December 13, 2007, Introduced by Rep. Wojno and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 222 (MCL 500.222), as amended by 1994 PA 443.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 222. (1) The commissioner in person or by any of his or
her authorized deputies or examiners may examine any or all of the
books, records, documents, and papers of any insurer at any time
after its articles of incorporation have been executed and filed,
or after it has been authorized to do business in this state. The
commissioner in his or her discretion may examine the affairs of
any domestic insurer, and if he or she considers it expedient to
do, to examine the affairs of any foreign or alien insurer doing
business in this state.
(2) Instead of an examination under this act of any foreign or
alien insurer authorized to do business in this state, the
commissioner may accept an examination report on the insurer as
prepared by the insurance regulator for the insurer's state of
domicile or port-of-entry state if that state accepts examination
reports prepared by the commissioner. This subsection applies only
as follows:
(a) Until this state becomes accredited by the national
association of insurance commissioners' financial regulation
standards and accreditation program.
(b) If this state loses accreditation by the national
association of insurance commissioners' financial regulation
standards and accreditation program.
(3) Instead of an examination under this act of any foreign or
alien insurer authorized to do business in this state, the
commissioner may accept an examination report on the insurer as
prepared by the insurance regulator for the insurer's state of
domicile or port-of-entry state if that state accepts examination
reports prepared by the commissioner and if the insurance
regulatory agency of the state of domicile or port-of-entry state
was accredited by the national association of insurance
commissioners' financial regulation standards and accreditation
program at the time of the examination or if the examination is
performed under the supervision of an accredited insurance
regulatory agency or with the participation of 1 or more examiners
who are employed by an accredited insurance regulatory agency and
who, after a review of the examination work papers and report,
state under oath that the examination was prepared in a manner
consistent with the standards and procedures required by their
accredited regulatory agency. This subsection only applies during
the time this state is accredited by the national association of
insurance commissioners' financial regulation standards and
accreditation program.
(4) The commissioner in person or by any of his or her
authorized deputies or examiners shall once every 5 years examine
the books, records, documents, and papers of each authorized
insurer. The commissioner may examine an insurer more frequently
and upon its request shall examine a domestic insurer that has not
been examined for the 3 years immediately preceding the request.
This section does not authorize the examination of books, records,
documents, or papers if those items involve matters that are a
subject of a currently pending administrative or judicial
proceeding against the insurer from whom the information is sought,
unless the commissioner or judge specifically finds on the record
of the proceeding that the examination is reasonably necessary to
protect the interests of policyholders, creditors, or the public or
to make a determination of whether an insurer is safe, reliable,
and entitled to public confidence.
(5) The business affairs, assets, and contingent liabilities
of insurers shall be subject to examination by the commissioner at
any time. The commissioner may supervise and make the same
examination of the business and affairs of every foreign or alien
insurer doing business in this state as of domestic insurers doing
the same kind of business and of its assets, books, accounts, and
general condition. Every foreign or alien insurer and its agents
and officers are subject to the same obligations and are subject to
the same examinations, and, in case of default therein, to the same
penalties and liabilities as domestic insurers doing the same kind
of business, or any of the agents or officers thereof, are or may
be liable to under the laws of this state or the rules or
regulations
of the office of financial and insurance bureau
services
of the department of commerce labor and economic growth.
The commissioner may, whenever he or she considers it expedient to
do so, either in person or by a proper person appointed by him or
her, repair to the general office or other offices of the foreign
or alien insurer, wherever the same may be, and make an
investigation and examination of its affairs and condition.
(6) Upon an examination under this section, the commissioner,
his or her deputy, or any examiner authorized by him or her may
examine in person, by writing, and if appropriate, under oath the
officers or agents of the insurer or all persons considered to have
material information regarding the insurer's property, assets,
business, or affairs. The commissioner may compel the attendance
and testimony of witnesses and the production of any books,
accounts, papers, records, documents, and files relating to the
insurer's business or affairs, and may sign subpoenas, administer
oaths and affirmations, examine witnesses, and receive evidence for
this purpose. The insurer and its officers and agents shall produce
its books and records and all papers in its or their possession
relating to its business or affairs, and any other person may be
required to produce any books, records, or papers considered
relevant to the examination for the inspection of the commissioner,
or his or her deputy or examiners, whenever required. The insurer's
officers or agents shall facilitate the examination and aid in
making the same so far as it is in their power to do so. If the
commissioner's order or subpoena is not followed, the commissioner
may request the Ingham county circuit court to issue an order
requiring compliance with the commissioner's order or subpoena.
(7) Not later than 60 days following completion of the
examination, the deputy or examiners shall make a full and true
report, and furnish the insurer a copy of the examination report
that shall comprise only facts appearing on the insurer's books,
records, or documents or ascertained from examination of its
officers or agents or other persons concerning its affairs and the
conclusions and recommendations as may be reasonably warranted from
the facts disclosed. An insurer examined, upon its request, shall
be granted a hearing before the commissioner or his or her designee
before the report is filed. Upon request of the insurer, the
hearing shall be closed to the public. A hearing under this
subsection is not subject to the administrative procedures act of
1969,
Act No. 306 of the Public Acts of 1969, being sections 24.201
to
24.328 of the Michigan Compiled Laws 1969 PA 306, MCL 24.201 to
24.328. Each examination report shall be withheld from public
inspection until the report is final and filed with the
commissioner. In addition, the commissioner may withhold any
examination report or any analysis of an insurer's financial
condition
from public inspection for such time as he or she may
consider
considers proper. In any event, all information and
testimony
furnished to the office of
financial and insurance bureau
services
and the office of financial and insurance
bureau's
services's work papers, correspondence, memoranda, reports,
records, and other written or oral information related to an
examination report or an investigation shall be withheld from
public inspection, shall be confidential, shall not be subject to
subpoena, and shall not be divulged to any person, except as
provided in this section. If assurances are provided that the
information will be kept confidential, the commissioner may
disclose confidential work papers, correspondence, memoranda,
reports, records, or other information as follows:
(a) To the governor or the attorney general.
(b)
To any relevant regulatory agency
, including regulatory
agencies
of other states or the federal government of this state,
any other state of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, any territory of or possession of the
United States, the United States government, or any foreign country
or any political subdivision of a foreign country.
(c) In connection with an enforcement action brought pursuant
to this or another applicable act.
(d) To law enforcement officials.
(e) To persons authorized by the Ingham county circuit court
to receive the information.
(f) To persons entitled to receive such information in order
to discharge duties specifically provided for in this act.
(8) The confidentiality requirements of subsection (7) do not
apply in any proceeding or action brought against or by the insurer
under this act or any other applicable act of this state, any other
state, or the United States.
(9) Notwithstanding the other provisions of this section, the
commissioner is not required to finalize and file an examination
report for an insurer for a year in which an examination report was
not finalized and filed, if the insurer is currently undergoing an
examination subsequent to the year for which an examination report
was not finalized and filed. Nothing contained in this section
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.
(10) The examination of an alien insurer is limited to its
United States business, except as otherwise required by the
commissioner.