1.The commissioner, when the commissioner deems it reasonably necessary to protect
the interests of the public, may examine the business and affairs of any licensee or
applicant for a license. The commissioner may order any licensee or applicant to
produce any records, books, files, or other information reasonably necessary to
ascertain whether such licensee or applicant is acting or has acted in violation of the
law or otherwise contrary to the interests of the public. The expenses incurred in
conducting any examination must be paid by the licensee or applicant.
2.In lieu of an examination under this chapter of any foreign or alien licensee licensed in
this state, the commissioner may, at the commissioner's discretion, accept an
examination report on the licensee as prepared by the com
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1. The commissioner, when the commissioner deems it reasonably necessary to protect
the interests of the public, may examine the business and affairs of any licensee or
applicant for a license. The commissioner may order any licensee or applicant to
produce any records, books, files, or other information reasonably necessary to
ascertain whether such licensee or applicant is acting or has acted in violation of the
law or otherwise contrary to the interests of the public. The expenses incurred in
conducting any examination must be paid by the licensee or applicant.
2. In lieu of an examination under this chapter of any foreign or alien licensee licensed in
this state, the commissioner may, at the commissioner's discretion, accept an
examination report on the licensee as prepared by the commissioner for the licensee's
state of domicile or port-of-entry state.
3. Names of and individual identification data for all owners and insureds must be
considered private and confidential information and may not be disclosed by the
commissioner unless required by law.
4. Records of all consummated transactions and life settlement contracts must be
maintained by the provider for three years after the death of the insured and must be
available to the commissioner for inspection during reasonable business hours.
5. a. Upon determining that an examination should be conducted, the commissioner
shall issue an examination warrant appointing one or more examiners to perform
the examination and instructing the examiners as to the scope of the
examination. In conducting the examination, the examiner shall use methods
common to the examination of any life settlement licensee and should use those
guidelines and procedures set forth in an examiners' handbook adopted by a
national organization.
b. Every licensee or person from whom information is sought, its officers, directors,
and agents shall provide to the examiners timely, convenient, and free access at
all reasonable hours at its offices to all books, records, accounts, papers,
documents, assets, and computer or other recordings relating to the property,
assets, business, and affairs of the licensee being examined. The officers,
directors, employees, and agents of the licensee or person shall facilitate the
examination and aid in the examination so far as it is in their power to do so. The
refusal of a licensee, by its officers, directors, employees, or agents, to submit to
examination or to comply with any reasonable written request of the
commissioner is grounds for suspension or refusal of, or nonrenewal of any
license or authority held by the licensee to engage in the life settlement business
or other business subject to the commissioner's jurisdiction. Any proceedings for
suspension, revocation, or refusal of any license or authority must be conducted
pursuant to section 26.1-01-03.1.
c. The commissioner may issue subpoenas, administer oaths, and examine under
oath any person as to any matter pertinent to the examination. Upon the failure or
refusal of a person to obey a subpoena, the commissioner may petition a court of
competent jurisdiction, and upon proper showing, the court may enter an order
compelling the witness to appear and testify or produce documentary evidence.
d. When making an examination under this chapter, the commissioner may retain
attorneys, appraisers, independent actuaries, independent certified public
accountants, or other professionals and specialists as examiners, the reasonable
cost of which must be borne by the licensee that is the subject of the
examination.
e. This chapter does not limit the commissioner's authority to terminate or suspend
an examination in order to pursue other legal or regulatory action pursuant to the
insurance laws of this state. Findings of fact and conclusions made pursuant to
any examination are prima facie evidence in any legal or regulatory action.
f. This chapter does not limit the commissioner's authority to use and, if
appropriate, to make public any final or preliminary examination report, any
examiner or licensee workpapers, or other documents, or any other information
discovered or developed during the course of any examination in the furtherance
of any legal or regulatory action which the commissioner determines appropriate.
6. a. Examination reports must be composed of only facts appearing upon the books,
from the testimony of its officers or agents, or other persons examined
concerning its affairs, and such conclusions and recommendations as the
examiners find reasonably warranted from the facts.
b. No later than sixty days following completion of the examination, the examiner in
charge shall file with the commissioner a verified written report of examination
under oath. Upon receipt of the verified report, the commissioner shall transmit
the report to the licensee examined, together with a notice that shall afford the
licensee examined a reasonable opportunity of not more than thirty days to make
a written submission or rebuttal with respect to any matters contained in the
examination report and which shall become part of the report or to request a
hearing on any matter in dispute.
c. If the commissioner determines that regulatory action is appropriate as a result of
an examination, the commissioner may initiate any proceedings or actions
provided by law.
7. a. Names and individual identification data for all owners, purchasers, and insureds
must be considered private and confidential information and may not be disclosed
by the commissioner, unless the disclosure is to another regulator, is required
under law, or is allowed under section 26.1-03-19.4.
b. Except as otherwise provided in this chapter, all examination reports, working
papers, recorded information, documents, and copies thereof produced by,
obtained by, or disclosed to the commissioner or any other person in the course
of an examination made under this chapter, or in the course of analysis or
investigation by the commissioner of the financial condition or market conduct of
a licensee must be confidential by law and privileged, is not subject to the state's
open records laws, is not subject to subpoena, and is not subject to discovery or
admissible in evidence in any private civil action. The commissioner may use the
documents, materials, or other information in the furtherance of any regulatory or
legal action brought as part of the commissioner's official duties. The licensee
being examined may have access to all documents used to make the report.
8. a. An examiner may not be appointed by the commissioner if the examiner, either
directly or indirectly, has a conflict of interest or is affiliated with the management
of or owns a pecuniary interest in any person subject to examination under this
chapter. This section may not be construed to automatically preclude an
examiner from being:
(1) An owner;
(2) An insured in a life settlement contract or insurance policy; or
(3) A beneficiary in an insurance policy that is proposed for a life settlement
contract.
b. Notwithstanding the requirements of this subsection, the commissioner may
retain from time to time, on an individual basis, qualified actuaries, certified public
accountants, or other similar individuals who are independently practicing their
professions, even though these persons may from time to time be similarly
employed or retained by persons subject to examination under this chapter.
9. a. No cause of action arises nor may any liability be imposed against the
commissioner, the commissioner's authorized representatives, or any examiner
appointed by the commissioner for any statements made or conduct performed in
good faith while carrying out this chapter.
b. No cause of action arises, nor may any liability be imposed against any person
for the act of communicating or delivering information or data to the commissioner
or the commissioner's authorized representative or examiner pursuant to an
examination made under this chapter, if the act of communication or delivery was
performed in good faith and without fraudulent intent or the intent to deceive. This
subdivision does not abrogate or modify in any way any common-law or statutory
privilege or immunity heretofore enjoyed by any person identified in subdivision a.
c. A person identified in subdivision a or b is entitled to an award of attorney's fees
and costs if the person is the prevailing party in a civil cause of action for libel,
slander, or any other relevant tort arising out of activities in carrying out the
provisions of this chapter and the party bringing the action was not substantially
justified in doing so. For purposes of this section, a proceeding is "substantially
justified" if it had a reasonable basis in law or fact at the time that it was initiated.
10. The commissioner may investigate suspected fraudulent life settlement acts and
persons engaged in the business of life settlements.
11. The commissioner may charge for examinations as provided for under section
26.1-01-07.