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. 1-57 * * * * *