State Codes and Statutes
Statutes > Connecticut > Title38a > Chap700b > Sec38a-465eSec. 38a-465e. Examination of licensees and applicants. Commissioner's access to records. Retention of records. Expenses of examination. Confidentiality of examination workpapers and reports. (a) When the commissioner deems it reasonably necessary to protect the interests of the public, the commissioner may examine the business and affairs of any licensee or applicant for a license. The commissioner may order any licensee or applicant to produce any records, books, files or other information reasonably necessary to ascertain whether such license or applicant is acting or acted in violation of the law or is otherwise contrary to the interests of the public. The licensee or applicant shall pay all expenses incurred by the commissioner in conducting any examination.
(b) Providers shall maintain records of each consummated transaction and life settlement contracts and, subject to the provisions of section 38a-465d, such records shall be available, during reasonable business hours, to the commissioner for inspection for the three-year period following the insured's death.
(c) In lieu of an examination under this part of any foreign or alien licensee licensed in this state, the commissioner may accept an examination report on the licensee as prepared by the commissioner for the licensee's state of domicile or port-of-entry state.
(d) Names and individual identification data of owners and insureds shall be considered private and confidential information and shall not be disclosed by the commissioner unless required by law.
(e) (1) Upon determining that an examination should be conducted, the commissioner shall issue an examination warrant appointing one or more examiners to perform said examination and instructing them as to its scope. In conducting the examination, the examiner shall use methods common to the examination of any life settlement licensee and shall use guidelines and procedures set forth in an examiners' handbook adopted by a national organization.
(2) Each licensee or person from whom information is sought, its officers, directors and agents shall provide to the examiners timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, assets and computer or other recordings relating to the property, assets, business and affairs of the licensee being examined. The officers, directors, employees and agents of the licensee or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal by a licensee or its officers, directors, employees or agents to submit to an examination or to comply with any reasonable written request of the commissioner shall be grounds for suspension, refusal or nonrenewal of any license or authority held by the licensee to engage in the life settlement business or other business subject to the commissioner's jurisdiction. Any proceedings for suspension, revocation or refusal of any license or authority shall be conducted pursuant to sections 38a-17 to 38a-19, inclusive.
(3) The commissioner shall have the power to issue subpoenas, administer oaths and examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of a 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.
(4) When making an examination under this part, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the reasonable cost of which shall be borne by the licensee that is the subject of the examination.
(5) Nothing contained in this section shall be construed to limit the commissioner's authority to terminate or suspend an 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.
(6) All final or preliminary examination reports, examiner or licensee work papers or other documents, or any other information discovered or developed during the course of an examination shall be kept confidential, pursuant to section 38a-69a.
(f) (1) Examination reports shall be comprised of only facts appearing upon the books, from the testimony of the licensee, its officers or agents or other persons examined concerning its affairs, and such conclusions and recommendations as the examiners find reasonably warranted from the facts.
(2) Not later than sixty days following completion of the examination, the examiner in charge shall file with the commissioner a verified written report of examination under oath. Upon receipt of the verified report, the commissioner shall transmit the report to the licensee examined, together with a notice that shall afford the licensee examined a reasonable opportunity of not more than thirty days to make a written submission or rebuttal with respect to any matters contained in the examination report and which shall become part of the report, or to request a hearing on any matter in dispute.
(3) In the event the commissioner determines that regulatory action is appropriate as a result of an examination, the commissioner may initiate any proceedings or actions provided by law.
(g) Except as otherwise provided in this section, all examination reports, working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this section, or in the course of analysis or investigation by the commissioner of the financial condition or market conduct of a licensee, shall be confidential by law and privileged and shall not be subject to section 1-210, subject to subpoena, or subject to discovery or be 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. The licensee being examined shall have access to all documents used to make the report.
(h) (1) An examiner shall not be appointed by the commissioner if the examiner, directly or indirectly, has a conflict of interest, is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this section. This section shall not be construed to automatically preclude an examiner from being (A) an owner, (B) an insured in a life settlement contract or insurance policy, or (C) a beneficiary in an insurance policy that is proposed for a life settlement contract.
(2) Notwithstanding the requirements of this subsection, the commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants or other similar individuals who are independently practicing their professions, even though these persons may from time to time be similarly employed or retained by persons subject to examination under this section.
(i) (1) No cause of action shall arise or any liability be imposed against the commissioner, the commissioner's authorized representatives or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this section.
(2) No cause of action shall arise or any liability be imposed against any person for communicating or delivering information or data to the commissioner or the commissioner's authorized representative or examiner pursuant to an examination made under this section, if such communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. This subdivision shall not abrogate or modify any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (1) of this subsection.
(3) A person identified in subdivision (1) or (2) of this subsection shall be entitled to an award of attorney's fees and costs if such person 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 section and the party bringing the action was not substantially justified in doing so. For the purpose of this section, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated.
(j) The commissioner may investigate suspected fraudulent life settlement acts, as specified in section 38a-465j, and persons engaged in the business of life settlements.
(P.A. 97-202, S. 7, 18; P.A. 99-104, S. 5; 99-145, S. 8, 23; P.A. 08-175, S. 6.)
History: P.A. 97-202 effective January 1, 1998; P.A. 99-104 amended Subsec. (a) to substitute "When the commissioner deems it reasonably necessary to protect the interests of the public" for "In response to a complaint concerning a license or in connection with the review of an application for a license ..." re the commissioner's examination authority, amended Subsec. (b) to substitute "five-year period" for "three-year period" re inspection period following the insured's death, and deleted reference to "subsection (a) of section 38a-11" and "subdivision (19) of section 38a-816"; P.A. 99-145 deleted reference to "subsection (a) of section 38a-11" and "subdivision (19) of section 38a-816", effective June 8, 1999; P.A. 08-175 deleted provision re viatical settlement, amended Subsecs. (a) and (b) by making conforming and technical changes and reducing maintenance period for records from 5 years to 3 years, and added Subsecs. (c) to (j) re examinations and confidentiality requirements (Revisor's note: In 2009, a reference to "licensee of applicant" in Subsec. (a) was changed editorially by the Revisors to "licensee or applicant" for accuracy and consistency).
