Section 991.1406 - Examination(a) Subject to the limitation contained in this section and in addition to the powers which the department has under law relating to the examination of insurers, the department shall also have the power to examine an insurer registered under section 1404 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by: (1) the ultimate controlling person;(2) an entity or combination of entities within the insurance holding company system; or(3) the insurance holding company system on a consolidated basis.(a.1) The department may order an insurer registered under section 1404 to produce records, books or other information papers in the possession of the insurer or its affiliates as are reasonably necessary to ascertain the financial condition of the insurer or to determine compliance with this article.(a.2) To ascertain the financial condition of the insurer, including the enterprise risk to the insurer by: (1) the ultimate controlling person;(2) an entity or combination of entities within the insurance holding company system; or(3) the insurance holding company system on a consolidated basis, the department may order an insurer registered under section 1404 to produce information not in the possession of the insurer if the insurer can obtain access to the information under a contractual relationship, a statutory obligation or other method. If the insurer may not obtain the information requested by the department, the insurer shall provide the department a detailed explanation of the reason the insurer may not obtain the information and the identity of the holder of information. If the insurer fails to comply with this subsection or the department determines that the detailed explanation is without merit, the department may suspend or revoke the insurer's license or require the insurer to pay an administrative penalty of one thousand dollars ($1,000) per day until the information is produced. The proceeding for suspension, revocation or imposition of a penalty shall be conducted pursuant to 2 Pa.C.S. (relating to administrative law and procedure).(b) The department may retain at the registered insurer's expense such attorneys, actuaries, accountants and other experts not otherwise a part of the department's staff as shall be reasonably necessary to assist in the conduct of the examination under subsections (a), (a.1) and (a.2). Any persons so retained shall be under the direction and control of the department and shall act in a purely advisory capacity.(c) Each registered insurer producing for examination records, books and papers pursuant to subsections (a), (a.1) and (a.2) shall be liable for and shall pay the expense of such examination as provided for in Article IX of the act of May 17, 1921 (P.L.789, No.285), known as "The Insurance Department Act of one thousand nine hundred and twenty-one."(d) If the insurer fails to comply with an order issued under this section, the department has the power to examine the insurer's affiliates to obtain the information necessary to determine an insurer's compliance with this section. The department also has the power to: (2) administer oaths; and(3) examine under oath any person as to any matter pertinent to determining compliance with this section. Upon the failure or refusal of a person to obey a subpoena, the department may petition a court of competent jurisdiction and, upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. When subpoenaed, a person shall attend as a witness at the place specified in the subpoena. Witnesses shall be paid the same fees and mileage as are paid to witnesses in the courts of this Commonwealth. Fees, mileage and expense necessarily incurred in securing the attendance and testimony of witnesses shall be itemized, charged against and paid by the person being examined.
Amended by P.L. 1111 2012 No. 136, § 6, eff. 9/3/2012.1921, May 17, P.L. 682, No. 284, art. XIV, § 1406, added 1992, Dec. 18, P.L. 1519, No. 178, § 19, effective in 120 days.