A bill providing confidentiality protection for insurers that conduct voluntary self-assessments recently passed the Michigan Senate and was referred to the House Committee on Insurance and Financial Services. SB 674, dubbed the self-audit bill, made it through the Senate on a vote of 22-12.
“This measure is a positive approach and encourages insurers to take the necessary steps to stay in compliance with state statutes and regulations, promotes openness with regulators, and provides protection against lawsuit abuse. Now that the bill has advanced through one house we believe it stands a good chance of being enacted,” commented Laura Kotelman, counsel for the National Association of Independent Insurers (NAII).
The bill provides confidentiality protection to documents created as part of the insurance compliance audit. These documents submitted to the Commissioner of the Office of Financial and Insurance Services could not be admitted as evidence in a civil, criminal or administrative proceeding.
The Insurance Department moved from opposing the bill to a neutral position when the Senate agreed to shorten some procedural timelines. The Senate amended the length of time that an insurer has to challenge a Department request for disclosure of a document created as part of a self-audit as the insurer would have 14 rather than 30 days to request an “in camera” or confidential review of audit documents by the court.
The timeframe for the court to schedule the review was shortened from 45 to 30 days.
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