83R5476 MEW-F
By: Sheets H.B. No. 2558
A BILL TO BE ENTITLED
AN ACT
relating to the confidentiality of information obtained by or
disclosed to the Texas Department of Insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 32, Insurance Code, is amended by adding
Subchapter F to read as follows:
SUBCHAPTER F. CONFIDENTIALITY OF INFORMATION
Sec. 32.201. CONFIDENTIALITY OF CERTAIN INFORMATION. (a)
This section applies to information, including documents and copies
of documents, whether in written or electronic format, that is:
(1) included in a final or preliminary examination
report or investigation under Chapter 401, 751, or 823;
(2) obtained by or disclosed to the commissioner or
department in the course of an examination under Chapter 401 or 751;
(3) disclosed to the commissioner or another person in
the course of an examination or investigation under Subchapter H,
Chapter 823;
(4) reported under Subchapter B, Chapter 823;
(5) disclosed under Section 823.010;
(6) obtained through an enterprise risk report under
Section 823.0595;
(7) obtained in response to a request for information
from the department made under Section 38.001; or
(8) obtained by or disclosed to the department and
that is confidential and exempt from disclosure under Chapter 552,
Government Code.
(b) The information described by Subsection (a), including
information in the possession of the National Association of
Insurance Commissioners under this section, is confidential and
privileged for all purposes, including for purposes of:
(1) Chapter 552, Government Code;
(2) a response to a subpoena; or
(3) discovery or admissibility in evidence in a civil
action.
(c) Except as provided by Subsections (d) and (e),
confidential information may not be disclosed without the prior
written consent of the insurer, agent, or other individual or
entity to which it pertains.
(d) The commissioner may publish all or any part of a
preliminary or final examination report in the manner that the
commissioner considers appropriate if the commissioner, after
giving the insurer and its affected affiliates notice and an
opportunity to be heard, determines that the interests of
policyholders or the public will be served by the publication of the
preliminary or final examination report.
(e) Except as provided by Subsection (f), if the recipient
of documents or other information agrees in writing to maintain the
confidential and privileged status of the documents or other
information and verifies in writing the legal authority to maintain
the confidential and privileged status of the documents or
information, the commissioner or designated person in the
department may disclose the information to any of the following
individuals or entities functioning in an official capacity:
(1) a commissioner of insurance or an insurance
department of another state if:
(A) the other state has confidentiality laws
applicable to the requested information substantially similar to
the laws of this state;
(B) the commissioner or other similar officer of
the other state has a legal duty to obtain the information; and
(C) the information pertains to an insurer,
affiliated group of insurers, agent, or other individual or entity
that operates in the other state;
(2) an authorized law enforcement official of this
state, another state, or the United States;
(3) a prosecuting attorney of a municipality, county,
or judicial district of this state, another state, or the United
States;
(4) the attorney general;
(5) a grand jury;
(6) a member of a supervisory college described by
Section 823.0145 if:
(A) the member is an insurance regulatory
official of another country that has confidentiality laws
applicable to the requested information substantially similar to
the laws of this state;
(B) the member has a legal duty to obtain the
information;
(C) the information pertains to an insurer,
affiliated group of insurers, agent, or other individual or entity
that operates in the country of the member;
(D) the member is from a country that has
established relationships, by treaty or otherwise, with the United
States, including written agreements to maintain and protect the
confidential or privileged nature of any information shared;
(E) a written agreement described by Paragraph
(D) is enforceable in the United States or provides for sufficient
procedures in the foreign country of the member that permit the
individual or entity to receive prompt notice if any information
disclosed under this subsection is subject to a request for
disclosure or subpoena for disclosure or production; and
(F) the member agrees to give consent to
intervention by the individual or entity in any judicial or
administrative proceeding in which the member may be required to
disclose confidential information shared with the member in
accordance with this section; and
(7) the National Association of Insurance
Commissioners and its affiliates and subsidiaries, subject to
Subsection (g).
(f) Notwithstanding Subsection (e), the commissioner may
share confidential and privileged information reported under
Section 823.0595 or confidential information obtained during the
course of an examination with the commissioner of insurance or
other similar officer of another state only if:
(1) the other state has a statute or rule
substantially similar to Subsection (e); and
(2) the commissioner or other similar officer of the
other state agrees in writing not to disclose the information.
(g) The commissioner shall enter into written agreements
with the National Association of Insurance Commissioners that
comply with the requirements of Subsection (e) regarding the
sharing and use of information provided under this section. An
agreement entered into under this subsection must:
(1) specify procedures and protocols regarding the
confidentiality and security of information shared with the
National Association of Insurance Commissioners and its affiliates
and subsidiaries under this chapter, including:
(A) procedures and protocols for sharing by the
National Association of Insurance Commissioners with other states,
federal regulators, or international insurance regulatory
authorities; and
(B) requirements that procedures and protocols
for sharing information with international insurance regulatory
authorities comply with Section 32.202;
(2) specify that ownership of information shared with
the National Association of Insurance Commissioners and its
affiliates and subsidiaries under this chapter remains with the
commissioner and that use of the information by the National
Association of Insurance Commissioners is subject to the direction
of the commissioner;
(3) require prompt notice to an insurer, affiliated
group of insurers, agent, or other individual or entity whose
confidential information is in the possession of the National
Association of Insurance Commissioners under this chapter that the
information is subject to a request or subpoena to the National
Association of Insurance Commissioners for disclosure or
production; and
(4) require the National Association of Insurance
Commissioners and its affiliates and subsidiaries to give consent
to intervention by an insurer, affiliated group of insurers, agent,
or other individual or entity in a judicial or administrative
action in which the National Association of Insurance Commissioners
and its affiliates and subsidiaries may be required to disclose
confidential information about the insurer, affiliated group of
insurers, agent, or other individual or entity shared with the
National Association of Insurance Commissioners and its affiliates
and subsidiaries under this chapter.
