TCA § 56-1-411 — Extent of examination — Report — Hearing — Order — Penalty — Confidentiality of records

In the course of the examination, the commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of making the examination may examine: Any insurance company transacting, or being organized to transact, business in this state; Any corporation, association, or person engaged in or proposing to be engaged in the organization, promotion or solicitation of shares or capital contributions to, or aiding in the formation of, an insurance company; As an incident to the examination of the insurance company itself, any corporation, association, or person holding shares of capital stock of an insurance company for the purpose of controlling the management of the insurance company as voting trustee or otherwise; As an incident to the examination of the insurance company itself, any corporation, association, or person having a contract, written or oral, pertaining to the management or control of an insurance company as general agent, managing agent or attorney-in-fact; As an incident to the examination of the insurance company itself, any corporation, association, or person that has substantial control, directly or indirectly, over any insurance company doing business in this state whether by ownership of its stock or otherwise, or any corporation, association, or person owning stock in any such insurance company, which stock constitutes a substantial proportion of the stock of the insurance company; Any subsidiary or affiliate of any insurance company doing business in this state; Any licensed agent, broker or solicitor or any corporation, association, or person making application for a license as an agent, broker or solicitor; and Any corporation, association, or person engaged in the business of adjusting losses or financing premiums. Every company, corporation, association, or person being examined, its officers, directors and agents, shall provide to the commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of the examination, convenient and free access at its office to all books, records, securities, documents and any and all papers relating to the property, assets, business and affairs of the company. The officers, directors and agents of the company, corporation, association or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of the examination, has the power to: Administer oaths and to examine under oath any person relative to the business of the company; and Appraise or cause to be appraised by competent appraisers appointed by the commissioner or such other person all property in which the company has or claims an interest or that is security in any form for the payment of any debt or obligation to the company. The commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of the examination, shall make a full and true report of the examination, which shall comprise only facts ascertained from the books, papers, records, securities or documents or other evidence obtained by investigation and examined by them or ascertained from the testimony of officers or agents or other persons examined under oath concerning the business, affairs, assets and obligations of the company. The report of examination shall be verified by the oath of the examiner in charge of the examination and shall be prima facie evidence in any action or proceeding in the name of the state against the company, its officers or agents upon the facts stated in the report. In the conduct of an examination, the criteria as set forth in the Examiners Handbook adopted by the National Association of Insurance Commissioners and the National Association of Insurance Commissioners Accounting Practices and Procedures Manuals that were in effect when the commissioner exercised discretion to make an examination under or to take other action permitted by this chapter shall be used. The commissioner may also employ other guidelines or procedures the commissioner deems appropriate. No later than sixty (60) 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 company examined, together with a notice that affords the company examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report. Within thirty (30) days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's work papers and enter an order: Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure the violation; Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling pursuant to subdivision (c)(2); or Calling for an investigatory hearing with no less than twenty (20) days' notice to the company for purposes of obtaining additional documentation, data, information and testimony. If the examination reveals that the company is operating in violation of any law, regulation or prior order, the commissioner, in the written order, may require the company to take any action the commissioner considers necessary or appropriate in accordance with the report of examination or the hearing, if any, on the report. That order shall be subject to judicial review in accordance with title 27, chapter 9. Nothing contained in this chapter shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating to the reports or results, to the department of insurance of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating to the reports agrees in writing to hold it confidential and in a manner consistent with this section. Any company, corporation, or association that, or person who, violates or aids and abets any violation of a written order issued pursuant to this section shall be punished by a fine of not more than five thousand dollars ($5,000), which shall be sued for and recovered pursuant to § 56-1-802. All working papers, recorded information, documents and copies of working papers, recorded information and documents produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this chapter must be given confidential treatment and may not be made public by the commissioner or any other person, except to the extent provided in subsection (d). Access may also be granted to the National Association of Insurance Commissioners. The parties must agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the company to which it pertains has been obtained.