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Regular Session, 2010
SENATE BILL NO. 676
BY SENATOR HEBERT
INSURANCE RATES. Provide for financial and market analysis of insurers and regulated
entities by the commissioner of insurance. (8/15/10)
AN ACT1
To amend and reenact R.S. 22:1984 and R.S. 44:4.1(B)(10), relative to examination and2
investigation of insurers and regulated entities; to provide for financial and market analysis3
of insurers and regulated entities; to provide for penalties; to provide for confidentiality; to4
provide for standards and procedures; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 22:1984 is hereby amended and reenacted to read as follows: 7
§1984. Commissioner of insurance to conduct annual office review financial and8
market analysis of insurers and regulated entities9
A. In addition to those examinations performed by the commissioner of10
insurance pursuant to R.S. 22:1981, the commissioner of insurance shall conduct an11
annual office financial and market analysis review of all insurers authorized to do12
business in this state, other than life, health, and accident insurers and nonprofit13
funeral associations and may conduct regulatory reviews of entities regulated by14
Title 22 or the Department of Insurance. Such office reviews shall include the15
annual statement and the market conduct annual statement of the insurer or16
regulated entity reviewed, company financial reports rendered pursuant to good and17 SB NO. 676
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acceptable accounting practices, results of insurance solvency standards testing as1
performed by the National Association of Insurance Commissioners, results of prior2
examinations and office reviews, management changes, consumer complaints, and3
such other relevant information as from time to time may be required by the4
commissioner.5
B. In lieu of conducting a financial or market analysis under this Section6
of any foreign or alien insurer licensed in this state, the commissioner may rely7
upon the financial or market analysis conducted by the insurance department8
for the company's state of domicile or port-of-entry state accredited under the9
National Association of Insurance Commissioners' Financial Regulation10
Standards and Accreditation Program. The commissioner shall timely furnish to11
each reviewed insurer a written report detailing the findings of each such annual12
review. Within forty-five days of its receipt of such written report, each reviewed13
insurer shall provide to the commissioner such response, rebuttal, explanation, or14
other information as it may see fit. The commissioner shall furnish to any person,15
upon request, a copy of the written report, accompanied by a copy of the response,16
rebuttal, explanation, or other information provided by the reviewed insurer.17
C. Failure by an insurer or regulated entity to supply information18
requested by the Department of Insurance during the course of financial or19
market analysis shall subject the insurer or regulated entity to revocation or20
suspension of its license, or, in lieu thereof, a fine not to exceed ten thousand21
dollars per occurrence.22
D. All working papers, recorded information, documents, and copies23
thereof produced by, obtained by, or disclosed to the commissioner, or any24
other person in the course of conducting a regulatory review, financial, or25
market analysis performed under this Section, shall be given confidential26
treatment and are not subject to subpoena and may not be made public by the27
commissioner or any other person, except that any access may be granted to the28
National Association of Insurance Commissioners, insurance department of29 SB NO. 676
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other states, international, federal, or state law enforcement agencies or1
international, federal, or state regulatory agencies with statutory oversight over2
the financial services industry, if the recipient agrees to maintain the3
confidentiality of those documents which are confidential under the laws of this4
state.5
E. In conducting financial or market analysis, the examiner or6
examiners shall observe those guidelines and procedures set forth in the7
Financial Analysis Handbook or Market Regulation Handbook adopted by the8
National Association of Insurance Commissioners. The commissioner may also9
employ such other guidelines or procedures as the commissioner may deem10
appropriate.11
F. Nothing contained in this Chapter shall be construed to limit the12
commissioner's authority to use any final or preliminary analysis findings, any13
Department of Insurance or company work papers or other documents, or any14
other information discovered or developed during the course of any analysis in15
the furtherance of any legal or regulatory action which the commissioner may,16
in his sole discretion, deem appropriate.17
G. Any insurer or regulated entity against whom a fine has been levied18
shall be given ten days notice of such action. Upon receipt of this notice, the19
aggrieved insurer or regulated entity may apply for and shall be entitled to a20
hearing pursuant to R.S. 22:2191, et seq.21
Section 2. R.S. 44:4.1(B)(10) is hereby amended and reenacted to read as follows:22
§44:4.1. Exceptions23
* * *24
B. The legislature further recognizes that there exist exceptions, exemptions,25
and limitations to the laws pertaining to public records throughout the revised26
statutes and codes of this state. Therefore, the following exceptions, exemptions, and27
limitations are hereby continued in effect by incorporation into this Chapter by28
citation:29 SB NO. 676
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* * *1
(10) R.S. 22:2, 14, 42.1, 88, 244, 461, 572, 574, 628, 706, 732, 752, 1203,2
1460, 1466, 1546, 1644, 1656, 1723, 1929, 1983, 1984, 2036, 23033
* * *4
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Mary Dozier O'Brien.
DIGEST
Present law requires the commissioner of insurance to conduct an annual review of all
insurers in the state other than life, health, and accident insurers and non-profit funeral
associations.
Proposed law removes the current restrictions and requires that the commissioner conduct
financial and market analysis of all insurers licensed to do business in the state and conduct
regulatory reviews of any entities regulated by the Department of Insurance or regulated
under Title 22. Proposed law requires that such reviews include the market conduct annual
statement of the insurer or regulated entity.
Proposed law removes the present law requirement that the commissioner timely furnish to
each insurer a report detaining the finding of the annual review and for the insurer to send
a response to the commission within 45 days.
Proposed law provides that in the case of a foreign insurer licensed in the state, the
commissioner may rely upon the financial or market analysis conducted under the National
Association of Insurance Commissioners' Financial Regulation Standards and Accreditation
Program.
Proposed law provides that failure of an insurer or regulated entity to provide requested
information to the department during such financial or market analysis shall subject the
insurer or regulated entity to revocation or suspension of license or a fine.
Proposed law provides that all working papers, recorded information, documents and copies
of those documents utilized in the course of a regulatory review shall be given confidential
status and shall not be subject to a subpoena, except in specific circumstances.
Proposed law provides that in the conduct of these financial and market reviews guidelines
and procedures set forth in the Financial Analysis Handbook or the Market Regulation
Handbook shall be employed, subject to the commissioner's discretion.
Proposed law provides that nothing in proposed law shall be construed to limit the
commissioner's authority to use these findings in any legal or regulatory action which the
commissioner deems appropriate.
Proposed law provides for ten days notice to an insurer or regulated entity should any fine
be levied. SB NO. 676
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Present law provides exceptions to documents that are subject to the public records law.
Proposed law to the list of exceptions the financial and market analysis provided under
proposed law.
Effective August 15, 2010.
(Amends R.S. 22:1984 and R.S. 44:4.1(B)(10))