2023 District of Columbia Code › Title 31 - Insurance and Securities › Chapter 14 - Law on Examinations › § 31–1404. Examination reports

§ 31–1404. Examination reports.
(a) General description. — All examination reports shall be comprised of only facts appearing upon the books, records, or other documents of the company, 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 those conclusions and recommendations as the examiners find reasonably warranted from the facts.
(b) Filing of examination report. — No later than 60 days following completion of the examination, the examiner in charge shall file with the Mayor a verified written report of examination under oath. Upon receipt of the verified report, the Mayor shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report.
(c) Adoption of report on examination. — Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the Mayor 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 Mayor, the Mayor may order the company to take any action the Mayor considers necessary and appropriate to cure the 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 pursuant to subsections (a) and (b) of this section; 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.
(d) Orders and procedures. —
(1) All orders entered pursuant to subsection (c)(1) of this section shall be accompanied by findings of fact and conclusions of law resulting from the Mayor’s consideration and review of the examination report, relevant examiner workpapers, and any written submissions or rebuttals. These orders shall be considered final administrative decisions and may be appealed to the Mayor pursuant to §§ 31-4332 and 31-2502.43 [repealed], and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within 30 days of the issuance of the adopted report, the company 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) Any hearing conducted under subsection (c)(3) of this section by the Mayor shall be conducted as a nonadversarial confidential investigatory proceeding necessary for the resolution of any inconsistencies, discrepancies, or disputed issues apparent upon the face of the filed examination report or raised by or as a result of the Mayor’s review of relevant workpapers or by the written submission or rebuttal of the company. Within 20 days of the conclusion of such a hearing, the Mayor shall enter an order pursuant to subsection (c)(1) of this section.
(A) The hearing shall proceed expeditiously with discovery by the company limited to the examiner’s workpapers which tend to substantiate any assertions set forth in any written submission or rebuttal. The Mayor may issue subpoenas for the attendance of any witnesses or the production of any documents deemed relevant to the investigation whether under the control of the Department, the company, or other persons. The documents produced shall be included in the record, and testimony taken by the Mayor shall be under oath and preserved for the record. Nothing contained in this section shall require the Department to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a criminal justice agency.
(B) The hearing shall proceed with the Mayor posing questions to the persons subpoenaed. Thereafter the company and the Department may present testimony relevant to the investigation. Cross examination shall be conducted only by the Mayor. The company and the Department shall be permitted to make closing statements and may be represented by counsel of their choice.
(e) Publication and use. —
(1) Upon the adoption of the examination report under subsection (c)(1) of this section, the Mayor shall continue to hold the content of the examination report as private and confidential information for a period of 10 days, except to the extent provided in subsection (b) of this section. Thereafter, the Mayor may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication.
(2) No District law shall prevent or be construed as prohibiting the Mayor from disclosing the content of an examination report, preliminary examination report, or results, or any related matter, to the Department or the department of insurance of any other state or country, or to law enforcement officials of the District or any other state or any agency of the federal government at any time, so long as the agency or office receiving the report or related matters agrees in writing to hold it confidential in a manner consistent with this chapter.
(3) In the event the Mayor determines that regulatory action is appropriate as a result of any examination, the Mayor may initiate any proceedings or actions as provided by the laws of the District.
(f) Confidentiality of ancillary information. — All working papers, recorded information, documents, and copies produced by, created by, obtained by, or disclosed to the Mayor or any other person in the course of an examination made under this chapter or in the course of analysis by the Commissioner of the financial condition or market conduct of a company shall be confidential and privileged; shall not be subject to subchapter II of Chapter 5 of Title 2; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a 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 all working papers, and copies, in the possession or control of the National Association of Insurance Commissioners, including its affiliates and subsidiaries, shall be confidential and privileged; shall not be subject to subpoena; and shall not be subject to discovery or admissible in evidence in a private civil action, if they are:
(1) Created, produced, or obtained by, or disclosed to, the National Association of Insurance Commissioners, including its affiliates and subsidiaries, while the National Association of Insurance Commissioners, including its affiliates and subsidiaries, are (A) assisting in an examination made under this chapter or an examination made by another jurisdiction with a law that is substantially similar to this chapter, or (B) assisting the Commissioner or the chief insurance regulatory official of another jurisdiction in the analysis of the financial condition or market conduct of a company; or
(2) Disclosed to the National Association of Insurance Commissioners, including its affiliates and subsidiaries, under subsection (f-2) of this section by the chief insurance regulatory official of another jurisdiction.
