The Department of Banking and Insurance need not divulge information about how car insurers set their premiums — even to a state senator.
An appeals court held Thursday that such data falls under the Open Public Records Act’s exemption for propriety commercial information, and that release of some of the documents sought by Sen. Nia Gill could lead to giving some carriers an unfair advantage over others.
The case, Gill v. Department of Banking and Insurance, A-1801-10, dates back to April 2006, when the Senate Commerce Committee that Gill chairs was preparing to hold hearings on whether carriers were using policyholders’ occupation and education — and by extension race and income — in rate determinations.
Gill requested from DOBI all documents relating to "rating-systems and underwriting rules, and any supporting documentation, presented to the department pursuant to law," regarding how carriers use policyholders’ occupations or levels of education to determine rates.
DOBI gave Gill some of what she requested: about 3,500 public records, including information regarding studies done by the insurance industry relating to utilization of either occupation or education as underwriting factors.
But DOBI withheld documents "containing proprietary financial information and/or information which, if disclosed, would provide an advantage to the insurer’s competitors."
Later in 2006, Gill asked DOBI for additional information, including "an explanation of the reasonable and demonstrable relationship between the risk characteristic of the driver insured and the hazards insured against that the department found to justify the use of levels of education and occupation in underwriting insurance."
She also asked that her committee be provided with an in camera review of the proprietary information withheld from the OPRA response.
DOBI responded that under OPRA, N.J.S.A. 47:1A-1.1, a government record does not include "trade secrets and proprietary commercial information or financial information obtained from any sources," and that the DOBI treats certain filings and information from insurers as proprietary because it is information that demonstrates how a company conducts its business and, if disclosed publicly, would give an advantage to competitors.
Gill then filed a complaint with the Government Records Council, which decides disputes over OPRA requests. The GRC in turn sent the case to the Office of Administrative Law.
Administrative Law Judge Jeff Masin found that the documents DOBI refused to disclose were not "underwriting rules" which, under N.J.S.A. 17:29A-46.2(b), "shall be subject to public inspection." Rather, they fell under OPRA’s propriety exclusion.
After the GRC accepted Masin’s decision, Gill appealed.
Appellate Division Judges Clarkson Fisher Jr., Carmen Alvarez and Alexander Waugh Jr. said that, on its face, this case appeared to involve a conflict between two legislative declarations — one mandating that underwriting rules be subject to public inspection and the other protecting trade secrets.
The judges said they were not in a position to override an agency’s factual determinations or disregard its expertise. They also said they could discern no legal errors made by either Masin or the GRC in interpreting the two statutes.
"As observed, the GRC’s disposition recognizes that the legislative direction in N.J.S.A. 17:29A-46.2(b) does not render all materials relating to rate-making subject to public inspection, and OPRA provides an exclusion for proprietary information … such as the materials in question," they said. "Absent further clarification from the Legislature, the statutes were properly interpreted."
Gill, D-Essex, said she would not dispute the court’s ruling. "I accept the court’s opinion on the OPRA matter and will take it under advisement as we review the statutory structure," she said.
Lee Moore, a spokesman for the attorney general’s Division of Law, which represented DOBI, said officials would have no comment.
GEICO’s lawyer, Charles Fisher, of the Madison office of Windels Marx Lane & Mittendorf, did not return a telephone call or email seeking comment.