Statutory authority: ss. 600.01 (2), 601.41 (3), 601.42, 633.17, and 628.34 (12).
Statutes interpreted: ss. 600.01, 610.70, and 628.34 (12).
Proposed rule governing privacy of Consumer Financial and Health Information
The proposed rule is based on the National Association of Insurance Commissioners (“NAIC") model Privacy of Consumer Financial and Health Information Regulation. That model was prepared by the NAIC to meet the requirements of Title V of the Gramm-Leach-Bliley Act (“GLB"). The objective of the NAIC in preparing that model was to achieving uniformity with the federal privacy rules for financial information.
1. Protection of Nonpublic Personal Financial Information:
The financial information portion of the proposed rule tracks the GLB privacy regulations which were promulgated by the federal banking agencies in May, 2000. Licensees (all individuals or entities required to obtain a license under the Wisconsin insurance code, including agents, brokers, TPAs and insurers) must provide notices describing their privacy policies to their consumers and customers, and provide consumers and customers with the opportunity to prohibit the sharing of nonpublic personal information with nonaffiliated third parties (“opt out"). Agents may rely on compliance by the insurers they represent. Disclosure among affiliated entities is not restricted.
In addition, the proposed rule will have a July 1, 2001 effective date and will make it clear that the GLB provisions are not in effect in this state until that date.
The proposed rule includes certain exceptions to the general prohibition on sharing information with non-affiliates without going through the privacy notice and opt out procedures. These exceptions are intended to allow sharing for normal business reasons. The proposed rule permits sharing nonpublic personal financial information with nonaffiliated third parties if the licensee gives initial notice of its privacy polices to the consumer and the information is shared under an agreement for the third party to provide services or under a joint marketing agreement. The proposed rule also permits sharing nonpublic personal financial information, without giving the privacy notices, to accomplish the purpose of processing and servicing a consumer transaction and for certain enumerated purposes including purposes authorized by law, to protect against fraud or breach of confidentiality, to provide information to rate advisory, accreditation, and rating organizations, to attorneys and accountants, to regulators, in connection with a merger or sale of a business, and to respond to a subpoena or court ordered disclosure.
The restrictions on sharing information with non-affiliates applies to information obtained from individuals who are not customers of the licensee but who provide information to obtain a benefit under a policy or as claimant. However licensees are not required to provide privacy notices to those consumers or follow the opt out procedure unless they share the information other than as permitted under the rule. Licensees are required to give those customers an initial privacy notice if the information is shared under a joint service or marketing service contract. In addition a licensee is only required to provide annual privacy notices to commercial lines customers, such as group plan sponsors and employer/worker compensation policyholders, but not to the employees or dependents claiming under those policies, unless the licensee shares information other than as permitted by the rule.
2. Protection of Nonpublic Personal Health Information:
The proposed rule includes separate provisions governing health information. These provisions apply to those licensees who are not already subject to the restrictions applicable to an insurer under s. 610.70, Stats. The provisions are in addition to restrictions that may be applicable under s. 146.82, Stats., to patient health care records. The rule makes it clear that an insurer is responsible for ensuring that its agents are in compliance with s. 610.70, Stats.
Those licensees not governed by s. 610.70, Stats., primarily brokers and third party administrators, are subject to provisions of the proposed rule that prohibit the licensee from sharing health information with any person, affiliated or non-affiliated, unless they obtain the affirmative consent to the sharing of health information with any person. The proposed rule includes exceptions to this restriction intended to allow the licensee to disclose the health care information consistent with the purpose for which it was obtained. Some of these include claims administration; claims adjustment and management; detection, investigation or reporting of actual or potential fraud, misrepresentation or criminal activity; underwriting; policy placement or issuance; loss control; rate-making and guaranty fund functions; reinsurance and excess loss insurance; risk management; case management; disease management; quality assurance; quality improvement; performance evaluation; provider credentialing verification; utilization review; peer review activities; and actuarial, scientific, medical or public policy research. Additional insurance functions may be added with the approval of the commissioner to the extent they are necessary for appropriate performance of insurance functions and are fair and reasonable to the interest of consumers.
