make technical assistance available to third-party payers, providers, and beneficiaries for effective implementation of the provisions of sections 3901.38 and 3901.381 to 3901.3814 of the Revised Code.

Amended by 128th General AssemblyFile No.9,HB 1, §101.01, eff. 7/17/2009.

Effective Date: 07-24-2002

3901.3813 Rules.

The superintendent of insurance may adopt rules as the superintendent considers necessary to carry out the purposes of section 3901.38 and sections 3901.381 to 3901.3812 of the Revised Code. The rules shall be adopted in accordance with Chapter 119. of the Revised Code.

Effective Date: 07-24-2002

3901.3814 Exceptions to provisions.

Sections 3901.38 and 3901.381 to 3901.3813 of the Revised Code do not apply to the following:

(A) Policies offering coverage that is regulated under Chapters 3935. and 3937. of the Revised Code;

(B) An employer's self-insurance plan and any of its administrators, as defined in section 3959.01 of the Revised Code, to the extent that federal law supersedes, preempts, prohibits, or otherwise precludes the application of any provisions of those sections to the plan and its administrators;

(C) A third-party payer for coverage provided under the medicare advantage program operated under Title XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.A. 301, as amended;

(D) A third-party payer for coverage provided under the medicaid program operated under Title XIX of the "Social Security Act," except that if a federal waiver applied for under section 5111.178 of the Revised Code is granted or the director of job and family services determines that this provision can be implemented without a waiver, sections 3901.38 and 3901.381 to 3901.3813 of the Revised Code apply to claims submitted electronically or non-electronically that are made with respect to coverage of medicaid recipients by health insuring corporations licensed under Chapter 1751. of the Revised Code, instead of the prompt payment requirements of 42 C.F.R. 447.46;

(E) A third-party payer for coverage provided under the tricare program offered by the United States department of defense.

Amended by 129th General AssemblyFile No.28,HB 153, §101.01, eff. 10/1/2011.

Effective Date: 07-24-2002; 09-29-2005; 03-30-2006; 2008 HB562 09-22-2008

3901.40 Payment or reimbursement to unlicensed or unaccredited hospital prohibited.

No insurance company, health insuring corporation, or self-insurance plan authorized to do business in this state shall include or provide in its policies or subscriber agreements for benefit payments or reimbursement for services in any hospital which is not certified or accredited as provided in division (A) of section 3727.02 of the Revised Code. No hospital located in this state shall charge any insurance company, health insuring corporation, federal, state, or local government agency, or person for any services rendered unless the hospital is certified or accredited as provided in division (A) of section 3727.02 of the Revised Code. "Hospital" as used in this section means only those institutions included within the definition of that term contained in section 3727.01 of the Revised Code, and the prohibitions in this section do not apply to facilities excluded from that definition.

Effective Date: 06-04-1997

3901.41 [Repealed].

Effective Date: 09-29-2005

3901.42 Annual filing with national association of insurance commissioners.

(A) As used in this section, "actuarial certification" means certification by a member in good standing of the American Academy of Actuaries, or a person who otherwise has competency in loss reserve valuation.

(B) Each domestic, foreign, and alien insurer authorized to transact insurance in this state shall, annually on or before the first day of March of each year, file with the national association of insurance commissioners a copy of its annual statement convention blank, along with such additional filings as prescribed by the superintendent of insurance for the preceding year. The information filed with the association shall be in the same format and scope as that required by the superintendent and shall include the signed jurat page and the actuarial certification, as required by the state of domicile. Any amendments and addendums to the annual statement filing subsequently filed with the superintendent shall also be filed with the association.

(C) Foreign insurers that are domiciled in a state that has a law substantially similar to division (B) of this section are deemed in compliance with this section.

(D) In the absence of actual malice, members, delegates, and employees of the national association of insurance commissioners, its authorized committees, subcommittees, and task forces, and all others charged with the responsibility of collecting, reviewing, analyzing, and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the superintendent under the authority of this section and are not subject to civil liability for libel, slander, or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required under this section.

(E)

(1) In addition to the annual statement required to be filed with the national association of insurance commissioners under division (B) of this section, the superintendent may require an insurer to file with the superintendent, on or before the forty-fifth day following the last day of each calendar quarter, quarterly reports showing its condition for each of the first three calendar quarters.

(2) The quarterly report shall consist of information that the superintendent considers to be relevant to the determination of the solvency of an insurer.

(F) The superintendent may, pursuant to Chapter 119. of the Revised Code, suspend, revoke, or refuse to renew the license to engage in the business of insurance of any insurer that fails to file its annual statement within the time required under division (B) of this section or a quarterly report within the time required under division (E) of this section, or within any extension of time which the superintendent, for good cause, may have granted.

Effective Date: 06-18-1986

3901.43 [Repealed].

Effective Date: 06-18-2002

3901.44 Records of insurance fraud investigation.

(A) As used in this section, "insurance fraud investigation" means any investigation conducted by the superintendent of insurance or a designee of the superintendent that relates to a fraudulent insurance act as defined in section 3999.31 of the Revised Code.

(B) All documents, reports, and evidence in the possession of the superintendent or the superintendent's designee that pertain to an insurance fraud investigation are confidential law enforcement investigatory records under section 149.43 of the Revised Code. Notwithstanding such section, the superintendent shall not prohibit public inspection of such records that pertain to an insurance fraud investigation after the expiration of all federal and state statutes of limitations applicable to the particular offense to which the papers, documents, reports, and evidence relate.

(C) All documents, reports, and evidence in the possession of the superintendent that do not pertain to such an insurance fraud investigation are public records under section 149.43 of the Revised Code, and are not by such possession alone confidential law enforcement investigatory records.

(D) All documents, reports, and evidence in the possession of the superintendent or the superintendent's designee that pertain to such an insurance fraud investigation are not subject to subpoena in civil actions by any court of this state until opened for public inspection by the superintendent in accordance with division (B) of this section or with section 149.43 of the Revised Code, unless the superintendent or the superintendent's designee consents, or until after reasonable notice to the superintendent and opportunity for hearing, the court determines the superintendent would not be hindered unnecessarily by such subpoena.

(E) Notwithstanding divisions (B), (C), and (D) of this section, the superintendent may do either of the following:

(1) Share documents, reports, and evidence that are the subject of this section with the chief deputy rehabilitator, the chief deputy liquidator, other deputy rehabilitators and liquidators, and any other person employed by, or acting on behalf of, the superintendent pursuant to Chapter 3901. or 3903. of the Revised Code, with other local, state, federal, and international regulatory and law enforcement agencies, with local, state, and federal prosecutors, with the national association of insurance commissioners and its affiliates and subsidiaries, with insurers, and with investigators hired by insurers, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged document, report, or evidence and has authority to do so;

(2) Disclose documents, reports, and evidence that are the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent or the state, resulting from the exercise of the superintendent's official duties.

(F) Notwithstanding divisions (B), (C), (D), and (E) of this section, the superintendent may authorize the national association of insurance commissioners and its affiliates and subsidiaries by agreement to share confidential or privileged documents, reports, and evidence received pursuant to division (E)(1) of this section with local, state, federal, and international regulatory and law enforcement agencies and with local, state, and federal prosecutors, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged document, report, or evidence and has authority to do so.

(G) Notwithstanding divisions (B), (C), (D), and (E) of this section, the chief deputy rehabilitator, the chief deputy liquidator, and other deputy rehabilitators and liquidators may disclose documents, reports, and evidence that are the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent, the rehabilitator, the liquidator, or the state resulting from the exercise of the superintendent's official duties in any capacity.

