On what basis does the director exercise discretion in conducting examinations?

The director exercises discretion in conducting examinations primarily based on financial and operational factors. This approach allows the director to assess and evaluate the financial health and operational practices of insurers comprehensively. By considering these factors, the director can determine the level of scrutiny needed for different companies, ensuring that resources are allocated efficiently and that any potential risks are identified and mitigated effectively.

This basis for discretion is important because it enables the director to maintain oversight that is relevant to the current environment in the insurance market, ensuring that examinations align with the unique circumstances faced by each insurer. It emphasizes the regulatory mandate to protect policyholders and ensure the solvency of insurance providers.

While industry standards and customer complaints might influence the regulatory environment, they do not serve as the primary basis for the director's discretion in performing examinations. Similarly, examinations are not exclusively conducted on a case-by-case request from insurers, which would limit the proactive oversight necessary for effective regulation. Thus, the comprehensive approach rooted in financial and operational evaluation is crucial for maintaining a robust and responsive regulatory framework.