SDLRC - Codified Law 58-5A-41 - Confidentiality of information in possession or control of Division--Use in regulatory or legal action--Grounds for publication by director.

58-5A-41. Confidentiality of information in possession or control of Division--Use in regulatory or legal action--Grounds for publication by director.

Documents, materials, or other information including filings in the possession or control of the Division of Insurance that are obtained by or disclosed to the director or any other person in the course of an examination or investigation made pursuant to this chapter and all information reported pursuant to this chapter are recognized as being proprietary and to contain trade secrets, and are confidential by law and privileged, are not subject to open records, freedom of information, sunshine, or other related laws, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the director is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the director's official duties. The director may not otherwise make the documents, materials, or other information public without the prior written consent of the insurer to which it pertains unless the director, after giving the insurer and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interest of policyholders, shareholders, or the public will be served by the publication thereof, in which event the director may publish all or any part.

For purposes of the information reported and provided to the director pursuant to § 58-5A-94, the director shall maintain the confidentiality of the group capital calculation and group capital ratio produced within the calculation and any group capital information received from an insurance holding company supervised by the Federal Reserve Board or any U.S. group-wide supervisor.

For purposes of the information reported and provided to the director pursuant to § 58-5A-97, the director shall maintain the confidentiality of the liquidity stress test results and supporting disclosures and any liquidity stress test information received from an insurance holding company supervised by the Federal Reserve Board and non-U.S. group-wide supervisors.

Source: SL 1972, ch 267, § 35; SL 2015, ch 246, § 27; SL 2024, ch 201, § 3.

58-5A-41.1. Testimony in private civil action concerning confidential information prohibited.

Neither the director nor any person who receives documents, materials, or other information while acting under the authority of the director or with whom the documents, materials, or other information are shared pursuant to the provisions of § 58-5A-41 is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to the provisions of § 58-5A-41.

Source: SL 2015, ch 246, § 15.

58-5A-41.2. Certain sharing of confidential information permitted.

To assist in the performance of the duties assigned to the director pursuant to the provisions of this chapter:

(1) The director may, upon request, share documents, materials, or other information, including the confidential and privileged documents, materials, or information, including proprietary materials, trade secrets, documents, and materials disclosed pursuant to this chapter with a state, federal, and international regulatory agency, the NAIC, any third-party consultant designated by the director, and a state, federal, and international law enforcement authority, including a member of any supervisory college described in §§ 58-5A-78 to 58-5A-80, inclusive, if the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material, or other information, and verifies in writing the legal authority to maintain confidentiality;

(2) Notwithstanding the provisions of subdivision (1), the director may only share information reported pursuant to § 58-5A-29.1, with a director of a state that has laws substantially similar to the provisions of § 58-5A-41, and who agrees in writing not to disclose such information; and

(3) The director may receive documents, materials, or information, including otherwise confidential and privileged documents, materials, or information, including proprietary materials and trade secret information from the NAIC and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material, or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material, or information.

The sharing of information by the director pursuant to this chapter is not a delegation of regulatory authority or rule-making authority, and the director is solely responsible for the administration, execution, and enforcement of the provisions of this chapter.

Source: SL 2015, ch 246, § 16; SL 2024, ch 201, § 4.

58-5A-41.3. Agreements regarding sharing of confidential information.

The director must enter into written agreements with the NAIC and any third-party consultant designated by the director governing the sharing and use of information provided pursuant to this chapter that:

(1) Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant designated by the director pursuant to this chapter, including procedures and protocols for sharing by the NAIC with any other state, federal, or international regulator. The agreement must provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the documents, materials, or other information and has verified in writing the legal authority to maintain the confidentiality;

(2) Specify that ownership of information shared with the NAIC or a third-party consultant pursuant to this chapter remains with the director and that the NAIC or a third-party consultant, as designated by the director, use of the information is subject to the direction of the director;

(3) Prohibit the NAIC or a third-party consultant designated by the director from storing the information shared pursuant to this chapter in a permanent database after the underlying analysis is completed, except as for those materials reported pursuant to § 58-5A-94;

(4) Require prompt notice to be given to an insurer whose confidential information is in the possession of the NAIC or a third-party consultant designated by the director pursuant to this chapter and is subject to a request or subpoena issued to the NAIC for disclosure or production;

(5) Require the NAIC or a third-party consultant designated by the director to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant designated by the director may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant designated by the director pursuant to this chapter; and

(6) If applicable, provide the identity of the consultant to applicable insurers for documents, materials, or information reporting pursuant to § 58-5A-97, in the case of an agreement involving a third-party consultant.

Source: SL 2015, ch 246, § 17; SL 2024, ch 201, § 5.

58-5A-41.4. Information in possession or control of NAIC or third-party consultant confidential.

Any document, material, or other information in the possession or control of the NAIC or a third-party consultant as designated by the director, shared pursuant to this chapter, is confidential by law and privileged, is not subject to subpoena, open records laws, and is not subject to discovery or admissible as evidence in any private civil action.

Source: SL 2015, ch 246, § 25; SL 2024, ch 201, § 6.