N.H. Rev. Stat. § 400-A:37 — NH Code / Title XXXVII / Chapter 400-A / Section 37
400-A:37 Examinations.
Status: repealed

I. (a) Authority, Scope, and Scheduling of Examinations. The commissioner or any of his or her examiners may conduct an examination of any company as often as the commissioner deems appropriate. In scheduling and determining the nature, scope and frequency of the examinations, the commissioner shall consider the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent Certified Public Accountants and other criteria as set forth in the Financial Condition Examiners' Handbook or the Market Regulation Handbook in effect and adopted by the National Association of Insurance Commissioners. Except as otherwise expressly provided, the commissioner shall examine each domestic insurer at least once every 5 years, and he or she shall annually examine, value, or cause to be valued the reserve liabilities, including loss adjustment expense reserves, of each domestic insurer. For the purpose of making the annual valuation of the reserve liabilities for all outstanding life insurance policies and annuity and pure endowment contracts of domestic insurance companies, the commissioner may employ a competent actuary who shall make such valuation of a company's contractual obligations and the company's compliance with the law. (b) For purposes of completing an examination of any company under this title, the commissioner may examine or investigate any person, or the business of any person, in so far as such examination or investigation is, in the sole discretion of the commissioner, necessary or material to the examination of the company. (c) In lieu of an examination of any foreign or alien insurer licensed in this state, the commissioner may accept an examination report on the company as prepared by the insurance department for the company's state of domicile or port-of-entry state until January 1, 1994. Thereafter, such reports may only be accepted if: (1) The insurance department was at the time of the examination accredited under the National Association of Insurance Commissioners' Financial Regulation Standards and Accreditation Program; or (2) The examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department. II. Examination of Non-Insurance Company Licenses. For the purpose of ascertaining compliance with law or relationships and transactions between any person and any insurer or proposed insurer, and in circumstances where the commissioner has reasonable grounds to believe there is noncompliance with or violation of law, regulation, or order, he or she may, as often and to the extent he or she deems advisable, examine the accounts, records, documents, and transactions pertaining to or affecting the insurance affairs or proposed insurance affairs and transactions of: (a) Any insurance producer, adjuster, insurer representative, or any person holding himself or herself out as any of the foregoing. (Provided, however, that if upon examination of any person specified in this paragraph the commissioner shall determine that such person is not in violation of the provisions of Title XXXVII or applicable regulations, the expense of the examination shall be borne by the insurance department.) (b) Any person having a contract under which he enjoys by terms or in fact the exclusive or dominant right to manage or control the insurer. (c) Any person in this state engaged in, or proposing to be engaged in this state in, or holding himself out in this state as so engaging or proposing, or in this state assisting in, the promotion, formation, or financing of an insurer or insurance holding corporation, or corporation or other group to finance an insurer or the production of its business. (d) Any rating bureau or organization. (e) Any licensee or other person subject to this title. (f) Or if adequate information cannot be obtained, any insurance holding company; or person holding the shares of voting stock or policyholder proxies of an insurer as voting trustee or otherwise, for the purpose of controlling the management thereof. III. Conduct of Examinations. (a) Upon determining that an examination should be conducted, the commissioner or the commissioner's designee shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Financial Condition Examiners' Handbook or the Market Regulation Handbook adopted by the National Association of Insurance Commissioners. The commissioner may also employ such other guidelines or procedures as the commissioner may deem appropriate. (b)(1) Every company or person from whom information is sought, its officers, directors and agents must provide to the examiners timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents and any or all computer or other recordings relating to the property, assets, business and affairs of the company being examined. The officers, directors, employees and agents of the company or person must facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension or refusal of, or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the commissioner's jurisdiction. Any such proceedings for suspension, revocation, or refusal of a license or authority shall be conducted pursuant to RSA 400-A:15, III. (2) Neither the commissioner nor any examiner shall remove any record, account, document, file, or other property of the person being examined from the office or place of such person except with the written consent of such person in advance of such removal or pursuant to an order of court duly obtained. This subparagraph shall not be deemed to affect the making and removal of copies or abstracts of any such record, account, document, or file. (c) The commissioner or any of his examiners shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of any person to obey a subpoena, the commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. (d) When making an examination under this title, the commissioner may retain, without appropriation under RSA 9 and without qualifying as a department expenditure under RSA 4:15, attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the cost of which shall be borne by the company which is the subject of the examination. The company shall pay the retained professional or specialist directly for these costs. (e) Nothing contained in this title shall be construed to limit the commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action. (f) Nothing contained in this title shall be construed to limit the commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the commissioner may, in his discretion, deem appropriate. (g) For the purposes of this section "person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, and any similar entity or any combination of such entities acting in concert. IV. Exam Report, Distribution, Procedure. (a) No later than 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 which shall afford the company examined 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report. The company examined may request, within the 30 day period and for good cause shown, additional time to make the written submission or rebuttal. (b) Within 30 days 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 workpapers and enter an order: (1) 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 such violation; (2) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling as provided in subparagraph (a); or (3) Calling for an investigatory hearing with no less than 20 days notice to the company for purposes of obtaining additional documentation, data, information, and testimony. (c)(1) Upon the adoption of the examination report, the commissioner shall continue to hold the content of the examination report as private and confidential information for a period of 20 days, except as otherwise provided in this chapter. (2) If requested by the person examined within 20 days after receipt of the order adopting the examination report, or if deemed advisable by the commissioner, the commissioner shall hold a closed meeting relative to the report. The closed meeting shall be conducted within 20 days after a request for closed meeting. Any order of the commissioner issued pursuant to RSA 400-A:37, IV(b)(1) shall be suspended pending a final decision of the commissioner after the closed meeting and the commissioner shall not file the report until after such closed meeting and his or her final order on the report; except that the commissioner may furnish a copy of the examination report: (A) To the governor, attorney general, or treasurer pending the closed meeting and final decision thereon; and (B) As otherwise provided in this chapter. (3) After the closed meeting, the commissioner shall issue a final order on the report and shall file the final report. The commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure any violation. Twenty days after the report is filed as a final report, the commissioner may open the report for public inspection if no court of competent jurisdiction has stayed its publication. (4) If no request for a closed meeting is filed, the commissioner shall issue a final order on the report, shall file the final report, and may take all other appropriate action as set forth in subparagraph (3). (5) A final report shall be filed, and any order shall be issued within 6 months after the adoption of the examination report. (6) If the report is an examination of a domestic insurer, a copy of the report, or a summary approved by the commissioner, when filed in the department, together with the recommendations or statements of the commissioner or his or her examiner, shall be presented by the insurer's chief executive officer to the insurer's board of directors or similar governing body at a meeting which shall be held within 90 days following receipt of the report in final form by the insurer. A copy of the report shall also be furnished by the secretary of the insurer, if incorporated, or by the attorney-in-fact if a reciprocal insurer, to each member of the insurer's board of directors or board of governors, if a reciprocal insurer. The certificate of the secretary or attorney-in-fact that a copy of the examination report has been furnished to such persons shall constitute knowledge of the contents of the report by each such member. (7) The final report after filing shall be admissible in evidence in accordance with rules of the superior court, in any action or proceeding brought by the commissioner against the person examined, or against its officers, employees, or agents. In any such action or proceeding, the commissioner or the commissioner's examiners may, however, at any time testify and offer proper evidence as to information secured or matters discovered during the course of an examination, whether or not a final written report of the examination has been made, furnished, or filed in the department. (d) Nothing contained in this title 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 thereto, to the insurance department of this or any other state or country, or to law enforcement officials of this or any other state agency of the federal government at any time, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this title. (e) In the event the commissioner determines that regulatory action is appropriate as a result of any examination, he or she may initiate any proceedings or actions as provided by law. IV-a. Privilege for and Confidentiality of Reports and Ancillary Information. (a) Except as provided in subparagraph IV(d) and in this subparagraph, all documents, materials, or other information, including, but not limited to, models