(H) Nothing in this section shall prohibit the superintendent from receiving documents, reports, and evidence in accordance with section 3901.045 of the Revised Code.

(I) The superintendent may enter into agreements governing the sharing and use of documents, reports, and evidence consistent with the requirements of this section.

(J)

(1) No waiver of any applicable privilege or claim of confidentiality in the documents, reports, and evidence described in this section shall occur as a result of sharing or receiving documents, reports, and evidence as authorized in divisions (E)(1), (F), and (H) of this section.

(2) The disclosure of a document, report, or evidence in connection with a regulatory or legal action pursuant to divisions (E)(2) and (G) of this section does not prohibit an insurer or any other person from taking steps to limit the dissemination of the document, report, or evidence to persons not involved in or the subject of the regulatory or legal action on the basis of any recognized privilege arising under any other section of the Revised Code or the common law.

(K) The superintendent and the superintendent's designee are not subject to subpoena in civil actions by any court of this state to testify concerning any matter of which they have knowledge pursuant to a pending insurance fraud investigation by the superintendent.

Effective Date: 06-18-2002

3901.45 Effect of sexual orientation, HIV, or AIDS or related condition.

(A) As used in sections 3901.45 and 3901.46 of the Revised Code:

(1) "AIDS," "HIV," "AIDS-related condition," and "HIV test" have the same meanings as in section 3701.24 of the Revised Code.

(2) "Insurer" means any person authorized to engage in the business of life or sickness and accident insurance under Title XXXIX [39] of the Revised Code or any person or governmental entity providing health services coverage for individuals on a self-insurance basis.

(3) "Group policy" means, with respect to life insurance, a policy covering more than twenty-five individuals and issued pursuant to section 3917.01 of the Revised Code, and with respect to sickness and accident insurance, a policy covering more than twenty-five individuals and issued pursuant to section 3923.11, 3923.12, or 3923.13 of the Revised Code. "Group policy" includes a certificate of life or sickness and accident insurance covering more than twenty-five individuals under a group policy issued to a multiple employer trust.

(4) "Individual policy" means, with respect to life insurance and sickness and accident insurance, a policy other than a group policy, except that "individual policy" also includes all of the following:

(a) The coverage under a group policy of an individual who seeks to become a member of an insured group after having declined a previous offer of coverage under the group policy;

(b) An individual who seeks life insurance coverage under a group policy in excess of the maximum coverage available under the policy without evidence of insurability;

(c) A certificate of life or sickness and accident insurance covering no more than twenty-five individuals under a group policy issued to a multiple employer trust.

(B) In processing an application for an individual policy of life or sickness and accident insurance or in determining insurability of an applicant, no insurer shall:

(1) Take into consideration an applicant's sexual orientation;

(2) Make any inquiry toward determining an applicant's sexual orientation or direct any person who provides services to the insurer to investigate an applicant's sexual orientation;

(3) Make a decision adverse to the applicant based on entries in medical records or other reports that show that the applicant has sought an HIV test, consultation regarding the possibility of developing AIDS or an AIDS-related condition, or counseling for concerns related to AIDS from health care professionals unless there has been a diagnosis, confirmed by a positive HIV test, of AIDS or an AIDS-related condition or the applicant has been treated for either.

(C)

(1) In developing and asking questions regarding medical histories and lifestyles of applicants for life or sickness and accident insurance and in assessing the answers, an insurer shall not ask questions designed to ascertain the sexual orientation of the applicant nor use factors such as marital status, living arrangements, occupation, gender, medical history, beneficiary designation, or zip code or other geographic designation to aid in ascertaining the applicant's sexual orientation.

(2) An insurer may ask the applicant if he has ever been diagnosed as having AIDS or an AIDS-related condition.

(3) An insurer may ask the applicant specifically whether he has ever had a positive result on an HIV test. "Positive result" means a result interpreted as positive in accordance with guidelines developed by the director of health under division (B)(1)(a) of section 3701.241 of the Revised Code, even though the applicant may have been tested in another state. "Positive result" does not mean an initial positive result that further testing showed to be false.

(4) The insurer shall not ask the applicant whether he has ever taken an HIV test.

(D)

(1) Except as provided in division (D)(2) of this section, no insurer shall cancel a policy of life or sickness and accident insurance, or refuse to renew a policy of life or sickness and accident insurance other than a policy that is renewable at the option of the insurer, based solely on the fact that, after the effective date of the policy, the policyholder is diagnosed as having AIDS, an AIDS-related condition, or an HIV infection.

(2) If a policy of life or sickness and accident insurance provides for a contestability period, an insurer may cancel the policy during the contestability period if the applicant made a false statement in the application with regard to the question of whether he has been diagnosed as having AIDS, an AIDS-related condition, or an HIV infection.

(E) No insurer shall deliver, issue for delivery, or renew a policy of life or sickness and accident insurance that limits benefits or coverage in the event that, after the effective date of the policy, the insured develops AIDS or an AIDS-related condition or receives a positive result on an HIV test.

(F) An insurer is not required to offer coverage under a policy of life or sickness and accident insurance to an individual or group member, or a dependent of an individual or group member, who has AIDS or an AIDS-related condition, or who has had a positive result on an HIV test.

(G) An insurer is not required to continue to provide coverage under a policy of life or sickness and accident insurance to an individual or group member, or a dependent of an individual or group member, if the insurer determines the individual or group member or dependent of the individual or group member knew on the effective date of the policy that he had AIDS, an AIDS-related condition, or a positive result of an HIV test.

(H) A violation of this section is an unfair insurance practice under sections 3901.19 to 3901.26 of the Revised Code.

Effective Date: 11-01-1989

3901.46 Requiring HIV testing.

As used in this section, "membership organization" means a fraternal or other association or group of individuals involved in the same occupation, activity, or interest that is organized and maintained in good faith for purposes other than to obtain insurance and is not organized or maintained for the purpose of engaging in activities for gain or profit.

(A) In underwriting an individual policy of life or sickness and accident insurance or a group policy of life or sickness and accident insurance providing coverage for members of a membership organization, an insurer may require an applicant for coverage under the policy to submit to an HIV test only in conjunction with tests for other health conditions. No applicant shall be required to submit to an HIV test on the basis of the applicant's sexual orientation or factors described in division (C)(1) of section 3901.45 of the Revised Code that are used to ascertain the applicant's sexual orientation.

(B)

(1) An insurer that requests an applicant to take an HIV test shall obtain the applicant's written consent for the test and shall inform the applicant of the purpose of the test. The consent form shall include information about the tests to be performed, the confidentiality of the results, procedures for notifying the applicant of the results, and a general interpretation of test results.

(2) The superintendent of insurance shall adopt rules under Chapter 119. of the Revised Code establishing the form and content of the consent required under division (B)(1) of this section.

(1) The applicant;

(2) The applicant's or insured's physician or other health care provider if the applicant or insured provides the insurer with prior written consent for disclosure;

(3) Another person that the applicant or insured specifically designates in writing;

(4) A medical information exchange for insurers operated under procedures intended to ensure confidentiality, including the use of general codes for results of tests for a number of diseases and conditions as well as for AIDS or an AIDS-related condition.

(D) The HIV test or tests to be given the applicant shall be a test or tests approved by the director of health pursuant to division (B) of section 3701.241 of the Revised Code. Test results shall be interpreted strictly in accordance with guidelines for the use of the tests adopted by the director.

