Senate Bill sb2082c1

    Florida Senate - 2001                           CS for SB 2082

    By the Committee on Banking and Insurance; and Senator Carlton





    311-1696-01

  1                      A bill to be entitled

  2         An act relating to public records and meetings;

  3         creating s. 641.264, F.S.; providing exemptions

  4         from public records requirements and public

  5         meetings requirements for health maintenance

  6         organizations for certain risk-based capital

  7         reports, orders, instructions, and plans and

  8         related documents, materials, providing for

  9         termination of exemptions; and information;

10         providing for future review and repeal;

11         providing a finding of public necessity;

12         providing an effective date.

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14  Be It Enacted by the Legislature of the State of Florida:

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16         Section 1.  Section 641.264, Florida Statutes, is

17  created to read:

18         641.264  Confidentiality of risk-based capital

19  proceedings and records.--

20         (1)  For the purposes of this section, the definitions

21  of terms provided in s. 641.263 apply.

22         (2)  All documents, materials, or other information

23  specifically related to risk-based capital reports, to the

24  extent that the information is not required to be set forth in

25  a publicly available annual statement schedule, and documents,

26  materials, or other information related to risk-based capital

27  plans, including the results or report of any examination or

28  analysis of a health maintenance organization performed

29  pursuant to s. 641.263 and any corrective order issued by the

30  department pursuant to such examination or analysis, with

31  respect to a health maintenance organization that are in the

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    Florida Senate - 2001                           CS for SB 2082
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  1  possession or control of the department shall be confidential

  2  by law and privileged, shall be exempt from the provisions of

  3  s. 119.07(1) and s. 24(a), Art. I of the State Constitution,

  4  shall not be subject to subpoena, and shall not be subject to

  5  discovery or admissible in evidence in any private civil

  6  action. However, the department is authorized to use a

  7  risk-based capital report, plan, or related documents,

  8  materials, or other information in the furtherance of any

  9  regulatory or legal action brought as a part of the

10  department's official duties.  Proceedings and hearings

11  conducted pursuant to s. 641.263 relating to the department's

12  actions regarding any health maintenance organization's

13  risk-based capital plan, revised risk-based capital plan,

14  risk-based capital report or adjusted risk-based capital

15  report are exempt from the provisions of s. 286.011 and s.

16  24(b), Art. I of the State Constitution, except as otherwise

17  provided in this section.

18         (3)  The exemptions provided by this section expire:

19         (a)  One year following the conclusion of any

20  risk-based capital plan or revised risk-based capital plan; or

21         (b)  On the date of entry of any order of seizure,

22  rehabilitation, or liquidation pursuant to chapter 631.

23         (4)  Neither the department nor any person who received

24  a confidential risk-based capital report, plan, or related

25  documents, materials, or other information while acting under

26  the authority of the department shall be permitted or required

27  to testify in any private civil action concerning such report,

28  plan, or related documents, materials, or information, subject

29  to the exceptions contained in subsections (2) and (5).

30         (5)  In order to assist in the performance of its

31  duties, the department may:

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    Florida Senate - 2001                           CS for SB 2082
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  1         (a)  Share a confidential or privileged risk-based

  2  capital report, plan, or related documents, materials, or

  3  other information with other state, federal, and international

  4  regulatory agencies, with the National Association of

  5  Insurance Commissioners and its affiliates and subsidiaries,

  6  and with state, federal, and international law enforcement

  7  authorities, provided that the recipient agrees to maintain

  8  the confidentiality of the document, material, or other

  9  information.

10         (b)  Receive confidential risk-based capital reports,

11  plans, and related documents, materials, or information from

12  the National Association of Insurance Commissioners and its

13  affiliates and subsidiaries, and from regulatory and law

14  enforcement officials of other foreign or domestic

15  jurisdictions, and shall maintain as confidential or

16  privileged any such report, plan, or related document,

17  material, or information received with notice or the

18  understanding that it is confidential or privileged under the

19  laws of the jurisdiction that is the source of the document,

20  material, or information.

21         (c)  Enter into agreements governing sharing and use of

22  information consistent with this subsection.

23         (6)  No waiver of any applicable privilege or claim of

24  confidentiality in the documents, materials, or information

25  shall occur as a result of disclosure to the department under

26  this section or as a result of sharing as authorized in

27  paragraph (4)(c).

