SF 2391

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to commerce; regulating the disclosure of 
  1.3             certain information to certain investigatory entities; 
  1.4             amending Minnesota Statutes 2002, sections 45.027, 
  1.5             subdivision 7a; 60A.03, subdivision 9; 60A.031, 
  1.6             subdivision 4. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 45.027, 
  1.9   subdivision 7a, is amended to read: 
  1.10     Subd. 7a.  [AUTHORIZED DISCLOSURES OF INFORMATION AND 
  1.11  DATA.] (a) The commissioner may release and disclose any active 
  1.12  or inactive investigative information and data on licensees to 
  1.13  any national securities exchange or national securities 
  1.14  association registered under the Securities Exchange Act of 1934 
  1.15  when necessary for the requesting agency in initiating, 
  1.16  furthering, or completing an investigation. 
  1.17     (b) The commissioner may release any active or inactive 
  1.18  investigative data relating to the conduct of the business of 
  1.19  insurance to the Office of the Comptroller of the Currency or 
  1.20  the Office of Thrift Supervision in order to facilitate the 
  1.21  initiation, furtherance, or completion of the investigation. 
  1.22     Sec. 2.  Minnesota Statutes 2002, section 60A.03, 
  1.23  subdivision 9, is amended to read: 
  1.24     Subd. 9.  [CONFIDENTIALITY OF INFORMATION.] The 
  1.25  commissioner may not be required to divulge any information 
  1.26  obtained in the course of the supervision of insurance 
  2.1   companies, or the examination of insurance companies, including 
  2.2   examination related correspondence and workpapers, until the 
  2.3   examination report is finally accepted and issued by the 
  2.4   commissioner, and then only in the form of the final public 
  2.5   report of examinations.  Nothing contained in this subdivision 
  2.6   prevents or shall be construed as prohibiting the commissioner 
  2.7   from disclosing the content of this information to the insurance 
  2.8   department of another state or, the National Association of 
  2.9   Insurance Commissioners, or the National Association of 
  2.10  Securities Dealers if the recipient of the information agrees in 
  2.11  writing to hold it as nonpublic data as defined in section 
  2.12  13.02, in a manner consistent with this subdivision.  This 
  2.13  subdivision does not apply to the extent the commissioner is 
  2.14  required or permitted by law, or ordered by a court of law to 
  2.15  testify or produce evidence in a civil or criminal proceeding.  
  2.16  For purposes of this subdivision, a subpoena is not an order of 
  2.17  a court of law. 
  2.18     Sec. 3.  Minnesota Statutes 2002, section 60A.031, 
  2.19  subdivision 4, is amended to read: 
  2.20     Subd. 4.  [EXAMINATION REPORT; FOREIGN AND DOMESTIC 
  2.21  COMPANIES.] (a) The commissioner shall make a full and true 
  2.22  report of every examination conducted pursuant to this chapter, 
  2.23  which shall include (1) a statement of findings of fact relating 
  2.24  to the financial status and other matters ascertained from the 
  2.25  books, papers, records, documents, and other evidence obtained 
  2.26  by investigation and examination or ascertained from the 
  2.27  testimony of officers, agents, or other persons examined under 
  2.28  oath concerning the business, affairs, assets, obligations, 
  2.29  ability to fulfill obligations, and compliance with all the 
  2.30  provisions of the law of the company, applicant, organization, 
  2.31  or person subject to this chapter and (2) a summary of important 
  2.32  points noted in the report, conclusions, recommendations and 
  2.33  suggestions as may reasonably be warranted from the facts so 
  2.34  ascertained in the examinations.  The report of examination 
  2.35  shall be verified by the oath of the examiner in charge thereof, 
  2.36  and shall be prima facie evidence in any action or proceedings 
  3.1   in the name of the state against the company, applicant, 
  3.2   organization, or person upon the facts stated therein.  
  3.3      (b) No later than 60 days following completion of the 
  3.4   examination, the examiner in charge shall file with the 
  3.5   department a verified written report of examination under oath.  
  3.6   Upon receipt of the verified report, the department shall 
  3.7   transmit the report to the company examined, together with a 
  3.8   notice which provides the company examined with a reasonable 
  3.9   opportunity of not more than 30 days to make a written 
  3.10  submission or rebuttal with respect to matters contained in the 
  3.11  examination report. 
  3.12     (c) Within 30 days of the end of the period allowed for the 
  3.13  receipt of written submissions or rebuttals, the commissioner 
  3.14  shall fully consider and review the report, together with the 
  3.15  written submissions or rebuttals and the relevant portions of 
  3.16  the examiner's workpapers and enter an order: 
  3.17     (1) adopting the examination report as filed or with 
  3.18  modification or corrections.  If the examination report reveals 
  3.19  that the company is operating in violation of any law, rule, or 
  3.20  prior order of the commissioner, the commissioner may order the 
  3.21  company to take any action the commissioner considers necessary 
  3.22  and appropriate to cure the violation; 
  3.23     (2) rejecting the examination report with directions to the 
  3.24  examiners to reopen the examination for purposes of obtaining 
  3.25  additional data, documentation, or information, and refiling the 
  3.26  report as required under paragraph (b); or 
  3.27     (3) calling for an investigatory hearing with no less than 
  3.28  20 days' notice to the company for purposes of obtaining 
  3.29  additional documentation, data, information, and testimony. 