(E) The requirements of division (B) of section 3701.24 and sections 3701.242 and 3701.243 of the Revised Code do not apply to insurers in the underwriting of an individual policy of life or sickness and accident insurance or of a group policy of life or sickness and accident insurance providing coverage for members of a membership organization, except that an insurer may make use of the procedures in division (C) of section 3701.243 of the Revised Code.

(F) In underwriting a group policy of life or sickness and accident insurance, no insurer shall require an individual seeking coverage, other than an individual seeking coverage under the policy of a membership organization, to submit to an HIV test.

(G) A violation of this section is an unfair insurance practice under sections 3901.19 to 3901.26 of the Revised Code.

Effective Date: 02-12-2004

3901.47 Administration of claims unpaid due to insolvency of insurer.

(A) As used in this section:

(1) "Insurer" means any insurer authorized to write life or sickness and accident insurance in this state under Title XXXIX [39] of the Revised Code.

(2) "Insolvent insurer" means any of the following:

(a) Farm and ranch life insurance company, domiciled in the state of Kansas;

(b) First transcontinental life insurance corporation, domiciled in the state of Wisconsin;

(d) United fire insurance company, domiciled in the state of Illinois;

(e) Any other insurer that, not later than June 30, 1990, is under an order of liquidation issued by a court of competent jurisdiction;

(f) Any person that is organized under the laws of another state as a nonprofit hospital service association, corporation, or plan, that is authorized by the laws of that state to offer sickness and accident benefits for hospital services under group subscriber contracts, that has furnished certificates in connection with or pursuant to these contracts to subscribers residing or employed in this state, and that, not later than June 30, 1990, is under an order of liquidation issued by a court of competent jurisdiction. Division (A)(2)(f) of this section does not include any person organized as a health maintenance organization or an indemnity insurance company.

(3) "Ohio claimant" means a policyholder or a contract holder under an individual policy, or a certificate holder under a group policy or contract, of an insolvent insurer who is owed life, sickness and accident, or annuity benefits pursuant to the terms of policies of insurance issued by that insurer.

(B) The superintendent of insurance, in furtherance of section 3901.011, 3903.17, or 3903.53 of the Revised Code, may file a complaint in the court of common pleas of Franklin county for an order appointing him, whether as liquidator, ancillary receiver, or otherwise, to make arrangements for the distribution of voluntary contributions made in accordance with division (E) of this section. As part of the complaint, the superintendent shall submit a written plan for the administration of the contributions. The plan shall include, but need not be limited to, procedures for receipt, maintenance, and distribution of the contributions and for the adjudication and subrogation of the claims to be paid. If a life and health insurance guaranty association is in existence in this state, the superintendent may direct the association to perform the administrative duties set forth in the plan.

(C) The superintendent shall take all reasonable and necessary actions to implement the plan as described in division (B) of this section. As part of these actions, all of the following apply:

(1) The superintendent shall seek a full pro rata recovery of the assets of the liquidation estates that are due Ohio claimants pursuant to Chapter 3903. of the Revised Code and the insurance liquidation laws of the states of domicile of the insolvent insurers;

(2) The superintendent shall be subrogated to all claims of Ohio claimants in the fully adjudicated amounts. These amounts are not reduced by payments from funds voluntarily contributed.

(3)

(a) The superintendent shall attempt to secure payment of the claims adjudicated pursuant to the plan as described in division (B) of this section.

(b) No Ohio claimant is entitled to receive more than one hundred per cent of the adjudicated amounts of his claims. If any claimant receives more than one hundred per cent, the superintendent may undertake legal action to recover the amounts in excess of one hundred per cent from the claimant. The related liquidation estates shall be obligated to pay the costs incurred by the superintendent to recover these amounts.

(4) Voluntary contributions held by any person are not the property of any insolvent insurer. Distribution to Ohio claimants of the funds voluntarily contributed are not payments on behalf of any insolvent insurer, and do not lose their legal status as voluntary contributions.

(5) Payment to Ohio claimants of any of the funds voluntarily contributed does not reduce their claims against an insolvent insurer if those claims have been subrogated to the superintendent.

(D) Any funds remaining in excess of the aggregate total of all claims and administrative expenses of Ohio claimants shall be transferred to a life and health insurance guaranty association that may be in existence in this state for use in payment of administrative costs or claims related to subsequent insolvencies. If the association does not exist, the excess funds shall be distributed pro rata to the contributing insurers and appropriate adjustments shall be made by the superintendent in the premium or franchise tax liability of those contributing insurers.

(E)

(1) Any insurer that, not later than June 30, 1990, and in accordance with the plan described in division (B) of this section, voluntarily contributes funds to pay the life, sickness and accident, or annuity claims of residents of this state that are unpaid due to the insolvency of an insolvent insurer may offset against its premium or franchise tax liability twenty per cent of the contribution for each of the first five calendar years following the year in which the contribution was made.

(2) If that portion of the aggregate total of the contributions described in division (E)(1) of this section that is eligible for offset in a particular year exceeds an insurer's tax liability to this state for that year, the amount in excess of that tax liability that remains eligible for offset, notwithstanding the five-year limitation set forth in division (E)(1) of this section, may be offset against that tax liability in future years.

(3) Contributions used to defray the costs of administering the plan as described in division (B) of this section qualify for treatment as contributions eligible for the tax offset provided in division (E)(1) of this section.

(F)

(1) An insurer is not subject to liability for damages arising out of a civil action of any nature for making voluntary contributions in accordance with division (E) of this section or for otherwise participating in the plan described in division (B) of this section.

(2) Any life and health guaranty association directed by the superintendent to perform administrative duties set forth in the plan described in division (B) of this section is not subject to liability for damages arising out of a civil action of any nature for participating in that plan.

(3) Funds voluntarily pledged, committed, or contributed by an insurer in accordance with division (E) of this section are not subject to attachment, lien, execution, or other legal actions brought by persons other than the superintendent pursuant to his responsibilities under the plan described in division (B) of this section.

Effective Date: 11-20-1989

3901.48 Disclosing work papers resulting from conduct of audit.

(A) The original work papers of a certified public accountant performing an audit of an insurance company or health insuring corporation doing business in this state that is required by rule or by any section of the Revised Code to file an audited financial report with the superintendent of insurance shall remain the property of the certified public accountant. Any copies of these work papers voluntarily given to the superintendent shall be the property of the superintendent. The original work papers or any copies of them, whether in possession of the certified public accountant or the department of insurance, are confidential and privileged and are not a public record as defined in section 149.43 of the Revised Code. The original work papers and any copies of them are not subject to subpoena and shall not be made public by the superintendent or any other person.

(B) The work papers of the superintendent or of the person appointed by the superintendent, resulting from the conduct of an examination made pursuant to section 3901.07 of the Revised Code or from the conduct of a financial analysis of any entity subject to examination by the superintendent, including but not limited to any insurance company, health insuring corporation, fraternal benefit society, or multiple employer welfare arrangement, are confidential and privileged and are not a public record as defined in section 149.43 of the Revised Code. The original work papers and any copies of them are not subject to subpoena and shall not be made public by the superintendent or any other person.

(C) The work papers of the superintendent or of any person appointed by the superintendent, resulting from the conduct of a performance regulation examination made pursuant to authority granted under section 3901.011 of the Revised Code or from the conduct of a market analysis or investigation of any entity subject to examination by the superintendent, including, but not limited to, any insurance company, health insuring corporation, fraternal benefit society, or multiple employer welfare arrangement, are confidential and privileged and are not a public record as defined in section 149.43 of the Revised Code. The original work papers and any copies of them are not subject to subpoena and shall not be made public by the superintendent or any other person.

