R.I.’s Beacon Mutual Seeks to Quash State Subpoena for Its Records

March 8, 2006

Lawyers for Beacon Mutual Insurance Co. in Rhode Island have challenged a state subpoena in court, saying the request to search company computers is unreasonably broad and should be quashed.

The state has been investigating allegations that Rhode Island’s largest worker’s compensation insurer gave price breaks to certain policy holders, including its former board chairman.

On Friday, state regulators and forensic auditors reviewed records at the company’s headquarters in Warwick. Company lawyers refused to let state auditors copy files from 22 computers, including one belonging to Beacon president Joseph Solomon.

In court papers filed Monday, Beacon Mutual lawyers calls the subpoena “a scatter-shot fishing expedition.” The company say the state is potentially seeking confidential medical information, personal employee data and others protected by attorney-client privilege.

The state director of business regulation, A. Michael Marques, said he is not interested in reviewing personal information. But he said the state has the right to look at everything.

“A forensic audit by its very nature has to be broad-based,” Marques said. “We’re trying to connect the dots and find the truth, and that means we have to have all the information.”

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