Program Evaluation Report - Maine.gov

Program Evaluation Report As Required by the Government Evaluation Act (3 MRSA § 955)

Submitted to the

Joint Standing Committee on Insurance and Financial Services And Joint Standing Committee on Business, Research and Economic Development

November 1, 2007

DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGU14TIQN

Program Evaluation Report

Table of Contents Department Overview Administration Services Division

3

Bureau of Financial Institutions

7

Bureau of Consumer Credit Protection

14

Bureau of Insurance

20

Office of Securities

39

Office of Licensing and Registration

49

Attachment A (Administrative Services Division)

65

Attachment B (Bureau of Financial Services)

68

Attachment C (Bureau of Consumer Credit Protection)

80

Attachment D (Bureau of Insurance)

91

Attaclunent E (Office of Securities)

100

Attachment F (Office of Licensing and Registration)

117

DEPARTMENT OF PROFESSIONAL AND FINANCIALKEGULATION

f)gpartment Overview The Department or Professional and Financial Regulation serves and protects the public through a broad range of statutorily-authorized responsibilities, such as examining and overseeing state-chartered financial institutions and bank holding companies; regulating insurance companies, agencies and producers; administering and enforcing the Maine Un iform Securities I\ct; regulating grantors of consumcr credit; and by licensing and regulating num erous professions and occupations. The Department protects Maine consumers through its licensing, examining and auditing activities. It conducts progTams aImed at increasing voluntary compliance with State laws, investigates possible violations of law and undertakes enforcement actions. The Department responds to consumer complaints and requests for information. Staff also conduct educational outreach programs to make consumers aware of their rights under Maine laws. During 2007, Department eCfOlis to provide services and resources to the public through online applications and public forums have been enhanced.

Mission Statement The mission o.lthe Department o.fPro.(essional and Financial Regulation is to encourage sound, ethical business practices through high quality, impartial and efficient regulation ofinsurers, .financial institutions, investment advisers, creditors and numerous professions and occupations/or the purpose o/protecting the citizens ofMaine.

History and Organization The Department or Business Regulation was created in October 1973 as part of State government reorganization dcsigntid to cOI1::iolidatc related age!1cies along functional lines and strengthen executive direction . Some of the agencies originally placed under the jurisdiction 01" the Department were the Bureau of Banking, the Bureau ofTnsufance, and th e Real Estate Com mission. The Special Session orthe 106th Legislature established the Bureau of Consumer Protection (recently renamed the Bureau or Consumer Credit Protection) to enforce the Maine Consumer Credit Code, which became efiective January 1, 1975. fn 1987 the name or the Department was changed to Professional and Financial Regulation. The special session of the 107th Legislature established a central licensing division, now called the Office of Licensing and Registration (OLR). Since that time, several new state licensing programs have been created and placed within OLR. Licensing programs have also been transfelTed to OLR fi'om other departments, and existing independent agencies have been moved into OLR. Today, the Office oversees 40 licensing programs.

Currently, the Department consists of a centralized Administrative Services Division which includes the Commissioner's ortice and 5 agencies: the Bureau of Financial Institutions (lCmnerly the Bureau of Banking), the Bl,m;:a.\l of Commmer Credit Protection (fonnerly the Office of Consumer Credit Regulation and renamed in 2007), the Bureau of Insurance, the Ortice of Securities, and the Office of Licensing and Registration. In addition to the 40 licensing programs directly administered by OLR, six professional licensing boards arc aCfiliated with the Department: the Board of Licensure in Medicine, the Maine State Board of Nursing, the Board of Dental Examiners, the Board of Registration for Professional Engineers, the Maine State Board of Optometry and the Board of Osteopathic Licensure. These "affiliated" boards are scheduled for review under the provisions of the Government Evaluation Act by the Joint Standing Committee on Business, Research and L::conomic Development in 20 II. Staffing Size anti Composition

With a position count of 20 I employees, the Department is relatively small compared to other cabinet-level agencies. Due to the complex nature of its regulatory activity, the Department employs professional and technical employees, including CPAs, actuaries, attorneys and licensed inspectors. Approximately 45 financial examiners and professional regulatory board inspedors arc on staft~ working primarily in the field. The Department emphasizes continuing professional education, training and development. The statT is highly motivated and dedicated to quality regulation and public servi ce. Department Funding Source

The Department is f'unded entirely through dedicated revenue sources. As a result, each organizational unit within the Department is funded by a combination of licensing, examination, assessment, volume and filing fees paid by the regulated individuals or entities. The Department contributes signi ficantly to the General Fund through the Office of Securities' registration & licensing fees , as well as fines collected from other Department agencies and periodic transfers of Other Special Revenue funds. Duting the past years, those transfers have totaled over $29 million .

2

DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION

ADM! ISTRA T/VE SERVICES DIVISIO

I A.

Enabling or Authorizing Law

The Administrative Service Division is authorized through 10 MRSA §8003.

I B.

Descr;ption of Programs

The Administrative Ser ices Division coordinate administrative and legislative support for all bur aus, oflicc. , boards and commissions within the Department. It also procures and facilitate. the Department's infonnation technology services. The Divi ion's central ized support covers such functions as budget development, contract review , purchases, ca h receipts, computer service, legislative upport, public communications, reception and facility management. The Division pro ides the ervices desclibed above for the entire Department. Additionally, the Di vision is responsible tor ordering and arranging for the ervices provided to all units by outside staff agencies including the Department of Administratl and Financial Service. - ervice enters the building owner and by pri ate partie and vendor. The Oi vi 'ion manag the development and administration or the Department' centralized li censing database. Technical Llpp0l1 for all Department comp uter services is provided by or procured through the Office of Information Techno logy. The Commissioner is the adm ini strative head of the Department. In this capacity, the Comm issioner provides cen trali zed budgeting coordination, initiates and monitors all polj and compliance examinations. The Department's policy is intended to raise the awa ren ess of empl oyees about the proper usc orSocial Securit y umber and personal information ; to prevent the il1disel'imili31 release of such persona l infonnalion; and lo eslab li sh a procedure lo assure that publi c and Freedom of I\ccess (FOI\) requests are made and responded to in acco rdance with the law.

5

Several factors make such awaren ss important. First, State law provides that in formation in the State's possession is generally ,wailable to the public unless it is deemed confidential by Lhe staluL