(D) Notwithstanding divisions (A), (B), and (C) of this section, the superintendent may do either of the following:

(1) Share work papers that are the subject of this section with the chief deputy rehabilitator, the chief deputy liquidator, other deputy rehabilitators and liquidators, and any other person employed by, or acting on behalf of, the superintendent pursuant to Chapter 3901. or 3903. of the Revised Code, with other local, state, federal, and international regulatory and law enforcement agencies, with local, state, and federal prosecutors, with the national association of insurance commissioners and its affiliates and subsidiaries, and with the interstate insurance product regulation commission described in section 3915.16 of the Revised Code, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged work paper and has authority to do so;

(2) Disclose work papers that are the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent or the state, resulting from the exercise of the superintendent's official duties.

(E) Notwithstanding divisions (A), (B), (C), and (D) of this section, the superintendent may authorize the national association of insurance commissioners and its affiliates and subsidiaries or the interstate insurance product regulation commission described in section 3915.16 of the Revised Code by agreement to share confidential or privileged work papers received pursuant to division (D)(1) of this section with local, state, federal, and international regulatory and law enforcement agencies and with local, state, and federal prosecutors, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged work paper and has authority to do so.

(F) Notwithstanding divisions (A), (B), (C), and (D) of this section, the chief deputy rehabilitator, the chief deputy liquidator, and other deputy rehabilitators and liquidators may disclose work papers that are the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent, the rehabilitator, the liquidator, or the state resulting from the exercise of the superintendent's official duties in any capacity.

(G) Nothing in this section shall prohibit the superintendent from receiving work papers in accordance with section 3901.045 of the Revised Code.

(H) The superintendent may enter into agreements governing the sharing and use of work papers consistent with the requirements of this section.

(I)

(1) No waiver of any applicable privilege or claim of confidentiality in the work papers, or copies thereof, that are the subject of this section shall occur as a result of sharing or receiving work papers as authorized in divisions (D)(1), (E), and (G) of this section.

(2) The disclosure of work papers in connection with a regulatory or legal action pursuant to divisions (D)(2) and (F) of this section does not prohibit an insurer or any other person from taking steps to limit the dissemination of the work papers to persons not involved in or the subject of the regulatory or legal action on the basis of any recognized privilege arising under any other section of the Revised Code or the common law.

Effective Date: 06-18-2002; 08-21-2006

3901.49 [Repealed].

Effective Date: 02-09-2004

3901.491 Genetic screening or testing.

(A) As used in this section:

(1) "Genetic screening or testing" means a laboratory test of a person's genes or chromosomes for abnormalities, defects, or deficiencies, including carrier status, that are linked to physical or mental disorders or impairments, or that indicate a susceptibility to illness, disease, or other disorders, whether physical or mental, which test is a direct test for abnormalities, defects, or deficiencies, and not an indirect manifestation of genetic disorders.

(2) "Insurer" means any person authorized under Title XXXIX of the Revised Code to engage in the business of sickness and accident insurance.

(3) "Sickness and accident insurance" means sickness and accident insurance under Chapter 3923. of the Revised Code excluding disability income insurance and excluding supplemental policies of sickness and accident insurance.

(B) Upon the repeal of section 3901.49 of the Revised Code , no insurer shall do either of the following:

(1) Consider any information obtained from genetic screening or testing in processing an application for an individual or group policy of sickness and accident insurance, or in determining insurability under such a policy;

(2) Inquire, directly or indirectly, into the results of genetic screening or testing or use such information, in whole or in part, to cancel, refuse to issue or renew, or limit benefits under, a sickness and accident insurance policy.

(C) Any insurer that has engaged in, is engaged in, or is about to engage in a violation of division (B) of this section is subject to the jurisdiction of the superintendent of insurance under section 3901.04 of the Revised Code.

Effective Date: 09-26-2003

3901.50 [Repealed].

Effective Date: 02-09-2004

3901.501 Genetic screening or testing for self-insurance plans.

(A) As used in this section:

(2) "Self-insurer" means any government entity providing coverage for health care services on a self-insurance basis.

(B) Upon the repeal of section 3901.50 of the Revised Code , no self-insurer shall do either of the following:

(1) Consider any information obtained from genetic screening or testing in processing an application for coverage under a plan of self-insurance or in determining insurability under such a plan;

(2) Inquire, directly or indirectly, into the results of genetic screening or testing or use such information, in whole or in part, to cancel, refuse to provide or renew, or limit benefits under, a plan of self-insurance.

(C) Any self-insurer that has engaged in, is engaged in, or is about to engage in a violation of division (B) of this section is subject to the jurisdiction of the superintendent of insurance under section 3901.04 of the Revised Code.

Effective Date: 09-26-2003

3901.51 Uncertified securities as deposits definitions.

As used in sections 3901.51 to 3901.55 of the Revised Code:

(A) "Clearing corporation" has the same meaning as in section 1308.01 of the Revised Code, except that with respect to securities issued by institutions organized or existing under the laws of any foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business in that country, "clearing corporation" includes a corporation that is organized or existing under the laws of any foreign country and is legally qualified under those laws to effect transactions in securities by computerized book-entry.

(B) "Direct participant" means a bank, trust company, or other entity that maintains an account in its name in a clearing corporation and through which an insurance company participates in a clearing corporation.

(C) "Federal reserve book-entry system" means the computerized systems sponsored by the United States department of the treasury and agencies and instrumentalities of the United States for holding and transferring securities of the United States government and agencies and instrumentalities in federal reserve banks through banks that are members of the federal reserve system or that otherwise have access to these computerized systems.

(D) "Member bank" means a national or state bank or a trust company that is a member of the federal reserve system and through which an insurance company participates in the federal reserve book-entry system.

(E) "Provisions of the insurance laws of this state" means provisions of Title IX of the Revised Code related to the deposit of securities for the benefit and security of policyholders, and includes, but is not limited to, sections 3901.18, 3901.74, 3901.75, 3901.86, 3903.73, 3907.07, 3909.03, 3909.09, 3909.17, 3913.01, 3913.04, 3919.13, 3919.36, 3919.37, 3919.41, 3925.07, 3927.02, 3927.06, 3929.01, 3929.07, 3929.08, 3929.09, 3929.10, 3929.11, 3941.30, 3941.31, 3941.32, 3941.33, 3941.34, 3941.42, 3953.06, and 3953.11 of the Revised Code.

(F) "Securities" has the same meaning as in section 1308.01 of the Revised Code.

Effective Date: 08-06-2004

3901.52 Insurance company may place securities in clearing corporation or federal reserve book-entry system.

(A) An insurance company may place or arrange for the placement of securities held in or purchased for its general account and its separate accounts in a clearing corporation or the federal reserve book-entry system. Ownership of, and other interest in, these securities may be transferred by bookkeeping entry on the books of the clearing corporation or in the federal reserve book-entry system without physical delivery of certificates representing these securities.

(B) The records of any member bank through which an insurance company holds securities in the federal reserve book-entry system, and the records of any direct participant through which an insurance company holds securities in a clearing corporation, shall show at all times that the securities are held for that insurance company and for which accounts of that insurance company they are held.

(C) When securities are placed with a clearing corporation, certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of the clearing corporation with any other securities placed with the clearing corporation by any person regardless of the ownership of the securities, and certificates representing securities of small denominations may be merged into one or more certificates of larger denominations.

