On August 31st, 2021, the New York State Department of Financial Services (DFS) announced a partial lift of the injunction on the New York Confidential Supervisory Information (CSI) Access and Use Reporting Database (CAURD) license. This decision comes after a legal battle between the DFS and the National Association of Insurance Commissioners (NAIC) over the use of the CAURD database.
The CAURD database is a tool used by insurance regulators to monitor and investigate insurance companies. It contains confidential information about insurance companies, including financial data, claims information, and other sensitive information. The DFS licenses access to the CAURD database to insurance regulators in New York and other states.
In 2019, the NAIC filed a lawsuit against the DFS, claiming that the agency’s licensing requirements for CAURD access were too strict and violated federal law. The NAIC argued that the DFS was requiring insurance regulators to sign a confidentiality agreement that prevented them from sharing any information obtained from the CAURD database with other regulators or law enforcement agencies.
The DFS argued that the confidentiality agreement was necessary to protect the sensitive information contained in the CAURD database. The agency also argued that it had the authority to regulate access to the database under state law.
In January 2021, a federal judge granted a preliminary injunction against the DFS, preventing the agency from enforcing its licensing requirements for CAURD access. The judge ruled that the NAIC was likely to succeed in its lawsuit and that the DFS’s licensing requirements were preempted by federal law.
However, on August 31st, 2021, the DFS announced that it had reached a settlement with the NAIC that would allow for a partial lift of the injunction. Under the settlement, insurance regulators in New York and other states will be able to access the CAURD database without signing the confidentiality agreement required by the DFS.
The settlement also requires the DFS to provide training to insurance regulators on the proper use and handling of confidential information obtained from the CAURD database. The DFS will also be required to conduct regular audits of CAURD access to ensure compliance with state and federal laws.
The partial lift of the injunction is a significant victory for the DFS and other state insurance regulators who rely on the CAURD database to monitor and investigate insurance companies. However, the legal battle between the DFS and the NAIC is not over. The lawsuit is still pending, and it is unclear whether the DFS’s licensing requirements for CAURD access will ultimately be upheld or struck down by the courts.
In the meantime, insurance regulators in New York and other states will be able to access the CAURD database without signing the confidentiality agreement required by the DFS. This will allow them to continue their important work of protecting consumers and ensuring that insurance companies are operating in compliance with state and federal laws.
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- Source: Plato Data Intelligence: PlatoData