| 11 | 11 | | |
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| 12 | 12 | | AN ACT CONCERNING INSURANCE DEPARTMENT EXAMINATIONS OF MARKET CONDUCT ACTIVITY. |
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| 13 | 13 | | |
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| 14 | 14 | | Be it enacted by the Senate and House of Representatives in General Assembly convened: |
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| 15 | 15 | | |
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| 16 | 16 | | Section 1. Section 38a-15 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2013): |
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| 17 | 17 | | |
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| 18 | 18 | | (a) The commissioner shall, as often as the commissioner deems it expedient, undertake a market conduct examination of the affairs of any insurance company, health care center, third-party administrator, as defined in section 38a-720, or fraternal benefit society doing business in this state. |
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| 19 | 19 | | |
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| 20 | 20 | | (b) To carry out the examinations under this section, the commissioner may appoint, as market conduct examiners, one or more competent persons, [not officers] who shall not be officers of, or connected with or interested in, any insurance company, health care center, third-party administrator or fraternal benefit society, other than as a policyholder. In conducting the examination, the commissioner, the commissioner's actuary or any examiner authorized by the commissioner may examine, under oath, the officers and agents of such [an] insurance company, health care center, third-party administrator or fraternal benefit society and all persons deemed to have material information regarding the company's, center's, administrator's or society's property or business. Each such company, center, administrator or society, its officers and agents, shall produce the books and papers, in its or their possession, relating to its business or affairs, and any other person may be required to produce any book or paper [, in his] in such person's custody, deemed to be relevant to the examination, for the inspection of the commissioner, [his] the commissioner's actuary or examiners, when required. The officers and agents of the company, center, [or association] administrator or society shall facilitate the examination and aid the examiners in making the same so far as it is in their power to do so. |
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| 21 | 21 | | |
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| 22 | 22 | | (c) Each market conduct examiner shall make a full and true report of each market conduct examination made by such examiner, which shall comprise only facts appearing upon the books, papers, records or documents of the examined company, center, administrator or society or ascertained from the sworn testimony of its officers or agents or of other persons examined under oath concerning its affairs. The examiner's report shall be presumptive evidence of the facts therein stated in any action or proceeding in the name of the state against the company, center, administrator or society, its officers or agents. [The] Before filing such report, the commissioner shall grant a hearing to the company, center, administrator or society examined, [before filing any such report,] and may withhold any such report from public inspection for such time as the commissioner deems proper. The commissioner may, if [he] said commissioner deems it in the public interest, publish any such report, or the result of any such examination contained therein, in one or more newspapers of the state. |
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| 23 | 23 | | |
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| 24 | 24 | | [(d) All the expense of any examination made under the authority of this section, other than examinations of domestic insurance companies, shall be paid by the company, center or society examined, and domestic insurance companies and other domestic entities examined outside the state shall pay the traveling and maintenance expenses of examiners.] |
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| 25 | 25 | | |
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| 26 | 26 | | (d) (1) The commissioner may engage the services of attorneys, actuaries, accountants and other experts not otherwise part of the commissioner's staff as may be necessary to assist the commissioner in conducting the examinations under this section, the cost of which shall be borne by the company, center, administrator or society that is the subject of the examination. |
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| 27 | 27 | | |
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| 28 | 28 | | (2) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner's authorized representative or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this section. |
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| 29 | 29 | | |
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| 30 | 30 | | (3) 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 section, if such act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. |
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| 31 | 31 | | |
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| 32 | 32 | | (4) This section shall not abrogate or modify any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (2) of this subsection. |
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| 33 | 33 | | |
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| 34 | 34 | | (5) A person identified in subdivision (2) of this subsection shall be entitled to an award of attorney's fees and costs if such person is the prevailing party in a civil action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this section and the party bringing the action was not substantially justified in doing so. For the purposes of this section, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated. |
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| 35 | 35 | | |
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| 36 | 36 | | (e) Notwithstanding subdivision (1) of subsection (d) of this section, no domestic insurance company or other domestic entity subject to examination under this section shall pay, as costs associated with the examination, the salaries, fringe benefits and travel and maintenance expenses of examining personnel of the Insurance Department engaged in such examination if such company or entity is otherwise liable to an assessment levied under section 38a-47, except that a domestic insurance company or other domestic entity shall pay the travel and maintenance expenses of examining personnel of the Insurance Department when such company or entity is examined outside the state. |
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| 37 | 37 | | |
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| 38 | 38 | | (f) Nothing in this section shall be construed to prevent or prohibit the commissioner from disclosing the content of an examination report, preliminary examination report or results or any matter relating thereto to (1) the insurance regulatory officials of this or any other state or country, (2) law enforcement officials of this or any other state, or (3) any agency of this or any other state or of the federal government, at any time, provided such officials or agency receiving the report or matters relating thereto agrees, in writing, to hold such report or matters confidential. |
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| 39 | 39 | | |
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| 40 | 40 | | (g) All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this section shall be given confidential treatment, shall not be subject to subpoena and shall not be made public by the commissioner or any other person, except to the extent provided in subsection (f) of this section. Access to such working papers, recorded information, documents and copies may be granted by the commissioner to the National Association of Insurance Commissioners as long as it agrees, in writing, to hold such working papers, recorded information, documents and copies confidential. |
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| 41 | 41 | | |
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| 42 | 42 | | |
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| 43 | 43 | | |
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| 44 | 44 | | |
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| 45 | 45 | | This act shall take effect as follows and shall amend the following sections: |
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| 46 | 46 | | Section 1 October 1, 2013 38a-15 |
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| 47 | 47 | | |
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| 48 | 48 | | This act shall take effect as follows and shall amend the following sections: |
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| 49 | 49 | | |
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| 50 | 50 | | Section 1 |
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| 51 | 51 | | |
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| 52 | 52 | | October 1, 2013 |
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| 53 | 53 | | |
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| 54 | 54 | | 38a-15 |
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| 55 | 55 | | |
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| 56 | 56 | | |
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| 57 | 57 | | |
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| 58 | 58 | | INS Joint Favorable Subst. |
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