Effective Date: 09-28-1990

3901.53 Placement of securities shall satisfy deposit requirements.

(A) Securities that are eligible for deposit under provisions of the insurance laws of this state may be placed with a clearing corporation or held in the federal reserve book-entry system.

(B) When an insurance company places or arranges for the placement of securities in a clearing corporation or in the federal reserve book-entry system, the securities so placed shall satisfy the deposit requirements under provisions of the insurance laws of this state, if all of the following conditions are satisfied:

(1) The securities shall be under the control of the superintendent of insurance;

(2) The securities shall not be withdrawn by the insurance company without the written approval of the superintendent;

(3) The placement shall be made pursuant to a written agreement between the insurance company and a direct participant or member bank. The agreement shall be approved in writing by the superintendent and shall limit withdrawals to those having the written approval of the department of insurance.

(4) The placement shall be credited by the department as a deposit in its possession on the basis of an affidavit of the insurance company describing the amount and nature of the securities;

(5) The insurance company holding the securities shall provide the superintendent with both of the following:

(a) Evidence issued by its direct participant or the member bank through which it has placed securities in a clearing corporation or in the federal reserve book-entry system. The evidence shall be in a form that is sufficient to establish that the securities are actually recorded in an account in the name of the direct participant or member bank.

(b) Evidence issued by its direct participant or the member bank that the records of the direct participant or member bank reflect that the securities are held subject to the written order of the superintendent.

Effective Date: 09-28-1990

3901.54 Securities may not be used for other purposes.

No insurance company shall use, for any purpose other than to satisfy the deposit requirements under provisions of the insurance laws of this state, securities that have been placed in a clearing corporation or in the federal reserve book-entry system for the satisfaction of these requirements pursuant to division (B) of section 3901.53 of the Revised Code.

Effective Date: 09-28-1990

3901.55 Rules.

The superintendent of insurance may adopt rules pursuant to Chapter 119. of the Revised Code to carry out the purposes of sections 3901.51, 3901.52, and 3901.53 of the Revised Code.

Effective Date: 09-28-1990

3901.56 Rewards or incentives for insurer wellness or health improvement programs.

An insurer may offer a wellness or health improvement program that provides rewards or incentives, including merchandise; gift cards; debit cards; premium discounts or rebates; contributions to a health savings account; modifications to copayment, deductible, or coinsurance amounts; or any combination of these incentives, to encourage participation or to reward participation in the program.

A wellness or health improvement program offered by an insurer under this section shall not be construed to violate division (E) of section 1751.31 or division (G) of section 3901.21 of the Revised Code if the program is disclosed in the policy or plan.

The insured may be required to provide verification, such as a statement from their physician, that a medical condition makes it unreasonably difficult or medically inadvisable for the individual to participate in the wellness or health improvement program.

Nothing in this section shall prohibit an insurer from offering incentives or rewards to members for adherence to wellness or health improvement programs if otherwise allowed by federal law.

Nothing under division (C)(1) of section 3923.571 or section 3924.25 of the Revised Code shall be construed as prohibiting an insurer from offering a wellness or health improvement program or restricting the amount an employee is charged for coverage under a group policy after the application of any premium discounts or rebates, or modifying otherwise applicable copayments or deductibles for adherence to wellness or health improvement programs.

For purposes of this section, "insurer" means a life insurance company, sickness and accident insurer, multiple employer welfare arrangement, public employee benefit plan, or health insuring corporation.

Added by 129th General AssemblyFile No.28,HB 153, §101.01, eff. 9/29/2011.

3901.61 Credit for reinsurance ceded definitions.

As used in sections 3901.61 to 3901.65 of the Revised Code:

(A) "Assuming insurer" means an insurance company that accepts all or part of the risk underwritten by a ceding insurer.

(B) "Ceding insurer" means an insurance company that transfers all or part of the risk it underwrites to an assuming insurer.

Effective Date: 06-29-1994

3901.62 Credit for reinsurance ceded as asset or reduction of liability.

(A) Except as provided in sections 3901.63 and 3901.64 of the Revised Code, a domestic ceding insurer that is authorized to do any insurance business in this state may take credit for any reinsurance ceded as either an asset or a reduction of liability only if one of the following applies:

(1) The reinsurance is ceded to an assuming insurer that is authorized to do any insurance or reinsurance business in this state.

(2) The reinsurance is ceded to an assuming insurer that is not authorized to do any insurance or reinsurance business in this state, provided the reinsurance is ceded to a reinsurance pool or other risk-sharing entity in which participation is required by law, rule, or regulation of the jurisdiction in which the pool or entity is located.

(3) The reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution, as defined in division (B)(2) of section 3901.63 of the Revised Code, for the payment of the valid claims of its United States policyholders and ceding insurers, and their assigns and successors in interest.

(B) A trust maintained by an assuming insurer under division (A)(3) of this section shall meet the following requirements:

(1) In the case of a single assuming insurer, the trust shall consist of a trusteed account representing the assuming insurer's liabilities attributable to business underwritten in the United States. A trusteed surplus of not less than twenty million dollars shall be maintained by the assuming insurer.

(2) In the case of a group of assuming insurers, including incorporated and individual unincorporated underwriters, the trust shall consist of a trusteed account representing the group's liabilities attributable to business written in the United States. A trusteed surplus shall be maintained by the group, of which surplus one hundred million dollars shall be held jointly for the benefit of the United States ceding insurers of any member of the group. The following requirements apply to the group of assuming insurers:

(a) The incorporated members of the group shall not engage in any business other than underwriting as a member of the group, and shall be subject to the same level of solvency regulation and control by the group's domiciliary regulator as are the unincorporated members.

(b) The group shall make available to the superintendent of insurance an annual certification of the solvency of each underwriter in the group. The certification shall be provided by the group's domiciliary regulator and its independent public accountants.

(3) In the case of a group of incorporated insurers under common administration with aggregate policyholders' surplus of ten billion dollars that has continuously transacted an insurance business outside the United States for at least three years immediately prior to assuming reinsurance, the trust shall be in an amount equal to the group's several liabilities attributable to business ceded by United States ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group. A joint trusteed surplus shall be maintained by the group, of which surplus one hundred million dollars shall be held jointly for the benefit of United States ceding insurers of any member of the group as additional security for any such liabilities. The following requirements apply to the group of incorporated insurers:

(a) The group shall comply with all filing requirements contained in this section.

(b) The books and records of the group shall be subject to examination by the superintendent in the same manner as the books and records of insurers are subject to examination by the superintendent in accordance with section 3901.07 of the Revised Code. The group shall bear the expenses of these examinations in the manner provided by that section.

(c) Each member of the group shall make available to the superintendent an annual certification of the member's solvency by the member's domiciliary regulator and an independent public accountant.

(C) A trust maintained by an assuming insurer under division (A)(3) of this section shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. The trust shall be in a form approved by the superintendent and shall include the following:

(1) The trust instrument shall provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States.

(2) The trust shall vest legal title to its assets in the trustees of the trust for its United States policyholders and ceding insurers, and their assigns and successors in interest.

(3) The trust, and the assuming insurer maintaining the trust, shall allow the superintendent to conduct examinations in the same manner as the superintendent conducts examinations of insurers under section 3901.07 of the Revised Code.

(D) No later than the last day of February of each year, the trustees of a trust maintained by an assuming insurer under division (A)(3) of this section shall provide the superintendent with a written report setting forth the balance of the trust and listing the trust's investments as of the preceding thirty-first day of December. The trustees shall certify the date of the termination of the trust, if termination of the trust is planned, or shall certify that the trust does not expire prior to the following thirty-first day of December.

