HBA-DMH S.B. 1658 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1658 By: Sibley Insurance 5/7/2001 Engrossed BACKGROUND AND PURPOSE Under current law, a gap exists between the formal inquiry process and the formal subpoena process utilized by the Texas Department of Insurance (department) to obtain information from certain insurers. In situations concerning consumer complaints, the department may benefit from a process that allows it to review insurance-related claim files or company procedures. The department has no express authority to request documents pursuant to an investigation. Senate Bill 1658 authorizes the department to request relevant documents as part of an investigation from an insurance company, agent, or holder of an authorization. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 1658 amends the Insurance Code to authorize the Texas Department of Insurance (department) to request relevant documents as part of an investigation from an insurance company, agent, or holder of an authorization relating to: _the insurer's business activities; or _any matter connected with the insurer's transactions that the department considers necessary for the public good or for the proper discharge of the department's duties. The bill provides requirements for responding to a request for documentary evidence. The bill prohibits any documentary material produced pursuant to a request, unless otherwise ordered by a court for good cause shown, from being produced for inspection or copying by, or its contents from being disclosed to any person other than the authorized employee of the department without the consent of the person who produced the material. The bill requires the department to prescribe reasonable terms and conditions under which the documentary material is made available for inspection and copying by the person who produced the material or any authorized representative of that person. The bill authorizes the department to use the documentary material or copies as it considers necessary in the discharge of the department's duties, including for presentation before any court. The bill prohibits any material which contains trade secrets from being presented except with the approval of the court in which the action is pending after adequate notice to the person furnishing the material. EFFECTIVE DATE September 1, 2001.