Senate Bill No. 643
(By Senator Minard)
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[Introduced February 19, 2007; referred to the Committee on
Banking and Insurance.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §33-2-3a; and to
amend and reenact §33-2-7 and §33-2-19 of said code, all
relating to investigations of violations of insurance laws;
clarifying that the Insurance Commissioner may investigate
noncriminal violations; authorizing use of Class A
registration plates; clarifying that immunity granted in
certain cases applies to criminal prosecutions only; and
clarifying the authority and duties of the Insurance
Commissioner with regard to information obtained during
investigations.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §33-2-3a; and that §33-
2-7 and §33-2-19 of said code be amended and reenacted, all to read as follows:
ARTICLE 2. INSURANCE COMMISSIONER.
§33-2-3a. Administrative investigations.
(a) In addition to the authority granted to the fraud unit
created in article forty-one of this chapter and to the workers'
compensation fraud and abuse unit previously transferred to the
commissioner pursuant to section one-b, article one, chapter
twenty-three of this code, the commissioner has the authority to
conduct investigations whenever he or she has cause to believe that
a violation of any provision of this chapter or of chapter
twenty-three of this code has been or is being committed.
(b) Employees designated by the commissioner shall be
permitted to operate vehicles owned or leased by the state
displaying Class A registration plates when engaged in carrying out
the investigative duties assigned to the commissioner by this
chapter.
§33-2-7. Immunity of witness.
If any person shall ask to be excused from attending and
testifying or from producing any books, papers, records,
correspondence or other documents at any hearing conducted pursuant
to this chapter
or chapter twenty-three of this code or in any
cause or proceeding instituted by the commissioner pursuant to this
chapter
or chapter twenty-three of this code on the ground that the
testimony or evidence required of him may tend to incriminate him or subject him to a
criminal penalty or forfeiture, and shall
notwithstanding be directed by the commissioner to give such
testimony or produce such evidence, he must nonetheless comply with
such direction, but he shall not thereafter be prosecuted or
subjected to any
criminal penalty or forfeiture for or on account
of any matter or thing concerning which he may testify or produce
evidence, pursuant thereto, and no testimony so given or evidence
produced shall be received against him upon any criminal action,
investigation or proceeding:
Provided, however, That no such
individual so testifying shall be exempt from prosecution or
punishment for any perjury or false swearing, committed by him
while so testifying and the testimony or evidence so given or
produced shall be admissible against him upon any criminal action,
investigation or proceeding concerning such perjury or false
swearing, nor shall he be exempt from the refusal, revocation or
suspension of any license, permission or authority conferred, or to
be conferred, pursuant to this chapter. Any such individual may
execute, acknowledge and file in the office of the commissioner a
statement expressly waiving such immunity or privilege in respect
to any transaction, matter or thing specified in such statement and
thereupon the testimony of such person or such evidence in relation
to such transaction, matter or thing may be received or produced
before any judge or justice, court, tribunal, grand jury or
otherwise, and if so received or produced such individual shall not be entitled to any immunity or privilege on account of any
testimony he may so give or evidence so produced.
§33-2-19. Confidentiality of information.
In order to assist the commissioner in the regulation of
insurers in this state, it is the duty of the commissioner to
maintain, as confidential, and to take all reasonable steps to
oppose any effort to secure disclosure of, any documents or
information received from the National Association of Insurance
Commissioners, federal banking agencies or insurance departments of
other states which is confidential in such other jurisdictions. It
is within the power of the commissioner to share information,
including otherwise confidential information, with the National
Association of Insurance Commissioners, the Board of Governors of
the Federal Reserve System or other appropriate federal banking
agency or insurance departments of other states: Provided, That
such other jurisdictions agree to maintain the same level of
confidentiality as is available under this statute and to take all
reasonable steps to oppose any effort to secure disclosure of the
information. "Federal banking agency" means the Comptroller of the
Currency, the Director of the Office of Thrift Supervision, the
Board of Governors of the Federal Reserve System or the Federal
Deposit Insurance Corporation as set forth in section three of the
Federal Deposit Insurance Act.
(a) Documents, materials or other information in the possession or control of the commissioner that are obtained in an
investigation of any suspected violation of any provision of this
chapter or of chapter twenty-three of this code shall be
confidential by law and privileged, shall not be subject to the
provisions of chapter twenty-nine-b of this code, shall not be open
to public inspection, 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 a part of the commissioner's official
duties. The commissioner may use the documents, materials or other
information if they are required for evidence in criminal
proceedings or other action by the state or federal government and
in such context may be discoverable as ordered by a court of
competent jurisdiction exercising its discretion.
(b) Neither the commissioner nor any person who receives
documents, materials or other information while acting under the
authority of the commissioner may be permitted or required to
testify in any private civil action concerning any confidential
documents, materials or information subject to subsection (a) of
this section except as ordered by a court of competent
jurisdiction.
(c) In order to assist in the performance of the
commissioner's duties, the commissioner may:
(1) Share documents, materials, communications or information,
including otherwise confidential and privileged documents,
materials or information, with other state, federal and
international regulatory agencies, with the National Association of
Insurance Commissioners and its affiliates and subsidiaries, and
with regulatory and law-enforcement officials of other foreign or
domestic jurisdictions: Provided, That the recipient agrees to
maintain the confidentiality and privileged status of the document,
material, communication or other information;
(2) 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) Enter into agreements governing sharing and use of
information consistent with this subsection.
NOTE: The purpose of this bill is to clarify that the
Insurance Commissioner has the authority to undertake
investigations of noncriminal violations of the insurance code and
that such investigators have the same authority and duties as fraud investigators regarding the confidentiality of information received
in the course of such investigations.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§33-2-3a is new; therefore, underscoring and strike-throughs
have been omitted.
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