or products provided by an entity separate from and not under direct or indirect corporate control of the company using the model or product, working papers, complaint logs, and copies thereof created, produced or obtained by or disclosed to the commissioner or any other person in the course of an examination made under this title, or in the course of analysis by the commissioner of the financial condition or market conduct of a company shall not be made public by the commissioner or any other person and shall be confidential by law and privileged, shall not be subject to RSA 91-A, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to 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. (b) 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: (1) Created, produced, or 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 under this chapter, or assisting a commissioner in the analysis of the financial condition or market conduct of a company; or (2) Disclosed to the National Association of Insurance Commissioners and its affiliates and subsidiaries under subparagraph (b)(1) by a commissioner. (c) For the purposes of subparagraph (b), this chapter includes the law of another state or jurisdiction that is substantially similar to this chapter. (d) 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 other information subject to subparagraphs (a) and (b). (e) In order to assist in the performance of the commissioner's duties, the commissioner: (1) May share documents, materials, or other information, including the confidential and privileged documents, materials, or information subject to subparagraphs (a) and (b), with other state, federal, and international regulatory agencies including the Bank for International Settlements, with the International Association of Insurance Supervisors or the National Association of Insurance Commissioners and their affiliates and subsidiaries, and with 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. (2) 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 from 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 (3) May enter into agreements governing sharing and use of information consistent with this subparagraph. (4) May disclose the content of an examination report, preliminary examination report or results, or any matter relating thereto relative to workers' compensation audits, to the department of labor, and all such information or matter relating thereto in the possession or control of the department of labor shall be confidential by law and privileged, shall not be subject to disclosure under RSA 91-A, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. (f) 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 paragraph or as a result of sharing as authorized in subparagraph (e). (g) A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this paragraph shall be available and enforced in any proceeding in, and in any court of, this state. (h) In this paragraph "department," "insurance department," "law enforcement agency," "regulatory agency," and the "National Association of Insurance Commissioners" include, but are not limited to, their employees, agents, consultants, and contractors. V. [Repealed.] VI. [Repealed.] VII. Examination Expense. The insurer or other person examined pursuant to this section shall bear the expense of the examination. Such expense shall be limited to expenses charged pursuant to RSA 400-A:37, III(d) and a reasonable per diem allowance for compensation and expenses for state employee examiners as determined by the commissioner. As to the per diem expense allowance and compensation allowance involved in any such examination, the commissioner may give due consideration to scales and limitations recommended by the National Association of Insurance Commissioners and outlined in the examination manual sponsored by that association. Provided, however, that if upon examination of any person specified in RSA 400-A:37, II(a) the commissioner shall determine that such person is not in violation of the provisions of Title XXXVII or applicable regulations, the expense of the examination shall be borne by the department. VIII. State Employee Examiners. Notwithstanding any other provision of law, the insurer or other person liable for the travel expense of an examination pursuant to RSA 400-A:37, VII shall make such payment either directly to the state employee examiner conducting the examination, whether or not such individual is in the classified system, or to the state of New Hampshire, as may be directed by the commissioner. The commissioner may direct that the travel expense allowance be paid directly to the individual conducting the examination. The compensation allowance charged for work by state employee examiners shall be paid directly to the state. The amounts paid directly to individuals conducting the examination pursuant to this paragraph may be in excess of any amounts that may be appropriated for such purposes. IX. Immunity From Liability. (a) No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner's authorized representatives, or an examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this chapter. (b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner's authorized representative, or examiner pursuant to an examination made under this chapter, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. (c) This paragraph shall not abrogate or modify in any way common law or statutory privilege or immunity heretofore enjoyed by any person identified in subparagraph (a). (d) A person identified in subparagraph (a) shall be entitled to an award of attorney's fees and costs if he or she is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For the purposes of this paragraph, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated.