1-1     By:  Sibley                                           S.B. No. 1658
 1-2           (In the Senate - Filed March 9, 2001; March 14, 2001, read
 1-3     first time and referred to Committee on Business and Commerce;
 1-4     April 17, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 5, Nays 0; April 17, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1658                  By:  Sibley
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to production of documents in response to an investigation
1-11     by the Texas Department of Insurance.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Subchapter A, Chapter 38, Insurance Code, is
1-14     amended by adding Section 38.003 to read as follows:
1-15           Sec. 38.003.  REQUEST FOR DOCUMENTS UNDER DEPARTMENT
1-16     INVESTIGATION.  (a)  In this section, "authorization" means a
1-17     permit, certificate of registration, or other authorization issued
1-18     or existing under this code.
1-19           (b)  The department may request relevant documents from an
1-20     insurance company, agent, or holder of an authorization as part of
1-21     an investigation relating to:
1-22                 (1)  the insurer's business activities; or
1-23                 (2)  any matter connected with the insurer's
1-24     transactions as the department considers necessary for the public
1-25     good or for the proper discharge of the department's duties.
1-26           (c)  A person who receives a request from the department
1-27     under Subsection (b) shall respond to the request with the
1-28     production of requested documents not later than the 10th business
1-29     day after the date the request is received unless additional time
1-30     is requested and approved by the department.  The department shall
1-31     grant a reasonable extension if the documentary evidence requested
1-32     is voluminous or other extenuating circumstances warrant such an
1-33     extension.
1-34           (d)  Documentary material produced pursuant to a request
1-35     under this section, unless otherwise ordered by a court for good
1-36     cause shown, may not be produced for inspection or copying by, or
1-37     disclosed to, any person other than an authorized employee of the
1-38     department without the consent of the person who produced the
1-39     material.  The department shall prescribe reasonable terms and
1-40     conditions under which the documentary material is made available
1-41     for inspection and copying by the person who produced the material
1-42     or any authorized representative of that person.
1-43           (e)  The department may use the documentary material or
1-44     copies of the material as the department considers necessary in the
1-45     discharge of the department's duties, including for presentation
1-46     before any court.  Material that contains trade secrets may not be
1-47     presented except with the approval of the court in which the action
1-48     is pending after adequate notice to the person furnishing the
1-49     material.
1-50           SECTION 2.  This Act takes effect September 1, 2001, and
1-51     applies only to requests by the Texas Department of Insurance in
1-52     connection with an investigation that are made to an insurer or
1-53     other applicable person on or after that date.  A request made
1-54     before that date is governed by the law in effect on the date the
1-55     request was made, and the former law is continued in effect for
1-56     that purpose.
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