The health information provisions of the proposed rule do not apply to licencees who are in compliance with the health information privacy regulations promulgated by the U.S. Department of Health and Human Services (“HHS")pursuant to the Health Information Portability and Accountability Act (HIPAA). The HHS regulations will not be effective for two years.
3. Additional Provisions
The proposed rule includes provisions that prohibit the sharing of account access information and that prohibit unfair discrimination based on a refusal to give consent to the sharing of information.
The Commissioner particularly requests comment on the effect of inclusion of third party claimants and commercial polices within the scope of the rule as well as comment that describes any additional exceptions that should be permitted for the sharing of protected information.
Fiscal Estimate
There will be no state or local government fiscal effect.
Initial Regulatory Flexibility Analysis
Notice is hereby further given that pursuant to s. 227.114, Stats., the proposed rule may have an impact on small businesses. The initial regulatory flexibility analysis is as follows:
a. Types of small businesses affected:
Insurers, insurance intermediaries and third party administrators
b. Description of reporting and bookkeeping procedures required:
None beyond those currently required.
c. Description of professional skills required:
The proposed rule will require maintenance of information and operating systems to comply with its requirements.
Contact Person
A copy of the full text of the proposed rule changes and fiscal estimate may be obtained from the OCI internet WEB site at
http://www.state.wi.us/agencies/oci/ocirules.htm or by contacting Tammi Kuhl, Services Section, Office of the Commissioner of Insurance, at (608) 266-0110 or at 121 East Wilson Street, PO Box 7873, Madison WI 53707-7873.
Notice of Hearing
The Commission proposes an order to amend ss. PSC 1.04, PSC 3.02(1)(b) and (e), and PSC 3.04(1) and to repeal and recreate ch. PSC 2, Wis. Admin. Code, relating to practice and procedure before the Commission.
Notice is given that pursuant to ss. 196.02 (3) and 227.11 (2), Stats., and interpreting ss. 196.24 (3), 196.26 to 196.30, 196.33 and 196.39, Stats., and, generally, ch. 196, Stats., the Commission will hold a hearing
in the Amnicon Falls Hearing Room at the Public Service Commission Building, 610 North Whitney Way, Madison, Wisconsin, on Friday, January 26, 2001, at 9:00 a.m. to consider the amendment and the repeal and recreation of rules relating to practice and procedure before the Commission.
This building is accessible to people in wheelchairs through the Whitney Way first floor (lobby) entrance. Parking for people with disabilities is available on the south side of the building. Any person with a disability who needs additional accommodations to participate in this hearing or who needs to obtain this document in a different format should contact the person identified below.
The Commission will accept written comments on the proposed rules if filed no later than January 19, 2001
Hearing Information
Friday, January 26, 2001 – 9:00 a.m.
Public Service Commission, 610 North Whitney Way,
Madison, WI (Amnicon Falls Hearing Room, 1st Floor)
Summary of Proposed Rule
Analysis Prepared by the Office of the Commissioner of Insurance
Statutory authority: Sections 196.02 (3) and 227.11 (2), Stats.
Statutes interpreted: Sections 196.14, 196.24 (3), 196.26 to 196.30, 196.33, 196.39, 196.72, and 196.795 (9), Stats., and, generally, ch. 196, Stats.
This revision updates and revises the rules relating to practice and procedure before the Commission. This rule also creates procedures for the confidential treatment of records.
The rule establishes processes for filing documents with the Commission, including provisions for facsimile filing, and establishes the number of copies to be filed. The rule identifies persons that need to be served with documents in proceedings and proper methods for service. The rule describes how time is to be computed for determining when a filing or an event is to take place. The rule creates a process for requesting an enlargement of time.
