The State of New Jersey
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Steps in the Market Conduct Process

Step 1 - A company is selected for a market conduct examination. Selection factors may be based on an increase in complaint volume, an increase in the frequency of complaints on a particular issue, the findings of a prior exam, a change in the company's market presence or the length of time since the last exam.

Step 2 - A market conduct exam "call letter" is issued to the targeted company. The letter announces the Department's intention to conduct the examination, explains what operations and types of information the examiners will review, requests data and copies of procedures and manuals to be provided prior to the exam and explains the office accommodations and additional information the examiners will need on-site.

Step 3 - A Pre-examination conference is held with the company's exam coordinator and key personnel to clarify expectations and discuss anticipated issues.

Step 4 - On-site fieldwork begins. Depending on the type of exam, this process can include reviews of claim and policyholder files, company systems and billing, underwriting and claim data. When the examiners find information that may not be in accordance with our laws or requires further elaboration from the company, they will issue written inquiries requesting explanations or further information about the preliminary findings or errors. This procedure assures the validity of the exam findings and provides the company an opportunity to explain and document their position.

Step 5 - An "exit conference" with the company is held at conclusion of the on-site examination. During this meeting the examiners discuss major findings and the remaining steps to complete the examination.

Step 6 - The post-fieldwork review includes analysis of information examined, review of files or other information taken off-site and a review of any outstanding data requests.

Step 7 - Under the direction of the examiner-in-charge, the exam team finalizes the draft examination report. This is reviewed internally by management staff.

Step 8 - The draft examination report is issued to company for review and comment. Companies are provided 30 days to respond.

Step 9 -The company response is reviewed and any changes appropriately supported in the company response are made to the draft. The Assistant Commissioner then prepares a recommendation to the Commissioner to adopt the report.

Step 10 - The Commissioner reviews and approves the adoption recommendation and the Adopted Report is issued to the Company. The report is organized in a standard format. Errors are identified along with recommendation to remediate and prevent recurring errors. The company is generally provided 30 days to implement these recommendations and report back to the Department.

Step 11 - Enforcement issues arising from the examination findings are thereafter considered and pursued with the company, as appropriate.

OPRA is a state law that was enacted to give the public greater access to government records maintained by public agencies in New Jersey.
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New Jersey Department of Banking and Insurance