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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 except for trusts established and15
operated under R.S. 22:46(9)(b),(c), or (d). Such office reviews shall may include16
the annual statement and the market conduct annual statement of the insurer or17 SB NO. 676
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regulated entity reviewed, company financial reports rendered pursuant to good and1
acceptable accounting practices, results of insurance solvency standards testing as2
performed by the National Association of Insurance Commissioners, results of prior3
examinations and office reviews, management changes, consumer complaints, and4
such other relevant information as from time to time may be required by the5
commissioner.6
B. In lieu of conducting a financial or market analysis under this Section7
of any foreign or alien insurer licensed in this state, the commissioner may rely8
upon the financial or market analysis conducted by the insurance department9
for the company's state of domicile or port-of-entry state accredited under the10
National Association of Insurance Commissioners' Financial Regulation11
Standards and Accreditation Program. The commissioner shall timely furnish to12
each reviewed insurer a written report detailing the findings of each such annual13
review. Within forty-five days of its receipt of such written report, each reviewed14
insurer shall provide to the commissioner such response, rebuttal, explanation, or15
other information as it may see fit. The commissioner shall furnish to any person,16
upon request, a copy of the written report, accompanied by a copy of the response,17
rebuttal, explanation, or other information provided by the reviewed insurer.18
C. Failure by an insurer or regulated entity to supply information19
requested by the Department of Insurance during the course of financial or20
market analysis may subject the insurer or regulated entity to revocation or21
suspension of its license, or, in lieu thereof, a fine not to exceed ten thousand22
dollars per occurrence. Every insurer or regulated entity shall produce and23
make freely accessible to the commissioner of insurance the accounts, records,24
documents and files in its possession or control.25
D. All working papers, recorded information, documents, and copies26
thereof produced by, obtained by, or disclosed to the commissioner, or any27
other person in the course of conducting a regulatory review, financial, or28
market analysis, including market conduct annual statement information,29 SB NO. 676
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performed under this Section, as well as the review and analysis of such1
information, shall be given confidential treatment and are not subject to2
subpoena or to discovery and may not be made public by the commissioner or3
any other person, except that access may be granted to the National Association4
of Insurance Commissioners, insurance department of other states,5
international, federal, or state law enforcement agencies or international,6
federal, or state regulatory agencies with statutory oversight over the financial7
services industry, if the recipient agrees to maintain the confidentiality of those8
documents which are confidential under the laws of this state. Any documents,9
materials, or other information which are disclosed by the commissioner to a10
third party shall not be admissible in evidence in a private civil action and shall11
be exempt from any applicable freedom of information law, public records law,12
or similar statute. No person or entity which receives or has access to13
documents, materials, or other information under this Section shall be14
permitted or required to testify in a private civil action concerning such15
documents, materials, or other information. No waiver of an applicable16
privilege or a claim of confidentiality in the documents, materials, or other17
information shall occur as a result of disclosure to the commissioner or to18
someone else granted access under this Section as a result of sharing such19
documents, materials or other information as provided in this Section. Nothing20
in this Section shall require an insurer to disclose documents, materials, or21
other information to a third party that is not otherwise required by law to be22
disclosed.23
E. In conducting financial or market analysis, the examiner or24
examiners shall observe those guidelines and procedures set forth in the25
Financial Analysis Handbook or Market Regulation Handbook adopted by the26
National Association of Insurance Commissioners. The commissioner may also27
employ such other guidelines or procedures as the commissioner may deem28
appropriate.29 SB NO. 676
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F. Nothing contained in this Chapter shall be construed to limit the1
commissioner's authority to use any final or preliminary analysis findings, any2
Department of Insurance or company work papers or other documents, or any3
other information discovered or developed during the course of any analysis in4
the furtherance of any legal or regulatory action which the commissioner may,5
in his sole discretion, deem appropriate.6
G. Any insurer or regulated entity against whom a fine has been levied7
shall be given thirty days notice of such action. Upon receipt of this notice, the8
aggrieved insurer or regulated entity may apply for and shall be entitled to a9
hearing pursuant to R.S. 22:2191, et seq.10
Section 2. R.S. 44:4.1(B)(10) is hereby amended and reenacted to read as follows:11
§44:4.1. Exceptions12
* * *13
B. The legislature further recognizes that there exist exceptions, exemptions,14
and limitations to the laws pertaining to public records throughout the revised15
statutes and codes of this state. Therefore, the following exceptions, exemptions, and16
limitations are hereby continued in effect by incorporation into this Chapter by17
citation:18
* * *19
(10) R.S. 22:2, 14, 42.1, 88, 244, 461, 572, 574, 628, 706, 732, 752, 1203,20
1460, 1466, 1546, 1644, 1656, 1723, 1929, 1983, 1984, 2036, 230321
* * *22
The original instrument was prepared by Mary Dozier O'Brien. The
following digest, which does not constitute a part of the legislative
instrument, was prepared by Cheryl Horne.
DIGEST
Hebert (SB 676)
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 SB NO. 676
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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 detailing 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 may subject the
insurer or regulated entity to revocation or suspension of license or a fine. Requires that
every insurer or regulated entity produce and make freely accessible to the commissioner the
accounts, records, documents and files in its possession or control.
Proposed law provides that all working papers, recorded information, documents and copies
of those documents utilized in the course of a regulatory review, financial, or market analysis
shall be given confidential status and shall not be subject to a subpoena or to discovery,
except in specific circumstances.
Proposed law provides that any documents, materials, or other information which are
disclosed by the commissioner to a third party shall not be admissible in evidence in a
private civil action and shall be exempt from any applicable freedom of information law,
public records law, or similar statute. Provides that no person or entity which receives or
has access to documents or other information shall be permitted or required to testify in a
private civil action concerning such documents or other information. Provides that no
waiver of an applicable privilege or a claim of confidentiality in the documents or other
information shall occur as a result of disclosure to the commissioner. Nothing in proposed
law shall require an insurer to disclose documents or other information to a third party that
is not otherwise required by law to be disclosed.
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 thirty days notice to an insurer or regulated entity should any fine
be levied.
Present law provides exceptions to documents that are subject to the public records law.
Proposed law adds 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)) SB NO. 676
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Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Insurance to the original
bill.
1. Creates an exception for trusts established and operated under Title 22.
2. Makes technical changes.
3. Provides that every insurer or regulated entity shall produce and make freely
accessible to the commissioner the accounts, records, documents and files in
its possession or control.
4. Provides for admissibility as evidence in a civil action of any documents,
materials, or other information which are disclosed by the commissioner to
a third party and for exemption from any applicable freedom of information
law, public records law, or similar statute.
5. Provides for thirty days notice to an insurer or regulated entity should any
fine be levied.