KRS 304.37-050: Confidential treatment of information obtained by commissioner --

Sharing and use of information.

(1) (a) Subject to paragraph (b) of this subsection and subsection (3) of this section,

all documents, materials, or other information in the possession or control of

the department that are obtained by or disclosed to the commissioner or any

other person in the course of an examination, analysis, or investigation made

under KRS 304.37 -040 and all information reported or provided to the

department under KRS 304.37-020, 304.37-030, and 304.37-160 shall:

1. Be confidential by law and privileged;

2. Not be subject to:

a. The Kentucky Open Records Act, KRS 61.872 to 61.884;

b Subpoena; or

c. Discovery or admission into evidence in any private ci vil action;

and

3. Be recognized as being proprietary and containing trade secrets.

(b) The commissioner may use the documents, materials, or other information in

the furtherance of any regulatory or legal action brought as a part of the

commissioner's official duties.

(c) The commissioner shall not otherwise make the documents, materials, or

other information public without the prior written consent of the insurer to

which it pertains unless the commissioner, after giving the insurer and its

affiliates who would be affected thereby notice and opportunity to be heard,

determines that the interests of policyholders, shareholders, or the public will

be served by the publication thereof, in which event the commissioner may

publish all or any part thereof in suc h manner as the commissioner may deem

appropriate.

(d) For purposes of the information reported and provided to the department

pursuant to KRS 304.37 -020, 304.37 -030, 304.37 -040, and 304.37 -160, the

commissioner shall maintain the confidentiality of the:

1. Group capital calculation and the 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 United States groupwide supervisor; and

2. 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 -United States

groupwide supervisors.

(2) Neither the commissioner nor any person who received documents, materials, or

other information while acting under the authority of the commissioner or with

whom the documents, materials, or other information are shared, pursuant to this

subtitle, shall be permitted or required to testify in any private civil action

concerning any confidential documents, materials, or other information subject to

subsection (1) of this section.

(3) The commissioner:

(a) May share documents, materials, or other information, including confidential

and privileged documents, materials, or other information subject to

subsection (1) of this section, including documents and materials containing

trade secrets or proprietary information, with:

1. Other state, federal, and international regulatory agencies;

2. The NAIC;

3. Any third-party consultants designated by the commissioner; and

4. State, federal, and international law enforcement authorities, including

members of any supervisory college described in KRS 304.37-055;

if 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 confidentiality;

(b) May only share confidential and privileged documents, materials, or ot her

information reported pursuant to KRS 304.37 -020(14), notwithstanding

paragraph (a) of this subsection, with commissioners of states having statutes

or regulations substantially similar to subsection (1) of this section, and who

have agreed in writing not to disclose the information;

(c) 1. May receive documents, materials, or other information, including

confidential and privileged documents, materials, or other information,

including proprietary information or trade secrets, from the NAIC and its

affiliates and subsidiaries and from regulatory and law enforcement

officials of other foreign or domestic jurisdictions; and

2. Shall maintain as confidential or privileged any documents, materials, or

other information received with notice or the understandin g that it is

confidential or privileged under the laws of the jurisdiction that is the

source of the documents, materials, or other information; and

(d) Shall enter into written agreements with the NAIC and any third -party

consultant designated by the comm issioner governing sharing and use of

information provided pursuant to this subtitle and consistent with this

subsection that:

1. Specify procedures and protocols regarding the confidentiality and

security of information shared with the NAIC or a designated third-party

consultant pursuant to this subtitle, including procedures and protocols

for sharing by the NAIC with other state, federal, or international

regulators. The agreement shall provide that the recipient agrees in

writing to maintain the confiden tiality and privileged status of the

documents, materials, or other information and has verified in writing

the legal authority to maintain such confidentiality;

2. Specify that ownership of information shared with the NAIC or a third -

party consultant pursuant to this subtitle remains with the commissioner,

and the NAIC's or a designated third -party consultant's use of the

information is subject to the direction of the commissioner;

3. Except for documents, material, or information reported pursuant to

KRS 304.37-020(16), prohibit the NAIC or designated third -party

consultant from storing the information shared pursuant to this subtitle

in a permanent database after the underlying analysis is completed;

4. Require prompt notice be given to an insurer whose c onfidential

information in the possession of the NAIC or a designated third -party

consultant pursuant to this subtitle is subject to a request or subpoena to

the NAIC or a designated third -party consultant for disclosure or

production;

5. Require the NAIC or a designated third -party consultant to consent to

intervention by an insurer in any judicial or administrative action in

which the NAIC or a designated third -party consultant may be required

to disclose confidential information about the insurer shared with the

NAIC or a designated third-party consultant pursuant to this subtitle; and

6. For documents, material, or information reporting pursuant to KRS

304.37-020(16), in the case of an agreement involving a third -party

consultant, provide for notificatio n of the identity of the consultant to

the applicable insurers.

(4) The sharing of information by the commissioner shall not constitute a delegation of

regulatory authority or rulemaking, and the commissioner is solely responsible for

administration, execution, and enforcement of this subtitle.

(5) A waiver of any applicable privilege or claim of confidentiality in the documents,

materials, or information shall not occur as a result of disclosure to the

commissioner under this section or as a result of sharing as authorized in subsection

(3) of this section.

(6) Documents, materials, or information in the possession or control of the NAIC or a

third-party consultant designated by the commissioner pursuant to this subtitle shall:

(a) Be confidential by law and privileged; and

(b) Not be subject to:

1. The Kentucky Open Records Act, KRS 61.872 to 61.884;

2. Subpoena; or

3. Discovery or admission into evidence in any private civil action.

(7) (a) The group capital calculation and resulting group capital rat io, and the

liquidity stress test along with its results and supporting disclosures, required

under KRS 304.37 -020 are regulatory tools for assessing group risks and

capital adequacy and group liquidity risks, respectively, and are not intended

as a means to rank insurers or insurance holding company systems generally.

(b) Except as permitted under paragraph (c) of this subsection or as may

otherwise be required under the provisions of this subtitle, no person shall

make, publish, disseminate, circulate, or place before the public, or cause

directly or indirectly to be made, published, disseminated, circulated, or

placed before the public:

1. In a newspaper, magazine, or other publication;

2. In the form of a notice, circular, pamphlet, letter, or poster;

3. Over any radio or television station or any electronic means of

communication available to the public; or

4. In any other way as an advertisement, announcement, or statement;

containing a representation or statement with regard to the group capital

calculation, group capital ratio, the liquidity stress test results, or supporting

disclosures for the liquidity stress test of any insurer or insurer group or of any

component derived in the calculation by any insurer, broker, or other person

engaged in any manner in the insurance business.

(c) If any materially false statement with respect to the:

1. Group capital calculation, resulting group capital ratio, an inappropriate

comparison of any amount to an insurer's or insurance group's group

capital calculation or resulting group capital ratio; or

2. Liquidity stress test result, supporting disclosures for the liquidity stress

test, or an inappropriate comparison of any amount to an insurer's or

insurance group's liquidity stress test result or supporting disclosures;

is published in any written publication and the insurer is able to demonstrate

to the commissioner with substantial proof the falsity of such statement or the

inappropriateness, as the case may be, then the insurer may publish

announcements in a w ritten publication if the sole purpose of the

announcement is to rebut the materially false statement.