Bill H.879

HOUSE DOCKET, NO. 1098 FILED ON: 1/16/2013

HOUSE . . . . . . . . . . . . . . . No. 879

By Mr. Costello of Newburyport, a petition (accompanied by bill, House, No. 879) of Michael A. Costello relative to confidentiality in financial examinations. Financial Services.

The Commonwealth of Massachusetts

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In the Year Two Thousand Thirteen

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An Act relative to confidentiality in financial examinations.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 4 of chapter 175 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by striking out the twelfth paragraph and inserting in place thereof the following paragraph:-

(12) Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a company shall be confidential by law and privileged, shall not be a public record under clause twenty six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(a) Documents, materials or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the National Association of Insurance Commissioners and its affiliates and subsidiaries shall be confidential by law and privileged, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action if they are:

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this subsection by any member of the National Association of Insurance Commissioners.

(b) Neither the commissioner nor any person who received the documents, material or other information while acting under the authority of the commissioner, including the National Association of Insurance Commissioners and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information subject to this section.

(i) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to this subsection with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, 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;

(ii) May receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and 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; and

(iii) May enter into agreements governing sharing and use of information consistent with this subsection.

(d) 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 subsection or as a result of sharing as authorized in this subsection.

(e) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall be available and enforced in any proceeding in, and in any court of the Commonwealth.

(f) In this subsection “department,” “insurance department,” “law enforcement agency,” “regulatory agency,” and the “National Association of Insurance Commissioners” include, but are not limited to, their employees, agents, consultants and contractors.

SECTION 2. Chapter 174B of the General Laws is hereby amended by inserting after section 7 the following section:-

Section 7A. The commissioner, or any other person designated by the commissioner, shall, at least once in five years, and whenever the commissioner deems it prudent, visit any automobile club and examine into its affairs. The commissioner shall have free access to all of the books, records and papers of the automobile club, and may summon and examine under oath its officers, agents, employees and other persons in relation to its affairs and condition. The commissioner shall require every such automobile club to keep its books, records, accounts and vouchers in such manner that he or his authorized representatives may readily verify its annual statements and determine whether the automobile club has complied with the law.

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of an automobile club shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

Documents, materials or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the National Association of Insurance Commissioners and its affiliates and subsidiaries shall be confidential by law and privileged, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action if they are:

(ii)Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

Neither the commissioner nor any person who received the documents, material or other information while acting under the authority of the commissioner, including the National Association of Insurance Commissioners and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information subject to this section.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(i) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to this section with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, 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;

(iii) May enter into agreements governing sharing and use of information consistent with this section.

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 this section.

A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall be available and enforced in any proceeding in, and in any court of the Commonwealth.

In this section “department,” “insurance department,” “law enforcement agency,” “regulatory agency,” and the “National Association of Insurance Commissioners” include, but are not limited to, their employees, agents, consultants and contractors.

SECTION 3. Section 10 of Chapter 176G of the General Laws, is hereby amended by striking out the second to last paragraph and inserting in place thereof the following paragraphs:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this subsection, or in the course of analysis by the commissioner of the financial condition or market conduct of a health maintenance organization shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under paragraph (c) of this subsection by any member of the National Association of Insurance Commissioners.

(iii) May enter into agreements governing sharing and use of information consistent with this subsection.

SECTION 4. Section 52C(e) of Chapter 152 of the General Laws is hereby amended by adding the following paragraphs:-

Notwithstanding any other provision of the General Laws, including clause Twenty-sixth of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this subsection, or in the course of analysis by the commissioner of the financial condition or market conduct of a rating organization shall be confidential by law and privileged, shall not be a public record under clause twenty-sixth of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this subsection by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(i) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to this subsection, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, 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;

(iii) May enter into agreements governing sharing and use of information consistent with this subsection.

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 subsection or as a result of sharing as authorized in this subsection.

In this subsection “department,” “insurance department,” “law enforcement agency,” “regulatory agency,” and the “National Association of Insurance Commissioners” include, but are not limited to, their employees, agents, consultants and contractors.

