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The 189th General Court of the Commonwealth of Massachusetts

Section 10: Reports; audits, examinations or inspections; confidentiality and privilege

Section 10. Every health maintenance organization shall annually file with the commissioner, within 60 days of the close of its fiscal year, a report verified by at least 2 principal officers and covering its preceding fiscal year; provided that, if the commissioner determines that a threat of insolvency exists with respect to a health maintenance organization, he may require that such report be made available prior to the expiration of said 60 days. The report shall include:?

(1) financial statements of the health maintenance organization on the latest applicable form of annual statement approved by the National Association of Insurance Commissioners for health maintenance organizations, with any additional information the commissioner may require for the purpose of eliciting a complete and accurate exhibit of the condition and transactions of the health maintenance organization;

(2) statistics relating to the cost of operations and the pattern of utilization of services in the previous fiscal year; and

(3) such other information as the commissioner may reasonably require relating to the past performance of the organization.

All financial information reflected in the annual report shall be maintained and prepared in accordance with statutory accounting practices and procedures prescribed or permitted by the commissioner.

The commissioner shall require that the annual report be maintained and prepared in accordance with the Annual Statement Instructions and Accounting Practices and Procedures Manual adopted by the National Association of Insurance Commissioners unless further modified by the commissioner as deemed appropriate.

The commissioner may make an examination of the affairs of a health maintenance organization when the commissioner deems prudent but, in any event, not less frequently than once every 5 years. Health maintenance organizations shall be examined in all respects as companies subject to and pursuant to section 4 of chapter 175.

Notwithstanding any other provision of the General Laws, including clause Twenty-sixth of section 7 of chapter 4 and chapter 66, 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 said clause Twenty-sixth, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner may 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:

(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 pursuant to this section or assisting the commissioner in the analysis of the financial condition or market conduct of a health maintenance organization; or

(ii) disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to subsection (c) 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.

(c) 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, the National Association of Insurance Commissioners and its affiliates and subsidiaries and 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 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 paragraph.

(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 paragraph 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 paragraph shall be available and enforced in any proceeding in and in any court of the commonwealth.

The final report of any such audit, examination or other inspection by or on behalf of the division shall be a public record.