(1) Examination reports must
comprise only facts appearing upon the books, records, or other documents of the
company, its agents, or other persons examined, or as ascertained from the
testimony of its officers or agents or other persons examined concerning its affairs,
and the conclusions and recommendations as the examiners find reasonably
warranted based upon the facts.
(2) No later than sixty days after completion of the examination, the
examiner in charge shall file with the division a verified written report of
examination under oath. Upon receipt of the verified report, the division shall
transmit to the company examined both the report and a notice stating that the
company examined shall be afforded a reasonable period not exceeding thirty days,
within which to make a written submission or rebuttal with respect to any matters
contained in the examination report.
(3) Within thirty days after the end of the period allowed for the receipt of
written submissions or rebuttals, the commissioner shall fully consider and review
the report, any written submissions or rebuttals, and any relevant portions of the
examiner's work papers and shall enter an order that does one or more of the
following:
(a) Adopts the examination report as filed or with specified modifications or
corrections; and if the examination report reveals that the company is operating in
violation of any law, rule, or prior lawful order of the commissioner, the
commissioner may order the company to take any action the commissioner
considers necessary and appropriate to cure such violation; or
(b) Rejects the examination report and directs the examiners to reopen the
examination for purposes of obtaining additional data, documentation, or
information and to refile the report pursuant to subsection (1) of this section; or
(c) Calls for an investigatory hearing, upon no less than twenty days' notice
to the company, for purposes of obtaining additional documentation, data,
information, and testimony; or
(d) May impose a monetary penalty of not more than three thousand dollars
for every act in violation of any law, rule, or prior lawful order of the commissioner
described in the report of examination, but not to exceed an aggregate penalty of
thirty thousand dollars unless the company knew or reasonably should have known
that its conduct was in violation of any law, rule, or prior lawful order of the
commissioner, in which case the penalty shall not be more than thirty thousand
dollars for every act or violation, but not to exceed an aggregate penalty of seven
hundred fifty thousand dollars annually.
(4) (a) All orders entered pursuant to subsection (3)(a) of this section must
be accompanied by findings and conclusions resulting from the commissioner's
consideration and review of the examination report, relevant examiner work papers,
and any written submissions or rebuttals. The order is a final agency decision and
must be served upon the company by certified mail together with a copy of the
adopted examination report. Notwithstanding the requirements of section 10-1-127,
the final agency decision is subject to judicial review by the district court pursuant
to section 24-4-106.Within thirty days after issuance of the adopted report, the
company shall file affidavits executed by each of its directors stating under oath
that the directors have received a copy of the adopted report and related orders.
(b) Any hearing conducted under paragraph (c) of subsection (3) of this
section by the commissioner or an authorized representative shall be conducted as
a nonadversarial, confidential, investigatory proceeding as necessary for the
resolution of any inconsistencies, discrepancies, or disputed issues apparent upon
the face of the filed examination report or raised by or as a result of the
commissioner's review of relevant work papers or by the written submission or
rebuttal of the company. Such hearing shall not be subject to the State
Administrative Procedure Act, article 4 of title 24, C.R.S. Within twenty days after
the conclusion of any such hearing, the commissioner shall enter an order pursuant
to paragraph (a) of subsection (3) of this section.
(c) The commissioner shall not appoint an examiner as an authorized
representative to conduct the hearing. The hearing shall proceed expeditiously with
discovery by the company limited to the examiner's work papers that tend to
substantiate any assertions set forth in any written submission or rebuttal. The
commissioner or representative may issue subpoenas for the attendance of any
witnesses or the production of any documents deemed relevant to the
investigation, whether under the control of the division, the company, or other
persons. The documents produced shall be included in the record. Testimony taken
by the commissioner or representative shall be under oath and preserved for the
record.
(d) The hearing shall proceed with the commissioner or representative
posing questions to the persons subpoenaed. Thereafter, the company and the
division may present testimony relevant to the investigation. The company and the
division shall be permitted to make closing statements and may be represented by
counsel of their choice.
(e) Any order issued by the commissioner pursuant to subsection (3)(d) of
this section may be appealed to the district court.
(5) Upon the adoption of the examination report pursuant to paragraph (a) of
subsection (3) of this section, the commissioner shall continue, for at least thirty
days, to hold the content of the examination report as private and confidential
information except to the extent provided in subsection (2) of this section.
Thereafter, the commissioner may open the report for public inspection unless a
court of competent jurisdiction has stayed its publication.
(6) No provision of this title shall prevent or be construed as prohibiting the
commissioner from disclosing the content of an examination report, preliminary
examination report or results, or any matter relating thereto to the insurance
division of this or any other state or country, or to law enforcement officials of this
or any other state, or to any agency of the federal government at any time subject
to the written agreement of the recipient to hold such information confidential and
to treat it in a manner consistent with this part 2.
(7) In the event the commissioner determines that regulatory action is
appropriate as a result of any examination, the commissioner may initiate any
proceedings or actions as provided by law.
(8) Confidentiality of ancillary information. (a) All working papers, recorded
information, documents, and copies thereof that are produced or obtained by or
disclosed to the commissioner or any other person in the course of an examination
made under this part 2 or in the course of analysis of the financial condition of the
company by the commissioner are confidential, are not subject to subpoena, and
may not be made public by the commissioner or any other person except to the
extent provided in subsection (5) of this section; except that the commissioner may
grant the NAIC access to the materials. Disclosure of the materials may be made
only upon the prior written agreement of the recipient to hold the information
confidential as required by this section or upon the prior written consent of the
company to which it pertains.
(b) Neither the commissioner nor any person who received the documents,
materials, or other information while acting under the authority of the
commissioner, including the NAIC and its affiliates and subsidiaries, may testify in
any private civil action concerning any confidential documents, materials, or
information subject to subsection (8)(a) of this section.