(f-1) The Commissioner or any person who received documents, material, or other information while acting under the authority of the Commissioner, including the National Association of Insurance Commissioners, including its affiliates and subsidiaries, shall not be permitted to testify in a private civil action concerning confidential documents, materials, or other information subject to subsection (f) of this section.
(f-2) To assist in the performance of the Commissioner’s duties, the Commissioner:
(1) May share documents, materials, or other information, including confidential and privileged documents, materials, or other information subject to subsection (f) of this section, with other state, federal, and international regulatory agencies; with the National Association of Insurance Commissioners, including its affiliates and subsidiaries; and with state, federal and international law enforcement authorities; provided, that the recipient agrees, and has the legal authority, to maintain the confidentiality and privileged status of the documents, materials, communication, or other information;
(2) May receive documents, materials, communications, or other information, including otherwise confidential and privileged documents, materials, or other information, from the National Association of Insurance Commissioners, including 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 other 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 other information; or
(3) May enter into agreements governing the sharing and use of information consistent with this subsection.
(f-3) No waiver of an applicable privilege or claim of confidentiality in the documents, materials, or other information shall occur as a result of disclosure to the Commissioner under this section or of sharing as authorized in subsection (f-2) of this section. Nothing in this section shall require an insurer to disclose documents, materials, or other information that is not otherwise required by law to be disclosed.
(f-4) A privilege established under the law of a state or jurisdiction that is substantially similar to the privilege established under this section shall be available and enforced in any proceeding in, and in any court of, the District.
(f-5) In this section, the terms “Department,” “insurance department,” “law enforcement agency,” “regulatory agency,” and “National Association of Insurance Commissioners” shall include their employees, agents, consultants, and contractors.
(Oct. 21, 1993, D.C. Law 10-49, § 5, 40 DCR 6110; Feb. 27, 1996, D.C. Law 11-90, § 7, 42 DCR 7155; May 21, 1997, D.C. Law 11-268, § 10(ff)(2), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-191, § 5, 47 DCR 7311.)
Prior Codifications
1981 Ed., § 35-3604.
Effect of Amendments
D.C. Law 13-191 rewrote subsec. (f) and added subsecs. (f-1) to (f-5). Prior to amendment, subsec. (f) provided: “(f) Confidentiality of ancillary information.—All working papers, recorded information, documents, and copies produced by, obtained by, or disclosed to the Mayor or any other person in the course of an examination made under this chapter must be given confidential treatment, are not subject to subpoena, and may not be made public by the Mayor or any other person, except to the extent provided in subsection (e) of this section. Access may also be granted to the National Association of Insurance Commissioners. Parties must agree in writing prior to receiving the information to provide it the same confidential treatment required by this section, unless the prior written consent of the company to which it pertains has been obtained.”
Emergency Legislation
For temporary amendment of section, see § 8 of the Insurance Omnibus Emergency Amendment Act of 1995 (D.C. Act 11-48, May 15, 1995, 42 DCR 2544) and § 7 of the Insurance Omnibus Congressional Recess Emergency Amendment Act of 1995 (D.C. Act 11-97, July 19, 1995, 42 DCR 3844).
Temporary Legislation
For temporary (225 day) amendment of section, see § 7 of Insurance Omnibus Temporary Amendment Act of 1995 (D.C. Law 11-36, September 8, 1995, law notification 42 DCR 5305).