Anthony Veloso v. Massachusetts Division of Insurance (SPR 20191836)

The Commonwealth of Massachusetts William Francis Galvin, Secretary of the Commonwealth Public Records Division

Rebecca S. Murray Supervisor of Records

September 23, 2019 SPR19/1836

Mindy A. Merow Rubin, Esq.

Counsel to the Commissioner/Records Access Officer Massachusetts Division of Insurance

1000 Washington Street

Boston, MA 02118

Dear Attorney Rubin:

I have received the petition of Anthony Veloso appealing the response of the Division of Insurance (Division) to a request for public records. G. L. c. 66, § 10A; see also 950 C.MLR. 32.08(1). Specifically, on July 25, 2019, Mr. Veloso requested the following records:

1. “Rate increase history for traditional long term care insurance carrie[r]s.”

2. “Existing proposed rate increases for traditional long term care insurance carriers.”

3. “Any rules/regulations that state how much time can pass between rate increases of traditional long term care insurance.” )

Previous appeal

This request was the subject of a previous appeal. See SPR19/1635 Determination of the Supervisor of Records (August 23, 2018). In my August 23" determination, I found that the Division had not met its burden to withhold portions of the responsive records under Exemption (d). Accordingly, I ordered the Division to provide Mr. Veloso with a response to the request, provided in a manner consistent with the order, the Public Records Law and its Regulations. Following the August 23" determination, the Division responded on August 30, 2019, providing additional information regarding its Exemption (d) claim, Unsatisfied with the Division’s response, Mr, Veloso petitioned this office and this appeal, SPR19/1836, was opened as a result.

The Public Records Law

The Public Records Law strongly favors disclosure by creating a presumption that all governmental records are public records, G. L. c. 66, § 10A(d); 950 C.MLR. 32.03(4). “Public records” is broadly defined to include all documentary materials or data, regardless of physical _ form or characteristics, made or received by any officer or employee of any town of the

One Ashburton Place, Room 1719, Boston, Massachusetts 02108 * (617) 727-2832¢ Fax: (617) 727-5914 sec.state.ma.us/pre * pre@sec.state.ma.us

Mindy A. Merow Rubin, Esq. SPR19/1836 Page 2 September 23, 2019

Commonwealth, unless falling within a statutory exemption. G. L. c. 4, § 7(26).

It is the burden of the records custodian to demonstrate the application of an exemption in order to withhold a requested record. G. L. c. 66, § 10(b)(iv); 950 C.M.R. 32.06(3); see also Dist. Attorney for the Norfolk Dist. v. Flatley, 419 Mass. 507, 511 (1995) (custodian has the burden of establishing the applicability of an exemption). To meet the specificity requirement a custodian must not only cite an exemption, but must also state why the exemption applies to the withheld or redacted portion of the responsive record.

If there are any fees associated with a response a written, good faith estimate must be provided. G. L. c. 66, § 10(b)(viii); see also 950 C.M.R. 32.07(2). Once fees are paid, a records custodian must provide the responsive records.

The Division’s August 30" response

In its August 30, 2019 response, the Division asserts that “[t]he requested records are exempt from disclosure pursuant to M.G.L. c. 4, § 7(26)(d), as they are related to the ongoing and incomplete development of a policy position.” The Division states that both of Mr. Veloso’s requests for “Existing proposed rate increases for traditional long term care insurance carriers” and “currently applied for rate increases of traditional long term care insurance, specifically for the insurer, Genworth[,]” seek “. .. access to proposed rate increase filings that are currently under review by the Division.” The Division also states “. . . that there are no proposed long-term care rate increase filings by Genworth currently under review.”

The Division explains that its “. . . review of filings for premium rate changes is one of the mechanisms by which [it] develops policy positions on insurance products, For reasons of transparency and consistency, it has been the long-standing philosophy of the Division to treat all filings the same way. Multiple factors are considered by the Division during its review of filings, including the future solvency of the company seeking the change, the effect the rate change will have on consumers and the possibility of disruption to the insurance market.” The Division asserts that its “. . . review and acceptance of a particular rate filing amounts to a policy decision in regard to what level of rate increases may or may not be appropriate for a specific company, product, or group of policyholders or consumers, and the Massachusetts insurance market, generally. The materials and information contained in a company’s filing for a proposed premium rate change are, therefore, essential to the Division’s development of policy positions.”

