§ 27-13.1-5 - Examination reports. - Rhode Island Statutes

SECTION 27-13.1-5

   § 27-13.1-5  Examination reports. –(a) General description. An examination report shall be comprised ofonly facts appearing upon the books, records, or other documents of thecompany, its agents or other persons examined, or as ascertained from thetestimony of its officers or agents or other persons examined concerning itsaffairs, and such conclusions and recommendations as the examiners findreasonably warranted from the facts.

   (b) Filing of examination report. No later than sixty(60) days following completion of the examination, the examiner in charge shallfile with the department a verified written report of examination under oath.Upon receipt of the verified report, the department shall transmit the reportto the company examined, together with a notice that shall require that thecompany examined file with the director a written response to all comments andrecommendations contained in the examination report within thirty (30) days.The response shall include a written plan of how and when the comments andrecommendations contained in the examination report will be corrected and/orimplemented. For each comment and recommendation, the response must include animplementation date and a completion date for each corrective action. In lieuof these requirements, the company may submit a rebuttal to any comment orrecommendation contained in the examination report.

   (c) Adoption of report on examination. Within thirty(30) days of the end of the period allowed for the receipt of written responsesor rebuttals, the director shall fully consider and review the report, togetherwith any written responses or rebuttals and any relevant portions of theexaminer's workpapers and enter an order:

   (1) Adopting the examination report as filed or withmodification or corrections. If the examination report reveals that the companyis operating in violation of any law, regulation, or prior order of thedirector, the director may order the company to take any action the directorconsiders necessary and appropriate to cure the violation; or

   (2) Rejecting the examination report with directions to theexaminers to reopen the examination for the purposes of obtaining additionaldata, documentation, or information, and refiling pursuant to this section; and

   (3) Calling for an investigatory hearing with no less thantwenty (20) days notice to the company for the purposes of obtaining additionaldocumentation, data, information, and testimony.

   (d) Orders and procedures. (1)  All ordersentered pursuant to this section shall be accompanied by findings andconclusions resulting from the director's consideration and review of theexamination report, relevant examiner workpapers, and any written responses orrebuttals. Any order shall be considered a final administrative decision andmay be appealed pursuant to the Administrative Procedures Act, chapter 35 oftitle 42, and shall be served upon the company by certified mail, together witha copy of the adopted examination report. Within thirty (30) days of theissuance of the adopted report, the company shall file affidavits executed byeach of its directors stating under oath that they have received a copy of theadopted report and related orders.

   (2) Any hearing conducted under this section by the directoror authorized representative shall be conducted as a nonadversarialconfidential investigatory proceeding as necessary for the resolution of anyinconsistencies, discrepancies, or disputed issues apparent upon the face ofthe filed examination report or raised by or as a result of the director'sreview of relevant workpapers or by the written response or rebuttal of thecompany. Within twenty (20) days of the conclusion of any hearing, the directorshall enter an order pursuant to this section.

   (ii) The director shall not appoint an examiner as anauthorized representative to conduct the hearing. The hearing shall proceedexpeditiously with discovery by the company limited to the examiner'sworkpapers that tend to substantiate any assertions set forth in any writtenresponse or rebuttal. The director or his or her representative may issuesubpoenas for the attendance of any witnesses or the production of anydocuments deemed relevant to the investigation whether under the control of thedepartment, the company, or other persons. The documents produced shall beincluded in the record and testimony taken by the director or his or herrepresentative shall be under oath and preserved for the record.

   (iii) Nothing contained in this section shall require thedepartment to disclose any information or records that would indicate or showthe existence or content of any investigation or activity of a criminal justiceagency.

   (iv) The hearing shall proceed with the director or his orher representative posing questions to the persons subpoenaed. Thereafter, thecompany and the department may present testimony relevant to the investigation.Cross-examination shall be conducted only by the director or his or herrepresentatives. The company and the department shall be permitted to makeclosing statements and may be represented by counsel of their choice.

