Anthony Veloso v. Massachusetts Division of Insurance (SPR 20191960)

The Commonwealth of Massachusetts William Francis Galvin, Secretary of the Commonwealth Public Records Division Rebecca S. Murray Supervisor of Records October 9, 2019 SPR19/1960 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/DOI) to a.request for public records. G. L. c. 66, § 1O A; see also 950 C.M.R. 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 appeals This request was the subject of previous appeals. See SPR19/1635 Determination of the Supervisor of Records (August 23, 2019) and SPR19/1836 Determination of the Supervisor of Records (September 23, 2019). I closed SPR19/1836 after I learned that the Division provided Mr. Veloso with a supplemental response on September 18, 2019. Unsatisfied with the Division's response, Mr. Veloso petitioned this office and this appeal, SPR19/1960, was opened as a result. While this appeal was pending, the Division provided a supplemental response dated October 9, 2019. 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, § lOA(d); 950 C.M.R. 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 Commonwealth, unless falling within a statutory exemption. G. L. c. 4, § 7(26). One Ashbmion 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. SPR19/1960 Page 2 October 9, 2019 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, § lO(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, § lO(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 September 181 response " In its September 18, 2019 response, the Pivision, citing Babets, states that "[r]ate increase filings are the initial requests by insurance carriers to the Division to review, deliberate and develop a policy position. The rate increase filing is not made by a third paiiy providing factual data for the agency to review. It is a starting point by a licensee requesting a government benefit, and does not contain all of the elements required for the full review. The initial rate increase request is incomplete and the [Division] requires carriers to provide additional information during the deliberative process [in order] to determine if the filing meets the required statutory and regulatory standards while maintaining stability. in the insurance market." The Division asserts that "[p] roviding public access to the initial rate increase request will not provide the public with useful information, but instead may cause insureds and their financial advisors to make decisions based on a rate that will never go into effect. This could have disastrous effects on the finances of consumers, particularly seniors on fixed incomes as they are the holders of most long-term care insurance policies ...." The Division contends that it has the" ... responsibility to ensure that consumers have accurate data upon which to make personal financial decisions. The initial request for a rate increase is not an accurate representation of the final increase allowed; and the Division would be shirking its legal responsibility as a consumer protection agency by releasing this prior to a final rate increase decision." The Division indicates that because of the challenge " ... to balance the escalating cost to the consumer of long-term care insurance with the solvency of the company - rate increase requests present a real and looming threat of litigation for the Division." Referencing recent litigation it was involved in with Genworth, the Division indicates that " ... based on information currently available to [it], the Division reasonably anticipates adversarial proceedings (administrative hearings and/or litigation) about pending long-term care insurance rate increase requests. The disclosure of such pending filings would put the Division at a disadvantage in those proceedings."

Mindy A. Merow Rubin, Esq. SPR19/1960 Page 3 October 9, 2019 The Division's October 91 supplemental response " In its October 9, 2019 supplemental response, the Division states that it has the statutory . authority to review a request for a rate increase per G. L. c. 175, § 108. The Division explains that it is required" ... to evaluate the rate filing and make a policy decision relative to the increase requested, including whether the benefits provided under the insurance contract are 'unreasonable in relation to the premium charged' or whether the insurance contract contains any provision which is 'unjust, unfair, inequitable, misleading or deceptive."' The Division asserts that "[t]his deliberative process is not simply a review of 'facts' that may be contained within a filing for a proposed rate increase." The Division explains that "[w]hile the policy development exemption does not apply to reasonably complete factual studies or rep01is, filings for proposed rate increases are not purely factual studies or reports." The Division indicates that" ... filings for proposed rate increases by DOI-licensed carriers are the initial step in the deliberative process, seeking action by the Division to review the submission, to request information to complete the submission and to develop a policy position." Citing General Electric Co., the Division states that"' [t]he purpose of exemption ( d) is to foster independent discussions between those responsible for governmental decision in order to secure the quality of the decision.' [Hence,] [r ]elease of documents reflecting the development of the policy position during the deliberative process undercuts those discussions and the ultimate decision. [General Electric Co. v. Dept. of Envtl. Protection, 439 Mass. 798, 807 (1999)]." The Division reiterates that" ... a rate filing is not simply a request for a new premium amount with reasons for the new number. Among other things, the rate filing must at least explain formulas used to derive rates, expected claim costs, assumptions regarding mortality/morbidity/lapse rates and anticipated administrative expenses associated with the policy. Anything that is 'expected' or 'assumed' or 'anticipated' is not factual." The Division explains that " ... through the deliberative process, as [it] moves toward a policy decision on each filing, rate filings are subject to change. The Division's review of each filing and ultimately a disposition reflects a policy decision as to what level of rate increase may or may not be appropriate for a specific company, product or group of consumers, evaluating the reasonableness of the request and making a judgment as to fairness, justice and equity, in accordance with the statutory standards for review." The Division contends that the "[r]ate filings are intended to and do elicit development of a policy relative to each proposed rate increase. Until there is a disposition relative to the rate increase request, the policy remains under development." The Division asse1is that contrary to Mr. Veloso's claim that" ... premature release of the filing with the proposed rate increase would assist consumers in making 'informed' decisions, the rate filing as submitted would be misleading to consumers." The Division explains that premature disclosure of records that relate to an ongoing deliberative process, would be detrimental not only to the process but would also have a negative effect on its development of a policy position, harm individual consumers and the Massachusetts insurance market, generally. The Division states that all documents would be available for public review upon conclusion of

Mindy A. Merow Rubin, Esq. SPR19/1960 Page 4 October 9, 2019 its deliberative process. 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. c. 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). Although the Division indicates that premature disclosure of the proposed rate increases filed by its licensed insurance carriers could taint its ongoing deliberative process, I find the Division has not met its burden to withhold records under Exemption (d). Particularly, the Division has not demonstrated that the records are "inter-agency or intra-agency memoranda or letters relating to policy positions being developed by the agency" as required by Exemption ( d). The Division has not demonstrated that the responsive records were only sent between governmental entities or consultants. See DOI v. Klamath Water Users Protective Ass'n, 532 U.S. 1, 4 (2001) (indicating that a requirement for Freedom oflnformation Act (FOIA) exemption 5 to apply is "its source must be a Government agency"); Cty. of Madison v. United States Dep't of Justice, 641 F.2d 1036, 1040 (1st Cir. 1981) (finding that documents from a private pa1iy are not "intra-agency" under FOIA exemption 5); SPR95/336 Determinations of the Supervisor of Records (August 14, 1995; August 31, 1995) (finding that Exemption ( d) does not protect materials submitted to an agency by third parties and only applies to governmental agencies or consultants). Also, the Division did not meet its burden of explaining with specificity how the records, in their entirety, are exempt from disclosure. See Reinstein v. Police Comm'r of Boston, 378 Mass. 281, 289-90 (1979) (the statutory exemptions are narrowly construed and are not blanket in nature). Any non-exempt, segregable portion of a public record is subject to mandatory disclosure. G. L. c. 66, § 1O (a). The Division must explain whether segregable p01iions can be provided.

Mindy A. Merow Rubin, Esq. SPR19/1960 Page 5 October 9, 2019 Conclusion Accordingly, the Division is ordered to provide Mr. Veloso with a response to the request, provided in a manner consistent with this order, the Public Records Law and its Regulations within ten business days. A copy of any such response must be provided to this office. It is preferable to send an electronic copy of this response to this office at pre@sec.state.ma. us. Sincerely, ~~ Rebecca S. Murray Supervisor of Records cc: Anthony Veloso