Biennial Report to the 83rd Texas Legislature: Department of Insurance Page: 8
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Financial
Information-Sharing
Background:
Under certain circumstances, Texas law allows TDI to share confidential and/or privileged information
about insurers with other insurance regulators. These laws include Texas Insurance Code, sections 32.023
and 823.011. Section 823.011 requires TDI to verify that the entities with whom it seeks to share
information have laws that provide at least the same confidentiality protections as Texas law. These
information-sharing provisions are important for TDI to coordinate with other jurisdictions in the
supervision of groups of affiliated carriers and to monitor the solvency and financial condition of large
insurers and groups that operate in multiple jurisdictions.
Issue:
Current Texas law does not provide a single, uniform information-sharing statute that allows TDI to share
confidential or privileged information with other jurisdictions and which also protects the confidential or
privileged nature of information TDI receives from other jurisdictions. Instead, TDI's authority for sharing
and receiving confidential information exists in isolated sections throughout the Texas Insurance Code with
variable requirements. This lack of uniformity obscures TDI's full authority to share information under the
Texas Insurance Code and presents a challenge for the regulation of carrier groups. Specifically, just as TDI
must verify the legal authority of another jurisdiction to maintain the confidential or privileged nature of the
information before we can share information, other jurisdictions also must, in accordance with their laws,
verify that TDI can maintain the confidential or privileged nature of the information it receives. This
verification is often difficult, especially for international jurisdictions, because of the many and variable
provisions regarding information sharing under the Texas Insurance Code.
Many lessons were learned following the downturn in the global economy after 2007. Clarifying and
standardizing TDI's information-sharing authority would enable TDI to more effectively and efficiently
supervise large insurers and groups of affiliated carriers. It would also enable TDI to better protect Texas
policyholders from systemic and group-wide solvency and financial issues that can adversely impact large
insurers and groups of carriers that operate in multiple jurisdictions.
Recommendation:
" Amend Chapter 32 of the Texas Insurance Code to add a section that would clarify and standardize
TDI's authority to share and receive confidential and/or privileged information about the financial
condition of an insurer or insurance group that operates both in Texas and in other jurisdictions.
This new section would not create any new type or class of confidential information. Rather, it
would address the treatment of information that is already confidential as a matter of law.
o The new section should provide that the commissioner may, at the commissioner's sole
discretion, share confidential or privileged information about the financial condition of an
insurer or group of affiliated carriers with an insurance regulator or analogous financial8
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Texas. Department of Insurance. Biennial Report to the 83rd Texas Legislature: Department of Insurance, report, December 2012; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth575994/m1/9/: accessed July 8, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.