By:  Sibley                                           S.B. No. 1658
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to production of documents in response to an investigation
 1-3     by the Texas Department of Insurance.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter A, Chapter 38, Insurance Code, is
 1-6     amended by adding Section 38.003 to read as follows:
 1-7           Sec. 38.003.  REQUEST FOR DOCUMENTS UNDER DEPARTMENT
 1-8     INVESTIGATION.  (a)  In this section, "authorization" means a
 1-9     permit, certificate of registration, or other authorization issued
1-10     or existing under this code.
1-11           (b)  The department may request relevant documents from an
1-12     insurance company, agent, or holder of an authorization as part of
1-13     an investigation relating to:
1-14                 (1)  the insurer's business activities; or
1-15                 (2)  any matter connected with the insurer's
1-16     transactions as the department considers necessary for the public
1-17     good or for the proper discharge of the department's duties.
1-18           (c)  A person who receives a request from the department
1-19     under Subsection (b) shall respond to the request with the
1-20     production of requested documents not later than the 10th business
1-21     day after the date the request is received unless additional time
1-22     is requested and approved by the department.  The department shall
1-23     grant a reasonable extension if the documentary evidence requested
1-24     is voluminous or other extenuating circumstances warrant such an
1-25     extension.
 2-1           (d)  Documentary material produced pursuant to a request
 2-2     under this section, unless otherwise ordered by a court for good
 2-3     cause shown, may not be produced for inspection or copying by, or
 2-4     disclosed to, any person other than an authorized employee of the
 2-5     department without the consent of the person who produced the
 2-6     material.  The department shall prescribe reasonable terms and
 2-7     conditions under which the documentary material is made available
 2-8     for inspection and copying by the person who produced the material
 2-9     or any authorized representative of that person.
2-10           (e)  The department may use the documentary material or
2-11     copies of the material as the department considers necessary in the
2-12     discharge of the department's duties, including for presentation
2-13     before any court.  Material that contains trade secrets may not be
2-14     presented except with the approval of the court in which the action
2-15     is pending after adequate notice to the person furnishing the
2-16     material.
2-17           SECTION 2.  This Act takes effect September 1, 2001, and
2-18     applies only to requests by the Texas Department of Insurance in
2-19     connection with an investigation that are made to an insurer or
2-20     other applicable person on or after that date.  A request made
2-21     before that date is governed by the law in effect on the date the
2-22     request was made, and the former law is continued in effect for
2-23     that purpose.