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Insurance Trades File Suit to Protect Confidentiality of Proprietary Information

AUSTIN, TX, Sept. 14, 2004 - In an effort to preclude public disclosure of insurers' proprietary information, three national insurance trade organizations filed suit in Travis County District Court on Friday. The suit seeks to protect the confidentiality of insurance company information that could be left unprotected as a result of a ruling by the state's attorney general.

The suit against the Texas Department of Insurance (TDI) and Attorney General Greg Abbott was filed by the Property Casualty Insurers Association of America (PCI), American Insurance Association (AIA), and the National Association of Mutual Insurance Companies (NAMIC). The suit was filed as a result of a ruling by Abbott's office that would make public certain data collected by the TDI in conjunction with a study mandated by the state legislature regarding the use of credit information by insurers.

In June 2004, TDI received a request for release of some information relating to the study. TDI requested an open records decision from the Attorney General's office, but failed to notify the insurers whose information was subject to the request about this action. TDI's failure to notify companies denied insurers their right to argue the information should not be released.

Specifically, the complaint says, "TDI did not notify any insurance companies whose information was subject to the request of the receipt of the request. As a result, the insurance companies were deprived of their right to submit comments about why their confidential and/or proprietary information should not be released. .the Public Information Act affords that right to persons whose privacy and or property interests are involved in information subject to a request. In fact, subsection (d) provides that a governmental body 'shall make a good faith attempt to notify that person of the request for the attorney general's decision' and sets forth specific requirements for the notice."

The complaint further states, "In Tex. Att'y Gen. OR2004-7453 (September 1, 2004), the Attorney General ruled that the provision raised by the TDI protected only information as it appeared in the TDI's final credit scoring report and not in the format in which the TDI collected the information to prepare the report. That ruling emasculates the confidentiality afforded in Article 21-49-2U. In addition, because the issues had not been raised by TDI, the Attorney General did not rule on the applicability of other sections of the [law]."

Insurers operate under the belief that this information is maintained as a trade secret. Due to the highly competitive environment in which insurers operate, the public disclosure of the confidential commercial information requested could give an unfair advantage to competitors.

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For further information contact:
Neil Alldredge at nalldredge@namic.org
or (317) 875-5250