(E) To enable the superintendent to determine the sufficiency of a trust maintained by an assuming insurer under division (A)(3) of this section, the assuming insurer shall annually report information on the trust to the superintendent that is substantially the same as that information licensed insurers are required to report under sections 3907.19, 3909.06, and 3929.30 of the Revised Code on forms adopted under section 3901.77 of the Revised Code.

(F) An assuming insurer shall file a written instrument appointing an attorney as its agent in this state upon whom all service of process may be served. Service of process upon this agent shall bring the assuming insurer within the jurisdiction of the courts of this state as if served upon an agent pursuant to section 3927.03 of the Revised Code.

Effective Date: 09-01-2002

3901.63 Credit for reinsurance ceded as reduction of liability.

(A) If section 3901.62 of the Revised Code does not apply to the reinsurance ceded to an assuming insurer by a domestic ceding insurer that is authorized to do any insurance business in this state, the ceding insurer may take credit for the reinsurance ceded as a reduction of liability in an amount not exceeding the liabilities carried by the ceding insurer, if the ceding insurer complies with section 3901.64 of the Revised Code, and if funds are held directly by the ceding insurer or in trust on behalf of the ceding insurer, in accordance with this section, as security for the payment of obligations under the reinsurance contract with the assuming insurer.

(B)

(1) If the funds are held directly by the ceding insurer under division (A) of this section, the funds shall be held in the United States and shall be under the exclusive control of, and subject to withdrawal solely by, the ceding insurer. If the funds are held in trust on behalf of the ceding insurer under division (A) of this section, the funds shall be held in the United States in a qualified United States financial institution.

(2) For the purposes of division (B)(1) of this section, a "United States financial institution" is qualified if both of the following apply:

(a) The institution is organized under or, in the case of a United States branch or agency office of a foreign banking organization, is chartered under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers.

(b) The institution is regulated, supervised, and examined by federal or state officials that have regulatory authority over banks and trust companies.

(C) The funds held directly by the ceding insurer or in trust on behalf of the ceding insurer shall be in any of the following forms:

(1) Cash;

(2) Securities that are listed by the securities valuation office of the national association of insurance commissioners and that qualify as admitted assets;

(3) Irrevocable, unconditional, and automatically renewable letters of credit that are issued or confirmed by a qualified United States financial institution. For purposes of division (C)(3) of this section, a United States financial institution is qualified if all of the following apply:

(a) It is organized under or, in the case of a United States branch or agency office of a foreign banking organization, is chartered under the laws of the United States or any state thereof.

(b) It is regulated, supervised, and examined by federal or state officials that have regulatory authority over banks and trust companies.

(c) The superintendent of insurance or the securities valuation office of the national association of insurance commissioners has determined that it meets such standards of financial condition and standing as are considered necessary and appropriate for purposes of ensuring that its letters of credit will be of a quality that is acceptable to the superintendent.

(4) Any other form of security the superintendent determines to be acceptable.

(D) Notwithstanding any subsequent failure of an issuing or confirming financial institution to meet the standards of issuer acceptability set forth in division (C)(3) of this section, a letter of credit issued or confirmed by a financial institution that meets those standards on the date of the issuance or confirmation shall continue to be acceptable as security until its expiration, extension, renewal, modification, or amendment, whichever occurs first.

Effective Date: 06-29-1994

3901.64 Terms of reinsurance or security agreement.

(A) A domestic ceding insurer may take credit for any reinsurance ceded as provided in sections 3901.61 to 3901.63 of the Revised Code only if the reinsurance agreement contained in the reinsurance contract, and any agreement that provides security for the payment of the obligations under the reinsurance agreement, including any trust agreement, provide, in substance, for the following:

(1) In the event of the insolvency of the ceding insurer, the reinsurance, whether paid directly or from trust assets securing the reinsurance agreement, shall be payable by the assuming insurer on the basis of the liability of the ceding insurer under the policy or contract reinsured, without any diminution because the ceding insurer is insolvent or because the liquidator or statutory receiver has failed to pay all or any portion of any claims;

(2) The reinsurance payments, whether paid directly or from trust assets securing the reinsurance agreement, shall be made by the assuming insurer directly to the ceding insurer, or in the event of its insolvency or liquidation, to its liquidator or statutory receiver except where the reinsurance contract or other written agreement specifically provides for direct payment of the reinsurance to the insured or beneficiary of the insurance policy in the event of the insolvency of the ceding insurer.

(B)

(1) The reinsurance agreement may provide that the domiciliary liquidator or statutory receiver shall give written notice to the assuming insurer that a claim is pending against the ceding insurer on the policy or contract reinsured. The notice shall be given within a reasonable amount of time after the claim is filed with the liquidator or statutory receiver. During the pendency of the claim, any assuming insurer may investigate the claim and interpose, at its own expense, in the proceeding where the claim is to be adjudicated any defenses which it deems to be available to the ceding insurer or its liquidator.

(2) The expense may be filed as a claim against the insolvent ceding insurer to the extent of a proportionate share of the benefit that may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer. Where two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose a defense to the claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though the expense had been incurred by the ceding insurer.

Effective Date: 10-31-2001

3901.65 Rules.

The superintendent of insurance may adopt rules, in accordance with Chapter 119. of the Revised Code, to carry out the purposes of sections 3901.61 to 3901.65 of the Revised Code, including a rule regarding the standards of acceptability of letters of credit and other forms of security for purposes of division (C) of section 3901.63 of the Revised Code.

Effective Date: 06-29-1994

3901.67 Disclosure of material transactions model act definitions.

As used in sections 3901.67 to 3901.70 of the Revised Code:

(A) "Material acquisition" means an acquisition, or a series of related acquisitions during any thirty-day period, that is nonrecurring and not in the ordinary course of business and involves more than five per cent of the reporting insurer's total admitted assets as reported in its most recent statutory financial statement filed with the department of insurance.

(B) "Material disposition" means a disposition, or a series of related dispositions during any thirty-day period, that is nonrecurring and not in the ordinary course of business and involves more than five per cent of the reporting insurer's total admitted assets as reported in its most recent statutory financial statement filed with the department of insurance.

(C) "Material nonrenewal, cancellation, or revision of ceded reinsurance agreements" means a nonrenewal, cancellation, or revision of ceded insurance that affects more than fifty per cent of an insurer's ceded written premium, or more than fifty per cent of an insurer's total ceded indemnity and loss adjustment reserves, for property and casualty business, including accident and health business when written as such. "Material nonrenewal, cancellation, or revision of ceded reinsurance agreements" also means a nonrenewal, cancellation, or revision of ceded insurance that affects more than fifty per cent of the total reserve credit taken for business ceded for life, annuity, and accident and health business, where the ceded written premium or total reserve credit taken is calculated on an annualized basis as indicated in the insurer's most recently filed statutory financial statement.

A nonrenewal, cancellation, or revision of ceded insurance is not material for property and casualty business, including accident and health business when written as such, if the insurer's total ceded written premium represents, on an annualized basis, less than ten per cent of its total written premium for direct and assumed business. A nonrenewal, cancellation, or revision of ceded insurance is not material for life, annuity, and accident and health business, if the total reserve credit taken for business ceded represents less than ten per cent of the statutory reserve requirements prior to any cession.

Effective Date: 03-03-1996

3901.68 Provisions application.

Sections 3901.67 to 3901.70 of the Revised Code apply to all of the following:

(A) Asset acquisitions, including every purchase, lease, exchange, merger, consolidation, succession, or other acquisition other than the construction or development of real property by or for the reporting insurer, or the acquisition of materials for such purpose.