  3.30     (d)(1) All orders entered under paragraph (c), clause (1), 
  3.31  must be accompanied by findings and conclusions resulting from 
  3.32  the commissioner's consideration and review of the examination 
  3.33  report, relevant examiner workpapers, and any written 
  3.34  submissions or rebuttals.  The order is a final administrative 
  3.35  decision and may be appealed as provided under chapter 14.  The 
  3.36  order must be served upon the company by certified mail, 
  4.1   together with a copy of the adopted examination report.  Within 
  4.2   30 days of the issuance of the adopted report, the company shall 
  4.3   file affidavits executed by each of its directors stating under 
  4.4   oath that they have received a copy of the adopted report and 
  4.5   related orders.  
  4.6      (2) A hearing conducted under paragraph (c), clause (3), by 
  4.7   the commissioner or authorized representative, must be conducted 
  4.8   as a nonadversarial confidential investigatory proceeding as 
  4.9   necessary for the resolution of inconsistencies, discrepancies, 
  4.10  or disputed issues apparent upon the face of the filed 
  4.11  examination report or raised by or as a result of the 
  4.12  commissioner's review of relevant workpapers or by the written 
  4.13  submission or rebuttal of the company.  Within 20 days of the 
  4.14  conclusion of the hearing, the commissioner shall enter an order 
  4.15  as required under paragraph (c), clause (1).  
  4.16     (3) The commissioner shall not appoint an examiner as an 
  4.17  authorized representative to conduct the hearing.  The hearing 
  4.18  must proceed expeditiously.  Discovery by the company is limited 
  4.19  to the examiner's workpapers which tend to substantiate 
  4.20  assertions in a written submission or rebuttal.  The 
  4.21  commissioner or the commissioner's representative may issue 
  4.22  subpoenas for the attendance of witnesses or the production of 
  4.23  documents considered relevant to the investigation whether under 
  4.24  the control of the department, the company, or other persons.  
  4.25  The documents produced must be included in the record.  
  4.26  Testimony taken by the commissioner or the commissioner's 
  4.27  representative must be under oath and preserved for the record. 
  4.28     This section does not require the department to disclose 
  4.29  information or records which would indicate or show the 
  4.30  existence or content of an investigation or activity of a 
  4.31  criminal justice agency. 
  4.32     (4) The hearing must proceed with the commissioner or the 
  4.33  commissioner's representative posing questions to the persons 
  4.34  subpoenaed.  Thereafter, the company and the department may 
  4.35  present testimony relevant to the investigation.  
  4.36  Cross-examination may be conducted only by the commissioner or 
  5.1   the commissioner's representative.  The company and the 
  5.2   department shall be permitted to make closing statements and may 
  5.3   be represented by counsel of their choice.  
  5.4      (e)(1) Upon the adoption of the examination report under 
  5.5   paragraph (c), clause (1), the commissioner shall continue to 
  5.6   hold the content of the examination report as private and 
  5.7   confidential information for a period of 30 days except as 
  5.8   otherwise provided in paragraph (b).  Thereafter, the 
  5.9   commissioner may open the report for public inspection if a 
  5.10  court of competent jurisdiction has not stayed its publication. 
  5.11     (2) Nothing contained in this subdivision prevents or shall 
  5.12  be construed as prohibiting the commissioner from disclosing the 
  5.13  content of an examination report, preliminary examination report 
  5.14  or results, or any matter relating to the reports, to the 
  5.15  Commerce Department or the insurance department of another state 
  5.16  or country, or to law enforcement officials of this or another 
  5.17  state or agency of the federal government at any time, if the 
  5.18  agency or office receiving the report or matters relating to the 
  5.19  report agrees in writing to hold it confidential and in a manner 
  5.20  consistent with this subdivision.  
  5.21     (3) If the commissioner determines that regulatory action 
  5.22  is appropriate as a result of an examination, the commissioner 
  5.23  may initiate proceedings or actions as provided by law. 
  5.24     (f) All working papers, recorded information, documents and 
  5.25  copies thereof produced by, obtained by, or disclosed to the 
  5.26  commissioner or any other person in the course of an examination 
  5.27  made under this subdivision must be given confidential treatment 
  5.28  and are not subject to subpoena and may not be made public by 
  5.29  the commissioner or any other person, except to the extent 
  5.30  provided in paragraph (e).  Access may also be granted to the 
  5.31  National Association of Insurance Commissioners and the National 
  5.32  Association of Securities Dealers.  The parties must agree in 
  5.33  writing prior to receiving the information to provide to it the 
  5.34  same confidential treatment as required by this section, unless 
  5.35  the prior written consent of the company to which it pertains 
  5.36  has been obtained.