28         (7)  It is the judgment of the Legislature that the

29  comparison of a health maintenance organization's total

30  adjusted capital to any of its risk-based capital levels is a

31  regulatory tool which may indicate the need for corrective

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    Florida Senate - 2001                           CS for SB 2082
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  1  action with respect to the health maintenance organization and

  2  is not intended as a means to rank health maintenance

  3  organizations generally. Therefore, except as otherwise

  4  required under the provisions of this section, the making,

  5  publishing, disseminating, circulating, or placing before the

  6  public, or causing, directly or indirectly, to be made,

  7  published, disseminated, circulated, or placed before the

  8  public in a newspaper, magazine, or other publication, in the

  9  form of a notice, circular, pamphlet, letter, or poster, or

10  over a radio or television station, or in any other way, an

11  advertisement, announcement, or statement containing an

12  assertion, representation, or statement with regard to the

13  risk-based capital levels of any health maintenance

14  organization, or of any component derived in the calculation,

15  by any health maintenance organization, agent, broker, or

16  other person engaged in any manner in the health maintenance

17  organization insurance business would be misleading and is

18  therefore prohibited; provided, if any materially false

19  statement with respect to the comparison regarding a health

20  maintenance organization's total adjusted capital to any of

21  its risk-based capital levels, or an inappropriate comparison

22  of any other amount to the health maintenance organization's

23  risk-based capital levels, is published in any written

24  publication and the health maintenance organization is able to

25  demonstrate to the department with substantial proof the

26  inappropriateness or falsity of the statement, the health

27  maintenance organization may publish an announcement in a

28  written publication if the sole purpose of the announcement is

29  to rebut the materially false statement.

30         (8)  This section is subject to the Open Government

31  Sunset Review Act of 1995 in accordance with s. 119.15, and

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    Florida Senate - 2001                           CS for SB 2082
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  1  shall stand repealed on October 2, 2006, unless reviewed and

  2  saved from repeal through reenactment by the Legislature.

  3         Section 2.  The Legislature finds that the public

  4  records and meetings exemptions provided for in section

  5  641.264, Florida Statutes, are a public necessity because

  6  unrestricted public access to information, proceedings, and

  7  hearings relating to a health maintenance organization's

  8  risk-based capital plan and risk-based capital adjusted

  9  report, and documents and examination reports related thereto,

10  might damage the health maintenance organization if made

11  available to its competitors and could substantially affect

12  the solvency of a health maintenance organization. Damage to a

13  health maintenance organization's solvency could have a

14  substantial negative effect on the public as well as on other

15  health maintenance organizations. Furthermore, public access

16  to such information would not serve a public interest in that

17  such information can be misleading as to a health maintenance

18  organization's ranking because risk-based data does not

19  reflect all of the factors involved in the assessment of a

20  health maintenance organization's financial strength. The

21  Legislature also finds that risk-based capital reports and

22  plans reveal a health maintenance organization's investment

23  decisions and that such decisions are a trade secret that give

24  the health maintenance organization a competitive advantage in

25  the private market. Public access to such information could

26  affect a health maintenance organization's ability to do

27  business in Florida and the health maintenance organization's

28  solvency. The Legislature finds that the risk-based capital

29  reports provide early warning signs that may necessitate

30  corrective action before serious financial problems arise and

31  that such activity is a public benefit. Providing

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    Florida Senate - 2001                           CS for SB 2082
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  1  confidentiality for such records and proceedings enables the

  2  health maintenance organization to reduce risk to members of

  3  the health maintenance organization and encourages the health

  4  maintenance organization to be more open and frank in the

  5  information so provided, without the attendant fear that

  6  honest and truthful exchange of information will result in the

  7  public dissemination of information that could be used to harm

  8  the health maintenance organization and its members.

  9  Therefore, it is a public necessity to maintain the

10  confidentiality of this information and these proceedings and

11  hearings within the regulatory body responsible for the

12  oversight of health maintenance organization solvency.

13  Finally, the Legislature finds that the public has access

14  through other means to information regarding the financial

15  strength of a health maintenance organization and its ranking

16  with regard to other health maintenance organizations.

17         Section 3.  This act shall take effect October 1, 2001,

18  if SB 2080 or similar legislation is adopted in the same

19  legislative session or an extension thereof and becomes law.

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    Florida Senate - 2001                           CS for SB 2082
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  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                             SB 2082

  3

  4  Specifies that all documents, materials, or other information
    specifically related to risk-based capital reports, to the
  5  extent the information is not required to be set forth in a
    publicly available annual statement schedule, and documents,
  6  material, or other information related to risk-based capital
    plans, including department reports and corrective orders, are
  7  confidential and privileged and not subject to subpoena,
    discovery or admissibility in any private civil action.
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    Provides that the public record exemptions provided by this
  9  section are to terminate 1 year following the conclusion of
    any risk-based capital plan or revised risk-based capital
10  plan, or on the date of entry of an order of seizure,
    rehabilitation, or liquidation pursuant to chapter 631, F.S.
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    Provides additional legislative findings in the statement of
12  public necessity for the exemptions to provide that providing
    confidentiality of the information would encourage the HMOs to
13  be more open and frank in the information provided.

14  Removes language providing legislative intent for the use of
    risk-based capital reports and related information.
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    Provides technical changes.
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