AIA Self-Critical Audit Bill In New Hampshire Goes To Study With A Positive Report
Concord, NH, March 27, 2000-- The American Insurance Association's bill (HB 1164) to provide a privilege for insurance company self-critical audits in New Hampshire will be sent to an interim study committee this week, with a positive report.
This action represents real progress on the bill. AIA has been working with New Hampshire legislators and the Department of Insurance to fine tune the bill in a way that is acceptable to policymakers and regulators. The Department testified in favor of the bill earlier this year.
"The interim study should give us time to work out the final details and have this bill ready for passage next year," said Suzanne Bump, AIA assistant vice president, northeast region. "Unfortunately, the committee's workload makes passage this session impossible. However, the committee's report to the interim study is favorable.
"The benefits of a vigorous auditing program are not limited to carriers. Consumer protection is enhanced by vigorous self-policing by insurers of their compliance with state and federal laws. Where an effective auditing program is utilized, consumers can feel confident that insurers meet the letter of applicable law," said Bump. "In addition, an insurance compliance audit program acts as an adjunct private enforcement mechanism. Insurance regulators will be able to maximize their resources and, under HB 1164, will continue to have access to compliance self-audits during the examination process."
"Insurers have becoming increasingly concerned about the vulnerability of compliance audit documents to discovery by the plaintiff's bar," added Bump. "Litigants increasingly have been attempting to end-run discovery limitations inherent in the judicial discovery process by using state insurance codes and regulations to assert that the insurer has waived any available privileges or confidentiality provisions simply by adhering to statutory provisions or regulations."
The American Insurance Association is a trade organization representing more than 300 major insurance companies that provide all lines of property-casualty insurance. The association is headquartered in Washington, D.C. AIA press releases are available at www.aiadc.org.