The process for opening dockets by the commission is established in the rule. A docket may be opened at the Commission's own motion or at a person's request. Under the rule, a person may make a request to open a docket by filing an application, petition, or complaint. The rule eliminates the distinction between, and the processes for, the handling of “formal" and “informal" complaints.
If the commission decides to open a docket, it issues a notice of proceeding or notice of investigation. The current rules do not describe how dockets are opened.
Like the current rule, this rule describes who may be parties in a proceeding. The rule establishes the standards that are to be met in order to become a party by right or a party by permissive intervention. The rule repeals the previous distinction between a “limited" and a “full" intervenor.
The rule identifies the role and authority of the administrative law judge presiding at a proceeding and retains the provision from the current rule that commission staff do not appear in a proceeding in support or opposition to a position, but only to discover and present information pertinent to the proceeding.
The rule eliminates specific provisions that detail particular aspects of hearings, such as rules for prehearing conferences, appearances, order of presenting evidence, changes in the time or place of hearings, conduct of hearings, briefs, and transcripts.
The rule revises processes for filing motions, conducting discovery, reopening proceedings, and for requesting interlocutory review by the Commission of rulings of the administrative law judge.
The rule retains provisions requiring notice to customers when a utility requests a general rate increase and provisions requiring a hearing if a utility wishes to abandon facilities or discontinue service. The rule repeals outdated provisions relating to motor carrier authority applications and provisions relating to municipal acquisition proceedings.
The rule also creates a process for a commissioner to request a synopsis or summary of evidence pursuant to s. 196.24(3), Stats. Under the rule, commission staff will prepare a synopsis or summary of the evidence if requested by a commissioner. Parties have the opportunity to respond to the synopsis to add or correct facts.
This rule creates a process for obtaining a designation of confidential status. Under the rule, a determination on whether information shall be treated confidentially shall be made at the time the information is given to the Commission. Under previous Commission procedures, if a person filing a document sought confidential treatment of information in the document, the filer could do so by identifying the grounds under which confidentiality could be granted. The Commission would accept the filing, but the acceptance did not constitute a determination that public access to the information would not be permitted. The Commission would determine if confidential status should be granted when a request for that information was made by another person.
Under this rule, a person who wishes the Commission to keep confidential information in the possession of the Commission, or requested by the Commission, must make an application for confidential status. The application must identify the information for which confidential treatment is sought and identify the authority under which confidential status should be granted. Within 21 days after receiving an application, the Commission may seek additional information from the applicant, if needed, to make a confidentiality determination. The applicant must respond within 30 days to the information request.
The Commission will make a determination on a confidentiality request within 30 days of receiving the additional information or within 30 days of the filing of the application if no additional information is needed. The determination will specify what, if any, information is given confidential treatment and the basis for that determination.
The Commission will give the applicant written notice of its determination. The Commission shall post all determinations regarding confidentiality on its website and may give other appropriate notice. If an applicant is authorized to file information confidentially in the context of a Commission proceeding, the applicant shall serve a copy of the determination on all persons listed on the service list for that proceeding.
Text of Proposed Rule
Section 1. PSC 1.04 is amended to read:
PSC 1.04 Supervisor of hearings. The supervisor of hearings in the legal department [of the commission] of the commission is authorized and directed to assign to each of such agents any administrative law judge employed by the commission the supervision of any particular investigation or the conduct of hearings and taking of testimony bearing upon any particular investigation or hearing made or held by the commission. Such assignments by the supervisor of hearings for the conduct of hearings, if made by indication on the commission calendar of hearings shall constitute specific authority to the agent thus designated to conduct the particular hearing and the taking of testimony in the matter or proceeding to which such designation pertains. The secretary to the commission is authorized, in the absence of the supervisor of hearings, to perform the latter's duties.