(B) Asset dispositions, including every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment whether for the benefit of creditors or otherwise, abandonment, destruction, or other disposition.

(C) Nonrenewals, cancellations, or revisions of ceded reinsurance, without regard to which party has initiated the transaction, whenever one or more of the following conditions exists:

(1) The entire cession has been canceled, and nonrenewed or revised and ceded indemnity and loss adjustment expense reserves after any nonrenewal, cancellation, or revision represents less than fifty per cent of the comparable reserves that would have been ceded had the nonrenewal, cancellation, or revision not occurred.

(2) An authorized reinsurer has been replaced on an existing cession by an unauthorized reinsurer, and the revision affects more than ten per cent of the cession.

(3) Collateral requirements previously established for unauthorized reinsurers have been reduced, and the revision affects more than ten per cent of the cession.

Effective Date: 03-03-1996

3901.69 Insurer to report material transactions.

(A) Each insurer domiciled in this state shall file a report with the superintendent of insurance disclosing material acquisitions and material dispositions of assets, and material nonrenewals, cancellations, or revisions of ceded reinsurance agreements, unless such transactions previously have been reported to the superintendent for review, approval, or information purposes, pursuant to another provision of Title XXXIX [39] of the Revised Code. The report shall be in the form prescribed by the superintendent by rule. One complete copy of the report, including any exhibits and attachments, shall be filed with the superintendent within fifteen days after the end of the calendar month in which any of the transactions occurs.

(B) Each report of a material acquisition or disposition of assets shall include the following information:

(1) The date of the transaction;

(2) The manner of acquisition or disposition;

(3) A description of the assets involved;

(4) The nature and amount of the consideration given or received;

(5) The purpose of, or reason for, the transaction;

(6) The manner by which the amount of consideration was determined;

(7) The gain or loss recognized or realized as a result of the transaction;

(8) The names of the person or persons from whom the assets were acquired or to whom they were disposed.

(C) Each insurer shall report material acquisitions and material dispositions on a nonconsolidated basis, unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or a one hundred per cent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer has ceded substantially all of its direct and assumed business to the pool. The insurer is deemed to have ceded substantially all of its direct and assumed business to the pool if both of the following apply:

(1) The insurer has less than one million dollars total direct plus assumed written premiums during a calendar year that are not subject to the pooling arrangement;

(2) The net income of the insurer that is not subject to the pooling arrangement represents less than five per cent of the insurer's capital and surplus.

(D) Each report of a material nonrenewal, cancellation, or revision of ceded reinsurance agreements shall include the following information:

(1) The effective date of the nonrenewal, cancellation, or revision;

(2) A description of the transaction;

(3) The purpose of, or reason for, the transaction;

(4) If applicable, the identity of the replacement reinsurers;

(5) The identity of the person initiating the transaction.

(E) Each insurer shall report all material nonrenewals, cancellations, or revisions of ceded reinsurance agreements on a nonconsolidated basis, unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or a one hundred per cent reinsurance agreement that affects the solvency and integrity of the insurer's reserves and the insurer has ceded substantially all of its direct and assumed business to the pool. The insurer is deemed to have ceded substantially all of its direct and assumed business to the pool if both of the following apply:

(1) The insurer has less than one million dollars total direct plus assumed written premiums during a calendar year that are not subject to the pooling arrangement;

(2) The net income of the insurer that is not subject to the pooling arrangement represents less than five per cent of the insurer's capital and surplus.

Effective Date: 03-03-1996

3901.70 Confidentiality of reports - exceptions.

(A) Each report obtained by or disclosed to the superintendent of insurance pursuant to sections 3901.67 to 3901.70 of the Revised Code is confidential and privileged and is not subject to subpoena. Except as provided in division (B) of this section, the report shall not be made public by the superintendent or any other persons.

(B) Notwithstanding division (A) of this section, the superintendent may do any of the following:

(1) Disclose a report that is the subject of this section upon obtaining a prior written consent from the insurer to which the report pertains;

(2) Share a report that is the subject of this section with the chief deputy rehabilitator, the chief deputy liquidator, other deputy rehabilitators and liquidators, and any other person employed by, or acting on behalf of, the superintendent pursuant to Chapter 3901. or 3903. of the Revised Code, with other local, state, federal, and international regulatory and law enforcement agencies, with local, state, and federal prosecutors, and with the national association of insurance commissioners and its affiliates and subsidiaries, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged report and has authority to do so;

(3) Disclose a report that is the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent or the state, resulting from the exercise of the superintendent's official duties;

(4) Disclose or publish all or any part of a report that is the subject of this section in such a manner as the superintendent considers appropriate after conducting a hearing in accordance with Chapter 119. of the Revised Code and determining that the interests of policyholders, shareholders, or the public will be served by the disclosure or publication of the report.

(C) Notwithstanding divisions (A) and (B) of this section, the superintendent may authorize the national association of insurance commissioners and its affiliates and subsidiaries by agreement to share confidential or privileged reports received pursuant to division (B)(2) of this section with local, state, federal, and international regulatory and law enforcement agencies and with local, state, and federal prosecutors, provided that the recipient agrees to maintain the confidential or privileged status of the confidential or privileged report and has authority to do so.

(D) Notwithstanding divisions (A) and (B) of this section, the chief deputy rehabilitator, the chief deputy liquidator, and other deputy rehabilitators and liquidators may disclose a report that is the subject of this section in the furtherance of any regulatory or legal action brought by or on behalf of the superintendent, the rehabilitator, the liquidator, or the state resulting from the exercise of the superintendent's official duties in any capacity.

(E) Nothing in this section shall prohibit the superintendent from receiving reports in accordance with section 3901.045 of the Revised Code.

(F) The superintendent may enter into agreements governing the sharing, use, and disclosure of reports consistent with the requirements of this section.

(G)

(1) No waiver of any applicable privilege or claim of confidentiality in the reports that are the subject of this section shall occur as a result of sharing or receiving reports as authorized in divisions (B)(2), (C), and (E) of this section.

(2) The disclosure of a report in connection with a regulatory or legal action pursuant to divisions (B)(3) and (D) of this section does not prohibit an insurer or any other person from taking steps to limit the dissemination of the report to persons not involved in or the subject of the regulatory or legal action on the basis of any recognized privilege arising under any other section of the Revised Code or the common law.

Effective Date: 06-18-2002

3901.71 Application of mandated health benefits.

(A) As used in this section, "mandated health benefits" means any required coverage, or required offering of coverage, for the expenses of specified services, treatments, or diseases under any policy, contract, plan, or other arrangement providing sickness and accident or other health benefits to policyholders, subscribers, or members.

(B) Any provision for mandated health benefits contained in a law enacted by the general assembly after January 14, 1993, shall not be applied to any policy, contract, plan, or other arrangement providing sickness and accident or other health benefits until the superintendent of insurance determines, pursuant to a hearing conducted in accordance with Chapter 119. of the Revised Code, that the provision can be applied fully and equally in all respects to employee benefit plans subject to regulation by the federal "Employee Retirement Income Security Act of 1974," 88 Stat. 832, 29 U.S.C.A. 1001, as amended, and to employee benefit plans established or modified by the state or any political subdivision of the state, or by any agency or instrumentality of the state or any political subdivision of the state.

