Amended in Senate July 1, 2014

Amended in Assembly January 17, 2014

Amended in Assembly January 6, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 1234


Introduced by Assembly Member Levine

February 22, 2013


An act to amend Section 1215.8 of the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 1234, as amended, Levine. Insurance: registration statements.

Existing law governs the business of insurance and authorizes the Insurance Commissioner to provide oversight over the insurance industry, including conducting investigations and bringing enforcement actions.

Existing law requires each insurer that is authorized to do business in this state and that is a member of an insurance holding company system to register with the commissioner and to file a registration statement containing specified information, including the capital structure and general financial condition of the insurer and specified transactions between the insurer and its affiliates.

Existing law makes the information reported to the commissioner in the registration statement and information disclosed in the course of an examination or investigation of the registration statement exempt from subpoena or public disclosure, except as specified.

This bill would instead make information reported to the commissioner in the registration statement and information disclosed in the course of an examination or investigation of the registration statement exempt from public disclosure by the commissioner and not subject to discovery from the commissioner or admissible into evidence in any private civil action if obtained from the commissioner in any manner, except as specified.

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Existing constitutional provisions require that a statute that limits the public’s right of access to meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

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This bill would make legislative findings to that effect.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 1215.8 of the Insurance Code is amended
2to read:

3

1215.8.  

(a) All information, documents, and copies thereof
4obtained by or disclosed to the commissioner or any other person
5in the course of an examination or investigation made pursuant to
6Sections 1215.4 and 1215.5, and all information reported pursuant
7to Section 1215.4, shall be kept confidential, is not subject to
8disclosure by the commissioner pursuant to the California Public
9Records Act (Chapter 3.5 (commencing with Section 6250) of
10Division 7 of Title 1 of the Government Code), is not subject to
11subpoena, and is not subject to discovery from the commissioner
12or admissible into evidence in any private civil action if obtained
13from the commissioner in any manner. This information shall not
14be made public by the commissioner or any other person except
15to insurance departments of other states without the prior written
16consent of the insurance company to which it pertains, unless the
17commissioner, after giving the insurer and its affiliates who would
18be affected thereby notice and opportunity to be heard, determines
19that the interests of policyholders, shareholders, or the public will
20be served by the publication thereof, in which event he or she may
21publish all or any part thereof in a manner as he or she may deem
22appropriate.

23(b) In order to assist in the performance of the commissioner’s
24duties, the commissioner:

P3    1(1) May, upon request, be required to share documents,
2materials, or other information, including the confidential and
3privileged documents, materials, or information subject to
4subdivision (a), with other state, federal, and international
5regulatory agencies, with the NAIC and its affiliates and
6subsidiaries, and with state, federal, and international law
7enforcement authorities, including members of any supervisory
8college described in Section 1215.7; provided that the recipient
9agrees in writing to maintain the confidentiality and privileged
10status of the documents, materials, or other information, and has
11verified in writing the legal authority to maintain confidentiality.

12(2) Notwithstanding paragraph (1), may only share confidential
13and privileged documents, materials, or information reported
14pursuant to subdivision (m) of Section 1215.4 with commissioners
15of states having statutes or regulations substantially similar to
16subdivision (a) and who have agreed in writing not to disclose the
17information.

18(3) May receive documents, materials, or information, including
19otherwise confidential and privileged documents, materials, or
20information, from the NAIC and its affiliates and subsidiaries and
21from regulatory and law enforcement officials of other foreign or
22domestic jurisdictions, and shall maintain as confidential or
23privileged any documents, materials, or information received with
24notice or the understanding that it is confidential or privileged
25under the laws of the jurisdiction that is the source of the
26documents, materials, or information.

27(4) May enter into written agreements with the NAIC governing
28sharing and use of information provided pursuant to this
29subdivision consistent with this subdivision that shall do the
30following:

31(A) Specify procedures and protocols regarding the
32confidentiality and security of information shared with the NAIC
33and its affiliates and subsidiaries pursuant to this subdivision,
34including procedures and protocols for sharing by the NAIC with
35other state, federal, or international regulators.

36(B) Specify that ownership of information shared with the NAIC
37and its affiliates and subsidiaries pursuant to this subdivision
38remains with the commissioner and the NAIC’s use of the
39information is subject to the direction of the commissioner.

P4    1(C) Require prompt notice to be given to an insurer whose
2confidential information in the possession of the NAIC pursuant
3to this subdivision is subject to a request or subpoena to the NAIC
4for disclosure or production.

5(D) Require the NAIC and its affiliates and subsidiaries to
6consent to intervention by an insurer in any judicial or
7administrative action in which the NAIC and its affiliates and
8subsidiaries may be required to disclose confidential information
9about the insurer shared with the NAIC and its affiliates and
10subsidiaries pursuant to this subdivision.

11(c) The sharing of information by the commissioner pursuant
12to this subdivision shall not constitute a delegation of regulatory
13authority or rulemaking, and the commissioner is solely responsible
14for the administration, execution, and enforcement of the provisions
15of this article.

16(d) No waiver of any applicable privilege or claim of
17confidentiality in the documents, materials, or information shall
18occur as a result of disclosure to the commissioner under this
19section or as a result of sharing as authorized in subdivision (c).

20(e) Documents, materials, or other information filed in the
21possession or control of the NAIC pursuant to this subdivision
22shall be confidential by law and privileged, shall not be subject to
23subpoena, and shall not be subject to discovery or admissible in
24evidence in any private civil action.

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The Legislature finds and declares that Section 1 of
26this act, which amends Section 1215.8 of the Insurance Code,
27imposes limits on the public’s right of access to meetings of public
28bodies or the writings of public officials and agencies within the
29meaning of Section 3 of Article I of the California Constitution.
30Pursuant to that constitutional provision, the Legislature makes
31the following findings to demonstrate the interest protected by this
32limitation and the need for protecting that interest:

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33In order to protect proprietary information, it is necessary to
34enact legislation that limits the public’s right of access to insurance
35holding company system information that is provided pursuant to
36Section 1215.8 of the Insurance Code.

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