The Joint Insurance Committee of the Massachusetts Legislature has given a favorable report on a self-audit privilege measure supported by the American Insurance Association.
The bill, which would not be retroactive, would protect documents and related materials, employed by insurance companies in conducting internal audits to assure compliance with state and federal laws, from discovery in subsequent civil lawsuits by making them “privileged.”
“This bill will allow insurers to conduct audit programs without the fear that they are waiving a privilege and creating a road map for trial lawyers to bring suits,” stated James T. Harrington, AIA VP, northeast region.
He noted that underlying documents, created before the self-audit, would still be discoverable, and that the measure would not apply to criminal proceedings. Similarly insurance regulators would have access to the privileged material, as it would be kept confidential.
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