(A) Examination reports must be comprised of only facts appearing upon the books, records, or other documents of the insurer, its agents, or other persons examined or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs and the conclusions and recommendations the examiners find reasonably warranted from the facts.

(B) No later than sixty days following completion of the examination, the examiner in charge shall file with the department a verified written report of examination under oath. Upon receipt of the verified report, the department shall transmit the report to the insurer examined with a notice which affords the insurer a reasonable opportunity of not more than thirty days to make a written submission or rebuttal with respect to matters contained in the examination report.

(C) After the expiration of the thirty-day period allowed for the receipt of written submissions or rebuttals, the director or his designee shall consider and review the report fully with written submissions or rebuttals and relevant portions of the examiner's work papers and enter an order:

(1) adopting the examination report as filed or with modification or corrections. If the examination report reveals that the insurer is operating in violation of law, regulation, or prior order of the director or his designee, he may order the insurer to take action the director or his designee considers necessary and appropriate to cure the violation;

(2) rejecting the examination report with directions to the examiners to reopen the examination to obtain additional data, documentation, or information and refiling pursuant to subsection (A); or

(3) calling for an investigatory hearing with no less than twenty days' notice to the insurer to obtain additional documentation, data, information, and testimony.

(D)(1) Orders entered pursuant to subsection (C)(1) must be accompanied by findings and conclusions resulting from the director's or his designee's consideration and review of the examination report, relevant examiner work papers, and written submissions or rebuttals. The order must be considered a final administrative decision and may be appealed to the Administrative Law Court as provided by law. The order must be served upon the insurer by certified mail, with a copy of the adopted examination report. Within thirty days of the issuance of the adopted report, the insurer shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders.

(2) A hearing conducted under subsection (C)(3) by the director or his authorized representative must be conducted as a nonadversarial, confidential investigatory proceeding as necessary for the resolution of inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the director's or his designee's review of relevant work papers or by the written submission or rebuttal of the insurer. Within twenty days of the conclusion of the hearing, the director or his designee shall enter an order pursuant to subsection (C)(1).

(a) The director may not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the insurer limited to the examiner's work papers which tend to substantiate assertions set forth in a written submission or rebuttal. The director or his representative may issue subpoenas for the attendance of witnesses or the production of documents considered relevant to the investigation whether under the control of the department, the insurer, or other persons. The documents produced must be included in the record, and testimony taken by the director or his representative must be under oath and preserved for the record. Nothing contained in this section requires the department to disclose information or records which indicate or show the existence or content of an investigation or activity of a criminal justice agency.

(b) The hearing shall proceed with the director or his representative posing questions to the person subpoenaed. After the questions the insurer and the department may present testimony relevant to the investigation. Cross examination may be conducted only by the director or his representative. The insurer and the department may make closing statements and be represented by counsel of their choice.

(E)(1) Upon completion of the examination report under subsection (C)(1), the director or his designee shall hold the content of the examination report as private and confidential information for the thirty-day period provided for written submissions or rebuttals. Thirty days after the examination report has been submitted to it if the insurer examined has neither notified the director or his designee of its acceptance and approval of the report nor requested to be heard on it, the report must be filed as a public document and is open to public inspection, as long as no court of competent jurisdiction has stayed its publication.

(2) This section does not prohibit the director or his designee from disclosing the content of an examination report, preliminary examination report, or results or related matters to the insurance department of this or another state or country, or law enforcement officials of this or another state or agency of the federal government so long as the agency or office receiving the reports, results, or related matters agrees in writing to hold them confidential and in a manner consistent with Sections 38-13-10 through 38-13-60.

(3) If the director or his designee determines that regulatory action is appropriate as a result of an examination, he may initiate proceedings or actions provided by law.

(F) All work papers, recorded information, documents, and their copies produced by, obtained by, or disclosed to the director, his designee, or other persons in the course of an examination made under this chapter must be given confidential treatment, are not subject to subpoena, and must not be made public by the director, or other persons, except to the extent provided in subsection (E). Access also may be granted to the National Association of Insurance Commissioners. The parties shall agree in writing before receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the insurer to which it pertains has been obtained or unless ordered by a court of competent jurisdiction. The information may be provided to the consumer advocate as provided in Section 37-6-605 pursuant to an appropriate proprietary agreement to ensure confidentiality.

HISTORY: Former 1976 Code Section 38-13-30 [1947 (45) 322; 1952 Code Section 37-603; 1962 Code Section 37-603] recodified as Section 38-15-10 by 1987 Act No. 155, Section 1; Former 1976 Code Section 38-5-1260 [1947 (45) 322; 1952 Code Section 37-283; 1962 Code Section 37-283] recodified as Section 38-13-30 by 1987 Act No. 155, Section 1; 1992 Act No. 394, Section 1; 1993 Act No. 181, Section 537.