Section 27-2-24

Examinations - Report; confidentiality of information.

(a) The commissioner, or his or her examiner, shall make a full and true written report of each examination. The examination report shall contain only information obtained from examination of the books, records, accounts, files, or other documents of, or relative to, the person examined, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, together with conclusions and recommendations as the examiners find reasonable warranted from the facts.

(b) No later than 60 days following completion of the examination, the examiner in charge shall file with the department a verified written report of examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice that the company examined may make a written submission or rebuttal with respect to any matter contained in the examination report within 30 days thereafter.

(c) Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's workpapers and enter one of the following:

(1) An order adopting the examination report as filed or with modifications or corrections. If the examination report reveals that the company is operating in violation of any law, regulation, or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure the violation.

(2) An order rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation, or information, and refiling pursuant to subsection (a).

(3) An order calling for an investigatory hearing with no less than 20 days' notice to the company for purposes of obtaining additional documentation, data, information, and testimony.

(d) Orders entered pursuant to subdivision (1) of subsection (c) shall be accompanied by findings and conclusions resulting from the commissioner's consideration and review of the examination report, relevant examiner workpapers, and any written submissions or rebuttals. An order shall be considered a final administrative decision and shall be served upon the company by certified mail. The order may be appealed pursuant to Section 27-2-32.

(e) The examination report, when adopted, shall be admissible in evidence in any action or proceeding brought by the commissioner against the person examined, or against its officers, employees or agents. The commissioner or his examiners may, at any time, testify and offer other proper evidence as to information secured or matters discovered during the course of an examination, whether or not a written report of the examination has been either made, furnished, or filed in the department.

(f)(1) Upon the adoption of the examination report under subdivision (1) of subsection (c), the commissioner shall hold the content of the examination report as private and confidential information for a period of 20 days except to the extent provided in subsection (b). Thereafter, the commissioner may open the report for public inspection unless a court of competent jurisdiction has stayed its publication; however, the commissioner may withhold from public inspection any examination or investigation report for so long as the commissioner deems necessary to protect the person examined from unwarranted injury or to be in the public interest.

(2) Nothing contained in this section shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this section.

(3) In the event the commissioner determines that regulatory action is appropriate as a result of an examination, the commissioner may initiate any proceedings or actions provided by law.

(g)(1) Except as provided in subsection (f) and this subsection, documents, materials, or other information in the possession or control of the commissioner or the Department of Insurance, 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 chapter, or in the course of analysis by the commissioner of the financial condition or market conduct of a company, and documents or exhibits which contain information regarding the compensation of the officers or employees of a company as required by the instructions for annual statements filed in accordance with Section 27-3-26, 27-21A-8, 27-31-16, 27-34-36, or 10A-20-6.14, shall be confidential by law and privileged, shall not be subject to any open records, freedom of information, sunshine, or other public record disclosure laws, and shall not be subject to subpoena. However, the commissioner may 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.

(2) Documents, materials, or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the NAIC shall be confidential by law and privileged, shall not be subject to any open records, freedom of information, sunshine, or other public record disclosure laws, and shall not be subject to subpoena, if they are either of the following:

a. Created, produced, or obtained by or disclosed to the NAIC in the course of the NAIC assisting an examination made under this chapter, or assisting a commissioner in the analysis of the financial condition or market conduct of a company.

b. Disclosed to the NAIC under subdivision (4) by a commissioner.

(3) Neither the commissioner nor any person who received the documents, material, or other information while acting under the authority of the commissioner, including the NAIC, shall be permitted to testify in any private civil action concerning any confidential documents, materials, or information subject to subdivision (2).

(4) In order to assist in the performance of the commissioner's duties, the commissioner may do all of the following:

a. Share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subsection (f), with other state, federal, and international regulatory agencies, with the NAIC, 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.

b. Receive documents, materials, communications, or information, including otherwise confidential and privileged documents, materials, or information from the NAIC and from regulatory and law enforcement officials of other foreign or domestic jurisdictions. The commissioner 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.

c. Enter into written agreements governing sharing and use of information consistent with this subsection.

(5) 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 section or as a result of sharing as authorized in subdivision (4).

(6) For purposes of this subsection, NAIC shall mean the National Association of Insurance Commissioners and its affiliates and subsidiaries.

(Acts 1971, No. 407, p. 707, §39; Act 2015-227, §1.)