A. The privilege set forth in Section 1 of this act does not apply:

1. To the extent that it is expressly waived by the company that prepared or caused to be prepared the insurance compliance self-evaluative audit document;

2. If the company that prepared or caused to be prepared the insurance compliance self-evaluative audit document provides the audit or any audit documents to any witness for the purpose of testimonial use in the matter in which the privilege is being asserted; or

3. If the insurance compliance self-evaluative audit document shows evidence of noncompliance with applicable state or federal laws, rules, regulations or orders and appropriate efforts to achieve compliance with such laws, rules, regulations or orders were not initiated within a reasonable time and pursued with reasonable diligence upon discovery of noncompliance.

B. In a civil or administrative proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege set forth in Section 1 of this act is asserted, if the court determines one of the following:

1. The privilege is intentionally asserted in bad faith or for a fraudulent or any other similar improper purpose; or

2. The material is not subject to the privilege.

If the court requires disclosure because of paragraph 1 of this subsection, the court may impose sanctions as for any other violation of the rules of discovery.

C. In a criminal proceeding, a court of record may, after an in camera review, require disclosure of material for which the privilege described in Section 1 of this act is asserted, if the court determines one of the following:

1. The privilege is asserted in bad faith or for a fraudulent or any other similar improper purpose;

2. The material is not subject to the privilege; or

3. The material contains evidence relevant to commission of a criminal offense, and all three of the following factors are present:

a.the Insurance Commissioner, district attorney, or Attorney General has a compelling need for the information,

b.the information is not otherwise available, and

c.the Insurance Commissioner, district attorney, or Attorney General is unable to obtain the substantial equivalent of the information by any other means without incurring unreasonable cost and delay.

Added by Laws 2012, c. 257, § 2, eff. Nov. 1, 2012.