   (e) Publication and use. (1)  Upon theadoption of the examination report under this section, the director shallcontinue to hold the content of the examination report as private andconfidential information for a period of thirty (30) days, except to the extentprovided in subsection (b). After this, the commissioner may open the reportfor public inspection so long as no court of competent jurisdiction has stayedits publication;

   (2) Nothing contained in this title shall prevent or beconstrued as prohibiting the commissioner from disclosing the content of anexamination report, preliminary examination report or results, or any matterrelating thereto, to the insurance department of this or any other state orcountry, or to law enforcement officials of this or any other state or agencyof the federal government at any time, so long as the agency or officereceiving the report or matters relating thereto agrees in writing to hold itconfidential and in a manner consistent with this chapter;

   (3) In the event the director determines that regulatoryaction is appropriate as a result of any examination, he or she may initiateany proceedings or actions as provided by law.

   (1) Except as provided in section 5(e) above and in thissubsection, documents, materials, or other information, including, but notlimited to, all working papers, and copies thereof, created, produced by,obtained by, or disclosed to the director or any other person in the course ofan examination made under this chapter, or in the course of analysis by thedirector of the financial condition or market conduct of a company shall beconfidential by law and privileged, shall not be subject to the Access toPublic Records Act, chapter 38-2, shall not be subject to subpoena, and shallnot be subject to discovery or be admissible in evidence in any private civilaction. The director is authorized to use the documents, materials, or otherinformation in the furtherance of any regulatory or legal action brought aspart of the director's official duties.

   (ii) Documents, materials or other information, including,but not limited to, all working papers, and copies thereof, in the possessionor control of the National Association of Insurance Commissioners and itsaffiliates and subsidiaries shall be confidential by law and privileged, shallnot be subject to subpoena, and shall not be subject to discovery or admissiblein evidence in any private civil action if they are:

   (A) Created, produced or obtained by or disclosed to theNational Association of Insurance Commissioners and its affiliates andsubsidiaries in the course of the National Association of InsuranceCommissioners and its affiliates and subsidiaries assisting an examination madeunder this chapter, or assisting a director in the analysis of the financialcondition or market conduct of a company; or

   (B) Disclosed to the National Association of InsuranceCommissioners and its affiliates and subsidiaries under subdivision (3) of thissubsection by a director or commissioner.

   (iii) For the purposes of paragraph (f)(1)(i), "act" includesthe law of another state or jurisdiction that is substantially similar to thisact.

   (2) Neither the director nor any person who received thedocuments, material or other information while acting under the authority ofthe director, including the National Association of Insurance Commissioners andits affiliates and subsidiaries, shall be permitted to testify in any privatecivil action concerning any confidential documents, materials or informationsubject to subdivision (f)(1).

   (3) In order to assist in the performance of the director'sduties, the director:

   (i) May share documents, materials or other information,including the confidential and privileged documents, materials or informationsubject to subdivision (f)(1), with other state, federal and internationalregulatory agencies, with the National Association of Insurance Commissionersand its affiliates and subsidiaries, and with state, federal and internationallaw enforcement authorities, provided that the recipient agrees to maintain theconfidentiality and privileged status of the document, material, communicationor other information;

   (ii) May receive documents, materials, communications orinformation, including otherwise confidential and privileged documents,materials or information, from the National Association of InsuranceCommissioners and its affiliates and subsidiaries, and from regulatory and lawenforcement officials of other foreign or domestic jurisdictions, and shallmaintain as confidential or privileged any document, material or informationreceived with notice or the understanding that it is confidential or privilegedunder the laws of the jurisdiction that is the source of the document, materialor information; and

   (iii) May enter into agreements governing sharing and use ofinformation consistent with this subsection.

   (4) No waiver of any applicable privilege or claim ofconfidentiality in the documents, materials or information shall occur as aresult of disclosure to the director under this section or as a result ofsharing as authorized in subdivision (f)(3).

   (5) A privilege established under the law of any state orjurisdiction that is substantially similar to the privilege established underthis subsection shall be available and enforced in any proceeding in, and inany court of, this state.

   (6) In this subsection, the terms "department," "insurancedepartment," "law enforcement agency," "regulatory agency," and the "NationalAssociation of Insurance Commissioners" include, but are not limited to, theiremployees, agents, consultants and contractors.