Effective Date: 11-24-1995

3901.72 Money advanced to insurance company or health insuring corporation.

Any person may advance to a domestic insurance company or a health insuring corporation any sum of money necessary for the purpose of the insurance company's or health insuring corporation's business, or to enable the insurance company or health insuring corporation to comply with any law, or as a cash guarantee fund. Such money, and interest agreed upon, shall not be a liability or claim against the insurance company or health insuring corporation, or any of its assets, except as provided in this section, and shall be repaid only out of the surplus earnings of such insurance company or health insuring corporation. Except as ordered by the superintendent of insurance, no part of the principal or interest thereof shall be repaid until the surplus of the insurance company or health insuring corporation remaining after such repayment is equal in amount to the principal of the money so advanced. Such advancement and repayment shall be subject to the approval of the superintendent, provided that this section shall not affect the power to borrow money which any such insurance company or health insuring corporation possesses under other laws. No commission or promotion expenses shall be paid by the insurance company or health insuring corporation, in connection with the advance of any such money to the insurance company or health insuring corporation, and the amount of any such unpaid advance shall be reported in each annual statement.

Effective Date: 09-26-2003

3901.73 Department to forward copy of late filing notice to board of directors.

The department of insurance shall forward a copy of any written notice received from any insurance company or health insuring corporation domiciled in this state that the insurer or health insuring corporation will be late in making the filing of any quarterly or annual financial statement, required under Title XXXIX [39] or Chapter 1751. of the Revised Code, to the board of directors of the insurer or health insuring corporation required to file the financial statement. The department shall also provide the board the date on which the department received the notice.

Effective Date: 06-18-2002

3901.74 Notice of life insurance company discontinuing business.

When a life insurance company doing business in this state decides to discontinue its business, the superintendent of insurance upon the application of the company or association shall give notice, at its expense, of such intention at least once a week for six weeks in a newspaper published and of general circulation in the county in which the company or its general agency is located. After such publication, the superintendent shall deliver to the company or association its securities held by the superintendent, if the superintendent is satisfied on an exhibition of its books and papers, and on an examination made by the superintendent or by some competent, disinterested person appointed by the superintendent, and upon the oath of the president or principal officer and the secretary or actuary of the company, that all debts and liabilities due or to become due upon any contract or agreement made with any citizen or resident of the United States are paid and extinguished. The superintendent may deliver to the company or association or its assigns any portion of the securities on being satisfied that an equal proportion of the debts and liabilities due or to become due upon any such contract or agreement have been satisfied, if the amount of securities retained by the superintendent is not less than twice the amount of the remaining liabilities.

Effective Date: 09-01-2002

3901.75 Notice of insurance companies other than life discontinuing business.

When any insurance company or corporation other than life, which company or corporation has made a deposit with the superintendent of insurance, intends to discontinue its business in this state, the superintendent, upon the application of the company or corporation, shall give notice at its expense of such intention at least once a week for six weeks in three newspapers of general circulation in the state.

After such publication, the superintendent shall deliver to the company or association its securities held by the superintendent, if the superintendent is satisfied by the affidavits of the principal officers of the company, and on an examination made by the superintendent or by some competent, disinterested person appointed by the superintendent if the superintendent deems it necessary, that all liabilities and obligations which the deposit has been made to secure have been paid and extinguished. The superintendent may deliver to the company or its assigns, under like condition, any portion of the securities on being satisfied that an equal proportion of the liabilities and obligations have been satisfied, if the amount of securities retained by the superintendent is not less than twice the amount of the remaining liabilities and obligations.

Effective Date: 09-01-2002

3901.76 Security valuation expense fund.

As used in this section, "securities" means the stocks, bonds, debentures, and other assets subject from time to time to valuation by the committee on valuation of securities of the national association of insurance commissioners.

For the purpose of enabling the superintendent of insurance to secure the analyses, reports, and information developed by the committee on valuation of securities of the national association of insurance commissioners and to pay for such information by cooperating with other states in defraying the expenses of the committee in the investigation, analysis, and valuation of securities and the determination of amortizability of bonds owned by life insurance companies for the purpose of furnishing to the several states on a uniform basis the information needed in the supervision of insurance companies licensed to transact business in the several states, there is hereby created in the state treasury the security valuation expense fund.

The superintendent may collect and disburse, in cooperation with supervisory officials of other states, the moneys obtained through assessments as provided in this section. All moneys which are paid into the fund shall be used only for the purpose of this section.

The superintendent may contract with the committee to make available to the department of insurance the analyses, reports, and information developed by the committee and, after taking into consideration similar payments that may be made by other states, may make payment to the committee to the extent authorized by this section, on account of the expenses of the committee, from the fund.

The superintendent shall periodically obtain from the committee a verified budget estimate of the receipts and of the expenses to be incurred by the committee for a stated period, not exceeding one year, with appropriate explanations of the estimates therein contained.

If the superintendent is satisfied as to the reasonableness of the budget estimate, the superintendent shall determine the portion of the moneys required by the budget estimate, to be assessed as provided in this section, by deducting from the budget estimate or from the sum of two hundred fifty thousand dollars, whichever is less, any amounts received or receivable by the committee from states with laws that do not substantially conform to the method of assessment provided in this section and applying to the remainder the proportion that the total investments in securities of domestic life insurers bear to the total investments in securities of life insurers domiciled in this and other states with laws that authorize and require assessments on substantially the same basis as provided in this section. The superintendent shall thereafter, as soon as convenient, by notice stating the method of computation thereof, assess the amount to be paid on account of such expenses, pro rata upon all domestic life insurers in the proportion that the total investments in securities of each domestic life insurer bear to the total investments in securities of all domestic life insurers. The total investments in securities of any life insurer for purposes of this section shall be the total admitted value of the securities reported as such in its annual statement last filed prior to such assessment with the department or with the supervisory officials of its state of domicile. Upon receipt of the notice each domestic life insurance company shall within thirty days thereafter pay the amount of the assessment to the superintendent, who shall deposit the amount in the state treasury to the credit of the fund. The superintendent shall make such disbursements from the fund in amounts and at the times determined by the superintendent under the superintendent's contract with the committee.

The superintendent shall require annually, and at such other times as the superintendent considers necessary or advisable, a duly certified audit of receipts and disbursements and statement of assets and liabilities, showing the details of the financial operations of the committee.

Effective Date: 09-01-2002

3901.77 Forms, instructions, manuals - determination of accounting practices and methods.

(A) The superintendent of insurance shall adopt the forms, instructions, and manuals prescribed by the national association of insurance commissioners, for the preparation and filing of statutory financial statements and other financial information. However, the superintendent may by rule adopt modifications to the prescribed forms, instructions, and manuals as the superintendent considers necessary.

(B) For circumstances not addressed by the forms, instructions, and manuals prescribed by the national association of insurance commissioners, the superintendent may determine accounting practices and methods for purposes of preparing statutory financial statements and other financial information.

(C) The superintendent shall furnish each domestic insurance company the forms for the filing of statutory financial statements and other financial information required to be made by it.

Effective Date: 09-01-2002

3901.78 Certificate of compliance.

Upon request or in any other circumstance that the superintendent of insurance determines to be appropriate, the superintendent may issue certificates of compliance to insurance companies and associations authorized to do business in this state, which shall be on either forms established by the national association of insurance commissioners or on such other forms as the superintendent may prescribe.

Effective Date: 07-02-2004; 09-29-2005

3901.781 [Repealed].

Effective Date: 09-29-2005

3901.782 [Repealed].

Effective Date: 09-29-2005

3901.783 [Repealed].

Effective Date: 09-29-2005