SECTION 5. Section 14 of chapter 175A of the General Laws is hereby amended by adding the following paragraphs:-

Notwithstanding any other provision of the General Laws, including clause Twenty-sixth of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a rating organization licensed in this commonwealth as provided in section eight, an advisory organization referred to in section twelve or of each group, association or other organization referred to in section thirteen shall be confidential by law and privileged, shall not be a public record under clause Twenty-sixth of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(i) Created, produced, obtained by or disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries in the course of the National Association of Insurance Commissioners and its affiliates and subsidiaries assisting an examination made under this section, or assisting the commissioner in the analysis of the financial condition or market conduct of a rating organization licensed in this commonwealth as provided in section eight, an advisory organization referred to in section twelve or of each group, association or other organization referred to in section thirteen; or

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(i) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to this section, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, 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;

(iii) May enter into agreements governing sharing and use of information consistent with this section.

A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this section shall be available and enforced in any proceeding in, and in any court of the Commonwealth.

SECTION 6. Section 5(a) of chapter 175C, as so appearing, is hereby amended by adding the following paragraphs:-

obtained by or disclosed to the commissioner or any other person in the course of an examination made pursuant to this subsection, or in the course of analysis by the commissioner of the financial condition or market conduct of the association shall be confidential by law and privileged, shall not be a public record under clause Twenty-sixth of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this subsection by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this subsection.

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 subsection or as a result of sharing as authorized in this subsection.

SECTION 7. Section 44 of Chapter 176 of the General Laws is hereby amended by adding the following paragraphs:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a domestic society shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 8. Section 45 of said Chapter 176 of the General Laws is hereby amended by adding the following paragraphs:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a foreign society shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 9. Section 7 of Chapter 176A of the General Laws is hereby amended by adding the following paragraphs:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to section 6, or in the course of analysis by the commissioner of the financial condition or market conduct of a non-profit hospital service corporation shall be confidential by law and privileged, shall not be a public record under clause Twenty-sixth of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(i) Created, produced, obtained by or disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries in the course of the National Association of Insurance Commissioners and its affiliates and subsidiaries assisting an examination made under section 6, or assisting the commissioner in the analysis of the financial condition or market conduct of a non-profit hospital service corporation; or

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 10. Section 9 of chapter 176B, as so appearing, is hereby amended by inserting after the first paragraph, the following paragraphs:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a medical service corporation shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 11. Section 10 of Chapter 176C of the General Laws is hereby amended by adding the following paragraphs at the end of the section:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a medical service corporation shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 12. Section 9 of chapter 176E, as so appearing, is hereby amended by adding the following paragraphs at the end of the section:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a dental service corporation shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 13. Section 9 of chapter 176F, as so appearing, is hereby amended by adding the following paragraphs at the end of the section:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of an optometric service corporation shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

i) May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to this section, with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners and its affiliates and subsidiaries, 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;

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 14. Chapter 176P of the General Laws, Section 36, subsection (a) is hereby amended by adding the following paragraphs at the end of the subsection:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this subsection, or in the course of analysis by the commissioner of the financial condition or market conduct of a limited society shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this subsection by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this subsection.

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 subsection or as a result of sharing as authorized in this subsection.

SECTION 15. Section 6 of Chapter 40M of the General Laws is hereby amended by adding the following paragraphs at the end of the section:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a group shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

SECTION 16. Section 25I of Chapter 152 of the General Laws is hereby amended by adding the following paragraphs at the end of the section:-

Notwithstanding any other provision of the General Laws, including clause twenty-six of section seven of chapter four and chapter sixty-six, documents, materials or other information, 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 pursuant to this section, or in the course of analysis by the commissioner of the financial condition or market conduct of a group shall be confidential by law and privileged, shall not be a public record under clause twenty-six of section seven of chapter four, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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.

(ii) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under this section by any member of the National Association of Insurance Commissioners.

In order to assist in the performance of the commissioner’s duties, the commissioner:

(iii) May enter into agreements governing sharing and use of information consistent with this section.

Name:	District/Address:	Date Added:
Michael A. Costello	1st Essex	1/16/2013