The New Jersey Department of Banking and Insurance (the Department) has addressed whether the supplemental compensation exhibit to the initial cap Annual Statement is subject to public disclosure. The Department issued a bulletin advising domestic insurers, HMOs, hospital service corporations, medical service corporations, health service corporations, dental service corporations, and dental plan organizations (collectively, Carriers) of the Department’s process to handle requests under the Open Public Records Act, N.J.S.A. 47:1a-1 et seq. (O.P.R.A.) or common law rights of access to government records, for production of annual financial statements, specifically the Carrier’s Supplemental Compensation Exhibit (SCE).
The Department previously granted a Carrier’s request to redact very limited compensation information from an SCE that was the subject of an O.P.R.A. request. The Carrier had asserted an O.P.R.A. exception and requested redaction on the basis that the compensation of certain individuals should be held as proprietary because it would place the Carrier at a competitive disadvantage for retaining/attracting talent. In the interest of uniformity, the Department is notifying Carriers that it has endeavored to present other Carriers with similar opportunities to assert valid objections to the release of SCEs, and has received inconsistent responses.
Because such requests and the privilege claimed were not consistent, the Department has re-evaluated its position on this issue and determined that it is in the interest of the public and domestic Carriers to require uniformity. Indeed, the NAIC and the Department have determined that the filing of the SCEs that contain compensation data for Carriers’ boards, directors, and senior management is subject to public disclosure pursuant to O.P.R.A. and information which insurance consumers are entitled to know. Therefore, the SCE Carriers must file SCEs in full, without redaction. To maintain a level playing field, domestic Carriers will be treated similarly. Carriers should be guided accordingly. A copy of the Department’s bulletin addressing this point is linked here. See Bulletin No. 18-03 (March 16, 2018).