SB 55 Makes information collected in the course of an insurance compliance audit privileged information
Sponsor: Klindt
LR Number: 0287S.05F Fiscal Note: 0287-02
Committee: Small Business, Insurance & Industrial Relations
Last Action: 5/13/2005 - S Informal Calendar S Bills for Perfection Journal Page:
Title: SS SCS SB 55 Calendar Position:
Effective Date: August 28, 2005

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Current Bill Summary


SS/SCS/SB 55 - This act makes information collected in the course of an insurance compliance audit.

NONPUBLIC RECORDS HELD BY THE DEPARTMENT OF INSURANCE - Under this act, certain records held by the Department of Insurance are classified as nonpublic records and not available for public disclosure. The nonpublic records are:

(1) Documents or materials contained in any consumer complaint file maintained by the Department of Insurance; and

(2) Documents and other materials submitted by insurance companies and producers relating to a department investigation.

These nonpublic records are not confidential and not subject to disclosure unless sought by subpoena by the appropriate body. The director may only produce the documents to another state or federal agency pursuant to a subpoena, lawful request or formal discovery material. The documents may become public once they are admitted into evidence in any administrative, civil or criminal proceeding. The director may release records related to a insurance company examination if the director finds the release to be in the public interest. No waiver of applicable privileges or claims of confidentiality shall result from the director's disclosure to governmental agencies, the National Association of Insurance Commissioners, or law enforcement authorities (Section 374.071).

INSURANCE COMPLIANCE AUDITS - This act makes information collected in the course of an insurance compliance audit privileged information and not discoverable in civil, criminal or administrative proceedings unless an exception applies.

Insurance compliance self-evaluative documents submitted to the Director of Department of Insurance in conjunction with other examinations are confidential. Audit documents submitted to the department of insurance remain property of the insurer and are not subject to disclosure under the Sunshine Law. Persons preparing the audit documents shall not be examined in civil, criminal or administrative hearings unless the documents are not privileged (section 375.1064).

The privilege established in this act shall not apply to documents which are expressly waived. In a civil or administrative proceeding, a court may require disclosure of materials, after in-camera review, if it determines that the privilege was asserted for a fraudulent purpose or that the privilege does not apply.

A court may order disclosure of materials in a criminal proceeding, after in-camera review, if it determines that the privilege was asserted for a fraudulent purpose, that the privilege does not apply or that material contains relevant evidence of a crime and the prosecuting attorney or attorney general has made a good faith request or lawful subpoena for the information.

An administrative hearing officer or a court in any administrative hearing or civil proceeding initiated by the director may require public disclosure, after in-camera review, if the administrative hearing officer or court finds:

(1) The privilege is asserted for a fraudulent purpose;

(2) The material is not subject to the privilege; or

(3) The material contains evidence relevant to a breach of a civil duty owed by the insurer to others, and the director is unable to obtain the substantial equivalent of the information by independent means without incurring unreasonable cost and delay (section 375.1065).

The privilege is deemed to be waived by the insurer 45 days after receiving a request for disclosure of a self-evaluative audit, unless the insurer files a petition for an in camera examination. After conducting an in-camera review of the insurance compliance audit document, the court may require disclosure of any portion of the document it determines is not privileged. Any compelled disclosure of an audit will not make the audit a public document or be deemed a waiver of the privilege for any other civil, criminal or administrative proceeding (Section 375.1066).

An insurer has the burden of demonstrating the applicability of the privilege (section 375.1067).

The privilege shall not apply to:

(1) Documents expressly required to be collected, maintained or reported to regulatory agencies pursuant to law;

(2) Information obtained by observation or monitoring by any regulatory agency; or

(3) Information obtained from an independent source.

The privilege created by this act shall apply to all litigation or administrative proceedings pending on or after the effective date of this act (Section 375.1069).

This act is similar to SB 406 (2003), SB 1157 (2002) and HB 927 (2001). Some of the provisions of this act are contained in HCS/HB 388 (2005) (TAT).

STEPHEN WITTE