HCS HB 388 -- INSURANCE COMPLIANCE AUDITS (Yates)

COMMITTEE OF ORIGIN:  Insurance Policy

This substitute makes certain documents that are submitted to the
Department of Insurance non-public documents, including
information in consumer complaint files and information submitted
by an insurer or producer for purposes of investigation.  This
information is confidential and not subject to disclosure unless
a subpoena issued by the proper prosecuting attorney, Attorney
General, administrative hearing officer, or court.  The
department director can make these documents public if admitted
as evidence in any administrative, civil, or criminal enforcement
proceeding.

Any information collected in the course of an insurance
compliance audit is considered privileged.  The information is
not discoverable or admissible as evidence in any legal action,
unless the insurer expressly waives the privilege.  Persons
preparing the audit documents will not be examined in civil,
criminal, or administrative hearings unless the documents are not
privileged.

In a civil or criminal proceeding, a court may order disclosure
of materials, after in-camera review, if it is determined that
the privilege was asserted for fraudulent purposes or that the
privilege does not apply.

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 or
criminal proceeding.

An insurer has the burden of demonstrating the applicability of
the privilege.  The privilege will not apply to information:

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

(2)  Obtained by observation or monitoring by any regulatory
agency; and

(3)  Obtained from a source independent of the insurance
compliance audit.

The insurance compliance self-evaluative privilege created in
these sections will apply to all litigation or administrative
proceedings initiated after the effective date of the substitute.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of Unknown
less than $100,000 in FY 2006, FY 2007, and FY 2008.  No impact
on Other State Funds in FY 2006, FY 2007, and FY 2008.

Missouri House of Representatives
93rd General Assembly, 1st Regular Session
Last Updated August 25, 2005 at 1:19 pm