(h) Confidential information obtained by the department
from another state, an agency of the United States, the National
Association of Insurance Commissioners, or a foreign country or
international insurance regulatory official must be maintained in
the same confidential and privileged status it had under the laws of
the jurisdiction that shared the information with the department.
The department may enter into information sharing agreements with
other states and jurisdictions provided that the requirements of
this section and Section 32.202, if applicable, are met.
Information obtained from another state, an agency of the United
States, or other jurisdiction or the National Association of
Insurance Commissioners is confidential and not subject to
disclosure under Chapter 552, Government Code.
(i) This section may not be construed to prevent the
commissioner from using information described by Subsection (a) in
the furtherance of a legal or regulatory action relating to the
administration of this code.
(j) The commissioner remains solely responsible for the
administration, execution, and enforcement of this chapter, and the
commissioner's sharing of information does not constitute a
delegation of regulatory or rulemaking authority.
Sec. 32.202. DISCLOSING CONFIDENTIAL INFORMATION TO
FOREIGN COUNTRIES AND INTERNATIONAL INSURANCE REGULATORY
AUTHORITIES. (a) Except as provided by Subsection (b), the
department may not disclose confidential information as described
by Section 32.201 to any foreign country or international insurance
regulatory authority without the prior written consent of the
insurer, affiliated group of insurers, agent, or other individual
or entity to which the information pertains.
(b) The commissioner may share information with a foreign
country or international insurance regulatory authority without
the prior notice described by Subsection (c) or the prior consent of
the insurer, affiliated group of insurers, agent, or other
individual or entity to which it pertains described by Subsection
(a) only if:
(1) the foreign country or international insurance
regulatory authority is a member of a supervisory college described
by Section 823.0145 and complies with the requirements in Section
32.201(e)(6); or
(2) the commissioner is required by a treaty of the
United States or federal law to provide the information.
(c) The commissioner may share information with a foreign
country or international insurance regulatory authority if the
commissioner, after giving the individual or entity to which the
information pertains prior notice and an opportunity to be heard,
determines that the interests of policyholders or the public will
be served by disclosure of information. The commissioner shall
establish in a written agreement before disclosure that:
(1) the foreign country or international insurance
regulatory authority of the other country has confidentiality laws
applicable to the requested information substantially similar to
the laws of this state;
(2) the international insurance regulatory authority
or the commissioner or other similar officer of the other country
has a legal duty to obtain the information;
(3) the insurer, affiliated group of insurers, agent,
or other individual or entity to which the information pertains
operates in the foreign country or the country of the international
insurance regulatory authority requesting disclosure of the
information;
(4) the foreign country or international insurance
regulatory authority has established relationships, by treaty or
otherwise, with the United States, including written agreements to
maintain and protect the confidential or privileged nature of any
information shared;
(5) the written agreement is enforceable in the United
States or provides for sufficient procedures in the foreign country
that permit the individual or entity to which the information
pertains to receive prompt notice if any information disclosed
under this subsection is subject to a request for disclosure or
subpoena for disclosure or production; and
(6) the foreign country or international insurance
regulatory authority agrees to give consent to intervention by the
individual or entity to which the information pertains in a
judicial or administrative proceeding in which the foreign country
or international insurance regulatory authority may be required to
disclose confidential information shared with the country or
authority under this section.
(d) A copy of any agreement with a foreign country or
international insurance regulatory authority disclosing
confidential information must be provided to an affected insurer,
affiliated group of insurers, agent, or other affected individual
or entity before disclosure of any confidential or privileged
information. The department may include the individual or entity
as a party to the written agreement.
Sec. 32.203. CONFLICT WITH OTHER LAW. To the extent of any
conflict, this subchapter controls over another provision of this
code.
SECTION 2. Section 32.023, Insurance Code, is amended to
read as follows:
Sec. 32.023. REPORTS TO OTHER STATES. Subject to the
requirements of Section 32.201 [On request], the department shall
provide to the insurance commissioner or other similar officer of
another state information relating to a company of this state that
does business in the other state if:
(1) the other state has enacted the substantial
provisions of the insurance laws of this state; [and]
(2) the commissioner or other similar officer has a
legal duty to obtain the information; and
(3) a request has been made for such information.
SECTION 3. Section 751.207(b), Insurance Code, is amended
to read as follows:
(b) This chapter does not prevent the commissioner from
disclosing [at any time] the contents of a final market conduct
examination report to the department, the insurance department of
any other state, or an agency of the federal government, if the
requirements of Section 32.201 have been met [department or agency
receiving the report agrees in writing to maintain the information
as confidential and in a manner consistent with this chapter].
SECTION 4. Sections 751.252(a) and (c), Insurance Code, are
amended to read as follows:
(a) The commissioner may share documents, materials, or
other information obtained by or disclosed to the commissioner
under this chapter with other state, federal, and international
regulatory agencies and law enforcement authorities only as
provided by Sections 32.201 and 32.202 [if the recipient agrees to
and has the legal authority to maintain the confidentiality and
privileged status of the document, material, or other information].
(c) Consistent with this section and Sections 32.201 and
32.202, the commissioner may enter into agreements governing the
sharing and use of information.
SECTION 5. The following laws are repealed:
(1) Section 751.207(c), Insurance Code; and
(2) Section 823.011, Insurance Code.
SECTION 6. This Act takes effect September 1, 2013.