sb 0369

CHAPTER 155

SB 369 – FINAL VERSION

AN ACT relative to examinations of insurance companies by the insurance department.

SPONSORS: Sen. Flanders, Dist 7; Rep. Hunt, Ches 28

This bill amends the existing law regarding the conduct of examinations by the insurance department to conform to the National Association of Insurance Commissioners (NAIC) model.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to examinations of insurance companies by the insurance department.

Be it Enacted by the Senate and House of Representatives in General Court convened:

155:1 Insurance; Conduct of Examinations. Amend RSA 400-A:37, III(b)(1) to read as follows:

(b)(1) Every company or person from whom information is sought, its officers, directors and agents must provide to the examiners timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents and any or all computer or other recordings relating to the property, assets, business and affairs of the company being examined. The officers, directors, employees and agents of the company or person must facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension or refusal of, or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the commissioner's jurisdiction. Any such proceedings for suspension, revocation, or refusal of a license or authority shall be conducted pursuant to RSA 400-A:15, III.

155:2 New Paragraph; Insurance; Conduct of Examinations. Amend RSA 400-A:37 by inserting after paragraph IV the following new paragraph:

(a) Except as provided in subparagraph IV(c)(2) and in this subparagraph, documents, materials, or other information, including, but not limited to, all working papers, and copies thereof created, produced or obtained by or disclosed to the commissioner or any other person in the course of an examination made under this title, or in the course of analysis by the commissioner of the financial condition or market conduct of a company shall be confidential by law and privileged, shall not be subject to RSA 91-A, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as part of the commissioner’s official duties.

(b) Documents, materials, or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the National Association of Insurance Commissioners and its affiliates and subsidiaries shall be confidential by law and privileged, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action, if they are:

(1) Created, produced, or obtained by or disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries in the course of the National Association of Insurance Commissioners and its affiliates and subsidiaries assisting an examination made under this chapter, or assisting a commissioner in the analysis of the financial condition or market conduct of a company; or

(2) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under subparagraph (b)(1) by a commissioner.

(c) For the purposes of subparagraph (b), this chapter includes the law of another state or jurisdiction that is substantially similar to this chapter.

(d) Neither the commissioner nor any person who received the documents, material, or other information while acting under the authority of the commissioner, including the National Association of Insurance Commissioners and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials, or other information subject to subparagraphs (a) and (b).

(e) In order to assist in the performance of the commissioner’s duties, the commissioner:

(1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subparagraphs (a) and (b), with other state, federal, and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication, or other information. Such parties shall agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this paragraph, unless the prior written consent of the company to which it pertains has been obtained;

(2) May receive documents, materials, communications, or information, including otherwise confidential and privileged documents, materials, or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information; and

(3) May enter into agreements governing sharing and use of information consistent with this subparagraph.

(f) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the commissioner under this paragraph or as a result of sharing as authorized in subparagraph (e).

(g) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this paragraph shall be available and enforced in any proceeding in, and in any court of, this state.

(h) In this paragraph “department,” “insurance department,” “law enforcement agency,” “regulatory agency,” and the “National Association of Insurance Commissioners” include, but are not limited to, their employees, agents, consultants, and contractors.

155:3 New Paragraph; Conduct of Examinations; Immunity From Liability. Amend RSA 400-A:37 by inserting after paragraph VIII the following new paragraph:

(a) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner's authorized representatives, or an examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this chapter.

(b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner's authorized representative, or examiner pursuant to an examination made under this chapter, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive.

(c) This paragraph shall not abrogate or modify in any way common law or statutory privilege or immunity heretofore enjoyed by any person identified in subparagraph (a).

(d) A person identified in subparagraph (a) shall be entitled to an award of attorney’s fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For the purposes of this paragraph, a proceeding is “substantially justified” if it had a reasonable basis in law or fact at the time that it was initiated.