Pre-effective date confidentiality of certain form and rate filings

Bulletin 168

Pre-effective date confidentiality of certain form and rate filings

December 1, 1989

The Bureau of Insurance has received inquiries regarding the pre-effective date confidentiality of rate

filings proposed by commercial health insurance companies, nonprofit hospitals and medical service

organizations. Inquiries have also been received relative to the pre-effective date confidentiality of

form filings proposed by nonprofit hospital, and medical service organizations, commercial health

insurance companies and property and casualty insurance companies. BULLETIN 168

clarifies the Bureau's position on this issue.

RATE FILINGS

Title 24 M.R.S.A. Section 2321(2) provides that a nonprofit hospital and medical service organization's

rate "filing and supporting information shall be a public record within the meaning of Title 1, Section

402, subsection 3. . . ." Commercial individual health rate filings and supporting information are also

public records. See 24-A M.R.S.A. Section 2736(2). The Insurance Code does not address the

confidentiality of commercial group health manual rates filed with the Superintendent. See 24-A

M.R.S.A. Section 2839. Absent an express exemption such as that provided in 24-A M.R.S.A. Sections

2302(1) and

2304(2), (4) (according confidential status to property and casualty rate filings prior to their effective

dates), the terms of the Freedom of Access Law are controlling.

The "Freedom of Access Law," 1 M.R.S.A

mmercial group health manual rates filed with the Superintendent. See 24-A

M.R.S.A. Section 2839. Absent an express exemption such as that provided in 24-A M.R.S.A. Sections

2302(1) and

2304(2), (4) (according confidential status to property and casualty rate filings prior to their effective

dates), the terms of the Freedom of Access Law are controlling.

The "Freedom of Access Law," 1 M.R.S.A. Section 402(3)(B), provides:

The term "public records" shall mean any written, printed or graphic matter or any mechanical or

electronic data compilation

from which information can be obtained, directly or after translation into a form susceptible of visual

or aural comprehension, that is in the possession or custody of an agency or public official of this state

or any of its political subdivisions and has been received or prepared for use in connection with the

transaction of public or governmental business or contains information relating to the transaction of

public or governmental business except: (B) Records that would be within the scope of a privilege

against discovery or use as evidence recognized by the courts of this State in civil or criminal trials if

the records or inspection thereof were sought in the course of a court proceeding[.]

One applicable privilege concerns trade secrets. See M.R. Evid. 507. Maine has statutorily adopted a

definition of "trade secret." A "trade secret" is defined as:

information, including, but not limited to, a formula, pattern, compilation, program, device, method,

technique or process, that:

(A) Derives independent economic value, actual or potential, from not being generally known to and

not being readily ascertainable by proper means by other persons who can obtain economic value

from its disclosure or use; and (B) Is the subject of efforts that are reasonable under the

circumstances to maintain its secrecy. 10 M.R.S.A. Section 1542(4).

The trade secret privilege is only one of the evidentiary privileges

onomic value, actual or potential, from not being generally known to and

not being readily ascertainable by proper means by other persons who can obtain economic value

from its disclosure or use; and (B) Is the subject of efforts that are reasonable under the

circumstances to maintain its secrecy. 10 M.R.S.A. Section 1542(4).

The trade secret privilege is only one of the evidentiary privileges. This bulletin should not be read to

exclude consideration of other applicable privileges or other applicable exceptions under the Freedom

of Access Law.

Nonprofit hospital and medical service organizations or commercial health companies may wish to

invoke the trade secret privilege (or any other applicable privilege). If they do so, they must prove, to

the satisfaction of the Superintendent, that the relevant proposed rate filings and "privileged" within

the meaning of 1 M.R.S.A. Section 402(3)(B).

FORM FILINGS

The Legislature has not afforded confidential treatment to unexecuted contract, certificate or

application forms submitted to the

Superintendent for approval. Therefore, by its terms the Freedom of Access Law requires disclosure

unless a specific exception applies. One exception regards evidentiary privilege; and one privilege

regards trade secrets.

As mentioned, there is no specific confidentiality exception for property and casualty insurance forms

unexecuted contract, certificate or

application forms submitted to the

Superintendent for approval. Therefore, by its terms the Freedom of Access Law requires disclosure

unless a specific exception applies. One exception regards evidentiary privilege; and one privilege

regards trade secrets.

As mentioned, there is no specific confidentiality exception for property and casualty insurance forms.

Therefore, if property and casualty insurers wish to assert pre-effective date confidentiality relative to

their forms, they must comply with this bulletin.

It is incumbent upon the party requesting confidential treatment on that ground to prove, to the

satisfaction of the Superintendent, that the unexecuted forms are trade secrets, in and of themselves.

Again, this is not intended to preclude consideration of other relevant exceptions to the rule requiring

disclosure.

CONCLUSION

The proposed rate and form filings of commercial health insurance companies, nonprofit hospitals and

medical service organizations are public records as defined by the Freedom of Access Law. If a filing

entity requests confidential treatment, it must provide the Superintendent with a written legal

argument supporting the entity's contention of confidentiality. The request for confidential treatment

and the required legal argument must be provided at the time the entity files its rates or forms.

Unless the entity can show that the proposed rate and/or form filings are privileged and therefore

excepted from the definition of public records, these filings are available for public inspection to the

extent permitted by the Freedom of Access Law.

Joseph A. Edwards

Superintendent of Insurance

NOTE: This bulletin is intended solely for informational purposes. It is not intended to set forth legal

rights, duties or privileges nor is it intended to provide legal advice. Readers are encouraged to

consult applicable statutes and regulations and to contact the Bureau of Insurance if additional

information is needed.