---
kind: "section"
citation: "45 C.F.R. § 150.313"
title: "45"
number: "150.313"
heading: "Market conduct examinations."
url: "https://uscodex.org/cfr/45/150.313"
---

# §150.313. Market conduct examinations.

- (a) **Definition.** A market conduct examination means the examination of health insurance operations of an issuer, or the operation of a non-Federal governmental plan, involving the review of one or more (or a combination) of a responsible entity's business or operational affairs, or both, to verify compliance with PHS Act requirements.
- (b) **General.** If, based on the information described in [§ 150.303](/cfr/45/150.303.md), CMS finds evidence that a specific entity may be in violation of a PHS Act requirement, CMS may initiate a market conduct examination to determine whether the entity is out of compliance. CMS may conduct the examinations either at the site of the issuer or other responsible entity or a site CMS selects. When CMS selects a site, it may direct the issuer or other responsible entity to forward any documentation CMS considers relevant for purposes of the examination to that site.
- (c) **Appointment of examiners.** When CMS identifies an issue that warrants investigation, CMS will appoint one or more examiners to perform the examination and instruct them as to the scope of the examination.
- (d) **Appointment of professionals and specialists.** When conducting an examination under this part, CMS may retain attorneys, independent actuaries, independent market conduct examiners, or other professionals and specialists as examiners.
- (e) **Report of market conduct examination—**
  - (1) **CMS review.** When CMS receives a report, it will review the report, together with the examination work papers and any other relevant information, and prepare a final report. The final examination report will be provided to the issuer or other responsible entity.
  - (2) **Response from issuer or other responsible entity.** With respect to each examination issue identified in the report, the issuer or other responsible entity may:
    - (i) Concur with CMS's position(s) as outlined in the report, explaining the plan of correction to be implemented.
    - (ii) Dispute CMS's position(s), clearly outlining the basis for its dispute and submitting illustrative examples where appropriate.
  - (3) **CMS's reply to a response from an issuer or other responsible entity.** Upon receipt of a response from the issuer or other responsible entity, CMS will provide a letter containing its reply to each examination issue. CMS's reply will consist of one of the following:
    - (i) **Concurrence with the issuer's or non-Federal governmental plan's position.**
    - (ii) **Approval of the issuer's or non-Federal governmental plan's proposed plan of correction.**
    - (iii) Conditional approval of the issuer's or non-Federal governmental plan's proposed plan of correction, which will include any modifications CMS requires.
    - (iv) Notice to the issuer or non-Federal governmental plan that there exists a potential violation of PHS Act requirements.

## Notes

### Amendments

[64 FR 45795, Aug. 20, 1999, as amended at 78 FR 13440, Feb. 27, 2013; 86 FR 24286, May 5, 2021]

### Authority

Authority: 42 U.S.C. 300gg through 300gg-63, 300gg-91, and 300gg-92, as amended.

### Source

Source: 64 FR 45795, Aug. 20, 1999, unless otherwise noted.

### Amendments

[64 FR 45795, Aug. 20, 1999, as amended at 78 FR 13440, Feb. 27, 2013; 86 FR 24286, May 5, 2021]