Mass. Gen. Laws ch. 176P, sec. 36 — MA Code / Part I / Title XXII / Chapter 176P / Section 36
Examinations of domestic societies by commissioner; confidentiality and privilege; proceedings brought by attorney general against domestic societies
Status: in_force

Section 36. (a) The commissioner, or any person designated by him, may examine the affairs of any domestic society. The commissioner may employ assistants for the purpose of such examination and he or any person designated by him shall have free access to all the books, papers and documents relating to the business of the society, and may summon and qualify as witnesses on oath and examine its officers, agents and employees and other persons in relation to the affairs, transactions and condition of the society. The latest report of each examination made by the commissioner shall be read at the next succeeding convention of any society on the lodge system, as defined in section 2, and thereafter a copy thereof shall be filed at the home office of the society. Whoever, without justifiable cause neglects, when duly summoned, to appear and testify before the commissioner or his authorized representative, or whoever obstructs the commissioner or his representative in making an examination under this section, shall be punished by a fine of not more than $1,000 or by imprisonment for not more than one year. Notwithstanding any other provision of the General Laws, including clause Twenty-sixth of section 7 of chapter 4 and chapter 66, documents, materials or other information, including but not limited to, all working papers and copies thereof created, produced or obtained by or disclosed to the commissioner or any other person in the course of an examination made pursuant to this subsection, or in the course of analysis by the commissioner of the financial condition or market conduct of a limited society shall be confidential by law and privileged, shall not be a public record under said clause Twenty-sixth, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioner's official duties. Documents, materials or other information, including but not limited to, all working papers and copies thereof in the possession or control of the National Association of Insurance Commissioners and its affiliates and subsidiaries shall be confidential by law and privileged, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action if they are: (i) created, produced, obtained by or disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries in the course of the National Association of Insurance Commissioners and its affiliates and subsidiaries assisting an examination made pursuant to this subsection or assisting the commissioner in the analysis of the financial condition or market conduct of a limited society; or (ii) disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this subsection by any member of the National Association of Insurance Commissioners. Neither the commissioner nor any person who received the documents, material or other information while acting under the authority of the commissioner, including the National Association of Insurance Commissioners and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information subject to this subsection. In order to assist in the performance of the commissioner's duties, the commissioner: (i) may share documents, materials or other information, including the confidential and privileged documents, materials or information subject to this subsection, with other state, federal and international regulatory agencies, the National Association of Insurance Commissioners and its affiliates and subsidiaries and state, federal and international law enforcement authorities provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication or other information; (ii) may receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries and regulatory and law enforcement officials of other foreign or domestic jurisdictions and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and (iii) may enter into agreements governing sharing and use of information consistent with this subsection. No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this subsection or as a result of sharing as authorized in this subsection. A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall be available and enforced in any proceeding in and in any court of the commonwealth. (b) Whenever the commissioner is satisfied that any domestic society (1) has failed to comply with any provision of this chapter; (2) has exceeded its powers; (3) is not carrying out its contracts in good faith; (4) is transacting business fraudulently; (5) that its management or condition is such as to render its further transaction of business hazardous to the public, its members or creditors; (6) that such a society after the existence of one year or more, has a membership of less than 400, or determines to discontinue its business; or (7) whenever any such society, or any of its officers or agents, has refused to submit to an examination under this section or to perform any legal obligation relative thereto, the commissioner may present the relative facts to the attorney general, who shall, if he deems the circumstances warrant, begin a quo warranto proceeding in the supreme judicial court. The court may forthwith issue a temporary injunction restraining the society from further transacting any business. After a full hearing, if it then appears that the society should be dissolved, the court may make the injunction permanent, and appoint one or more receivers to take possession of the books, papers, moneys and other assets of the society, to settle its affairs and to distribute its funds to those entitled thereto, subject to such rules and orders as the court may prescribe. (c) No such proceedings shall be begun by the attorney general until after the commissioner has given written notice to the chief executive officers of the society and has afforded a reasonable opportunity, on a date named in such notice, to show cause why such a proceeding should not be begun. Such a proceeding shall be entertained only if brought by the attorney general.