Section 2. Chapter PSC 2 is repealed and recreated to read:
PUBLIC SERVICE COMMISSION
Chapter PSC 2
PRACTICE and PROCEDURE
Subchapter I – General
PSC 2.01 Applicability
PSC 2.02 Definitions
PSC 2.03 Computation of Time and Time Limits
PSC 2.04 Filing and Service
PSC 2.05 Requests to Open Dockets
PSC 2.06 Notices
PSC 2.07 Application for Rate Increase; Notice to Customers
PSC 2.08 Abandonment or Discontinuance of Service
PSC 2.10 Confidential Status
Subchapter II – Proceedings
PSC 2.20 Parties and Role of Commission Staff and Administrative Law Judge
PSC 2.21 Intervention
PSC 2.22 Motions
PSC 2.23 Discovery
PSC 2.24 Synopsis or Summary of the Evidence
PSC 2.25 Interlocutory Orders of the Commission
PSC 2.26 Reopening
Subchapter I – General
PSC 2.01 Applicability. This chapter establishes the rules of practice and procedure in PSC investigations, proceedings and other dockets. Portions of this chapter also apply generally to matters such as filing (including filing with a request for confidentiality) computation of time and other administrative matters whether or not in dockets. Where a statute or rule prescribes a particular process for certain kinds of matters, that process shall apply wherever inconsistent with this chapter.
NOTE: Examples of particular processes for certain kinds of matters are the customer complaint rules contained in chapters PSC 113, 134, 165, and 185.
PSC 2.02 Definitions. In this chapter:
(1) “Administrative law judge" means a person designated to preside over a proceeding.
(2) “Application" means a written request that the commission issue or amend a certificate, license, permit or any other approval, authorization or exemption.
(3) “Chairperson" means the chairperson of the commission.
(4) “Commission" means the public service commission.
(5) “Complaint" means a complaint authorized to be filed by ch. 196, Stats.
(6) “Contested case" has the meaning given in s. 227.01 (3), Stats.
(7) “Docket" means an investigation, proceeding or other matter opened by a vote of the commission.
(8) “Hearing" means a contested case hearing or other trial-type hearing.
(9) “Investigation" means an investigation under ch. 196, Stats.
(10) “Party" means a person or agency named or admitted as a party in a proceeding.
(11) “Person" has the meaning given in s. 990.01 (26), Stats.
(12) “Petition" means a written request to the commission, other than an application or complaint, to open a docket.
(13) “Proceeding" means a contested case or other docket that includes a hearing.
(14) “Public hearing" means a hearing, which is not a trial-type hearing.
(15) “Secretary" means the secretary to the commission.
(16) “Working day" has the meaning given in s. 227.01 (14), Stats.
PSC 2.03 Computation of Time and Time Limits. (1)
Definition. In this section, “holiday" has the meaning given in s. 230.35 (4) (a), Stats.
(2) Computation of time. In computing any period of time, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a day the commission is closed, in which case it shall be the next day the commission is open. When a period of time prescribed or allowed is less than 11 days, Saturdays, Sundays, and holidays shall be excluded in the computation.
(3) Enlargement of time. (a) When an act is required by law or by order to be done at or within a specified time, the period of time may be enlarged, but only on good cause shown and upon just terms. Requests under this subsection, when made in a proceeding, shall be made by motion. Requests under this subsection, when made in docket other than a proceeding, shall be made in a letter addressed to the secretary. Requests shall be made within a reasonable time prior to the expiration of the period in question. Requests made after the expiration of the specified time shall not be granted unless the failure to act was the result of excusable neglect. (b) 1. Only the commission may modify a period of time established by the commission. 2. Notwithstanding subd. 1., the chairperson of the commission may enlarge a period established by the commission for up to 3 working days.
(4) Service by mail. Whenever a person is authorized or required to do some act within a prescribed period after the service of any paper upon the person and the paper is served upon the person by mail, 3 days shall be added to the prescribed period.
PSC 2.04 Filing and Service. (1) Definition. In this section, “working day" has the meaning given in s. 227.01 (14), Stats.