The Division indicates that its “. . . review of a proposed long-term care insurance premium rate change is governed by statute, and [it] may disapprove a filing where it is determined that ‘the benefits provided therein are unreasonable in relation to the premium charged or if it contains any provision which is unjust, unfair, inequitable, misleading or deceptive or which encourages misrepresentation.’ See M.G.L. c. 175, § 108(8)A.” The Division further explains that “[p]ursuant to the current regulations applicable to long-term care insurance, all rate filings must, among other things, explain the formulas used by the filing company to derive rates, expected claim costs and certain underlying assumptions. The Division requires the

Mindy A. Merow Rubin, Esq. SPR19/1836 Page 3 September 23, 2019

filing company to submit actuarial memoranda that substantiate any request for a rate increase based on experience.” The Division explains that where “[t]here is no set formula for what constitutes an ‘unreasonable’ rate change for purposes of disapproval[,] [it] must review everything that is contained in the filing and, relying on its own knowledge and judgment, determine if a proposed rate meets the applicable statutory and regulatory standards.”

The Division posits that “[i]ntra-agency communications take place. . . as [its] staff review and provide input to senior level policymakers within the [Division] about various aspects of the filing. The Division’s actuaries and policy form reviewers actively participate, and lawyers and financial examiners may be consulted throughout the deliberative process, from the time a filing is submitted until a final decision is made, resulting in either the requested rates being placed on file or disapproval of the filing. ... These intra-agency communications, along with correspondence between the Division and the filing company, relate directly to the policy position under development.”

Stating some of the factors that it has to consider, the Division asserts that “[i]n many cases, a final rate filing is the result of discussions between the Division and the filing company as to what constitutes a ‘reasonable’ rate change in the current marketplace. As such, a filing for a premium rate change may ultimately be substantially revised prior to it being placed on file and thereafter taking effect.” Consequently, the Division states that “. . . review and evaluation of a requested rate change is ongoing until such time as the filing is disapproved or placed on file. The Division’s deliberations continue as it balances the competing interests of insurer solvency and affordability for consumers and takes into account other methods for protecting consumers who have previously purchased a policy. The deliberative process allows the Division to maintain a stable and competitive marketplace for consumers.” |

Additionally, the Division indicates that “[rJeleasing a filing before [its] review of a requested rate change is complete could taint the deliberative process by leading to chaos and disruption in the marketplace . . . [where,] substantial changes may be made to the filing prior to ,., accepting it for use in the marketplace.” The Division explains that “. . . release of a - company’s initial filing then, which may contain requested rate changes that will never go into effect, prior to a final decision being made by the Division could lead to consumers making personal financial decisions without accurate data, including prematurely dropping coverage or reducing benefits. It would also lead to tremendous pressure on the Division to respond to these consumers, but having not yet completed the deliberative process the Division would be unable to provide accurate data to allow the consumer to make an informed decision.” As such, the Division contends that “. . . publicly releasing a request for premium rate changes before [it] has completed its review and made a policy decision on whether and how the requested rate will affect the future solvency of the company, whether there are adequate consumer protections and whether the new rate will destabilize the market will have adverse consequences on the public and the Division.” .

Mindy A. Merow Rubin, Esq. ~ SPR19/1836 Page 4 September 23, 2019

Exemption (d) Exemption (d) allows the withholding of:

inter-agency or intra-agency memoranda or letters relating to policy positions being developed by the agency; but this subclause shall not apply to reasonably completed factual studies or reports on which the development of such policy positions has been or may be based

G.L. ¢. 4, § 7(26)(d).

Exemption (d) is intended to avoid premature release of materials that could taint the deliberative process if disclosed. Its application is limited to recommendations on legal and policy matters found within an ongoing deliberative process. See Babets v. Sec’y of the Exec. Office of Human Servs., 403 Mass. 230, 237 n.8 (1988). Factual reports which are reasonably complete and inferences which can be drawn from factual investigations, even if labeled as opinions or conclusions, are not exempt as deliberative or policy making materials. G. L.c. 4, § 7(26)(d); see also Envtl, Protection Agency v. Mink, 410 U.S. 73, 89 (1973) (purely factual matters used in the development of government policy are subject to disclosure).

Subsequent to the opening of this appeal, I learned that on September 18, 2019, the Division provided a supplemental response pertaining to this request. In light of the Division’s supplemental response, I will consider this appeal closed. Mr. Veloso may appeal the substantive nature of the Division’s response within ninety calendar days. See 950 C.M.R. 32.08(1). )

Rebecca S. Murray fbteca. Muna.

Supervisor of Recor ds

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cc: Anthony Veloso