Section 36. (a) The commissioner, or any person designated by him, may examine the affairs of any domestic society. The commissioner may employ assistants for the purpose of such examination and he or any person designated by him shall have free access to all the books, papers and documents relating to the business of the society, and may summon and qualify as witnesses on oath and examine its officers, agents and employees and other persons in relation to the affairs, transactions and condition of the society. The latest report of each examination made by the commissioner shall be read at the next succeeding convention of any society on the lodge system, as defined in section 2, and thereafter a copy thereof shall be filed at the home office of the society. Whoever, without justifiable cause neglects, when duly summoned, to appear and testify before the commissioner or his authorized representative, or whoever obstructs the commissioner or his representative in making an examination under this section, shall be punished by a fine of not more than $1,000 or by imprisonment for not more than one year.

Notwithstanding any other provision of the General Laws, including clause Twenty-sixth of section 7 of chapter 4 and chapter 66, documents, materials or other information, including but not limited to, all working papers and copies thereof created, produced or obtained by or disclosed to the commissioner or any other person in the course of an examination made pursuant to this subsection, or in the course of analysis by the commissioner of the financial condition or market conduct of a limited society shall be confidential by law and privileged, shall not be a public record under said clause Twenty-sixth, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioner's official duties.

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

(i) created, produced, obtained by or disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries in the course of the National Association of Insurance Commissioners and its affiliates and subsidiaries assisting an examination made pursuant to this subsection or assisting the commissioner in the analysis of the financial condition or market conduct of a limited society; or

(ii) disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries pursuant to this subsection by any member of the National Association of Insurance Commissioners.

Neither the commissioner nor any person who received the documents, material or other information while acting under the authority of the commissioner, including the National Association of Insurance Commissioners and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information subject to this subsection.

In order to assist in the performance of the commissioner's duties, the commissioner:

(i) may share documents, materials or other information, including the confidential and privileged documents, materials or information subject to this subsection, with other state, federal and international regulatory agencies, the National Association of Insurance Commissioners and its affiliates and subsidiaries and state, federal and international law enforcement authorities provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication or other information;

(ii) may receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the National Association of Insurance Commissioners and its affiliates and subsidiaries and regulatory and law enforcement officials of other foreign or domestic jurisdictions and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and

(iii) may enter into agreements governing sharing and use of information consistent with this subsection.

No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this subsection or as a result of sharing as authorized in this subsection.

A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection shall be available and enforced in any proceeding in and in any court of the commonwealth.

(b) Whenever the commissioner is satisfied that any domestic society (1) has failed to comply with any provision of this chapter; (2) has exceeded its powers; (3) is not carrying out its contracts in good faith; (4) is transacting business fraudulently; (5) that its management or condition is such as to render its further transaction of business hazardous to the public, its members or creditors; (6) that such a society after the existence of one year or more, has a membership of less than 400, or determines to discontinue its business; or (7) whenever any such society, or any of its officers or agents, has refused to submit to an examination under this section or to perform any legal obligation relative thereto, the commissioner may present the relative facts to the attorney general, who shall, if he deems the circumstances warrant, begin a quo warranto proceeding in the supreme judicial court. The court may forthwith issue a temporary injunction restraining the society from further transacting any business. After a full hearing, if it then appears that the society should be dissolved, the court may make the injunction permanent, and appoint one or more receivers to take possession of the books, papers, moneys and other assets of the society, to settle its affairs and to distribute its funds to those entitled thereto, subject to such rules and orders as the court may prescribe.

(c) No such proceedings shall be begun by the attorney general until after the commissioner has given written notice to the chief executive officers of the society and has afforded a reasonable opportunity, on a date named in such notice, to show cause why such a proceeding should not be begun. Such a proceeding shall be entertained only if brought by the attorney general.