Potential Release Of Confidential Information Pertaining To Insurers Doing Business In Louisiana
The Louisiana Department of Insurance (“LDOI”) has recently sent out a communication to a number of insurance companies doing business in the State of Louisiana, informing those insurers of a possible release of confidential, privileged or proprietary information.The Louisiana Legislative Auditor (“LLA”) is currently engaged in an audit of the LDOI according to Government Auditing Standards (Yellow Book standards).
In March of 2008, the LLA apparently executed a confidentiality agreement with the LDOI to maintain the confidentiality of any information in the conduct of the audit.Recently, this confidentiality agreement has been terminated, reportedly by the LLA.
The LDOI has asserted that certain of the information requested by the LLA is the confidential, privileged or proprietary information of various insurance companies doing business in Louisiana.Under certain third-party confidentiality agreements between the LDOI and insurers, as well as pursuant to the confidentiality provisions of the Louisiana Insurance Code, the LDOI is resisting providing this information to the LLA.
Generally, information obtained by the LLA in the course of an audit is confidential under applicable law except to the extent that such information is determined to be material to the purposes of the audit and included in the audit findings.
The LDOI’s recent communication indicated that this confidential, privileged or proprietary information may be released to the LLA in the course of the audit.The LDOI has not specifically identified what types of information the LLA is requesting.
The LDOI has recommended that affected insurance companies consider filing appropriate pleadings in ongoing litigation between the LDOI and the LLA over this issue, Louisiana Department of Insurance through James J. Donelon, Commissioner of Insurance vs. Steve J. Theriot, CPA Legislative Auditor et al, which is currently pending in the Nineteenth Judicial District Court for the Parish of East Baton Rouge, State of Louisiana, suit number 572609.