The Office of General Counsel issued the following informal opinion on December 12, 2000, representing the position of the New York State Insurance Department.
RE: Insurers Record Retention Requirements
Question Presented:
Is there a statute or regulation that requires an insurer to maintain its original paper file (i.e. claim or application file) for a specific period of time before it can transfer it to an electronic format (i.e. microfiche) and destroy the paper file?
Conclusion:
No. Insurance Dept. Regulation 152, N.Y. Comp. R. & Regs. tit 11, Part 243 (1996) entitled "Standards of Records Retention by Insurance Companies" provides in Section 243.3 that: (1) records may be maintained in any durable medium; and (2) the insurer may destroy the original record upon transfer of an original record to a durable medium.
Analysis:
Insurance Dept. Regulation 152, N.Y. Comp. R. & Regs tit 11, Sections 243.1(c) and 243.3(a)(1) and (3) (1996) provide:
§ 243.1 Definitions:
For the purposes of this Part, the following terms shall apply:
Durable medium means a medium for maintaining a record where the properties of such medium provide reasonable assurances against tampering with the information contained in the original and degradation of any reproduction generated, and where the reproduction is an exact copy of the original. The medium may include paper; facsimile; or photograph, micrographic, magnetic, optical, mechanical or electronic media.
§ 243.3 Standards for maintenance and reproduction of records.
(a)(1) Records and indices of records required to be maintained under this Part may be maintained in any durable medium.
(3) Upon transfer of an original record to a durable medium, the insurer may destroy the original record after assuring that all information contained in the original record, including signatures, handwritten notations, or pictures, is contained in the durable medium.
Accordingly, pursuant to the above-cited regulation, an insurer may maintain records such as claims and applications in microfiche, which is included in the definition of "Durable Medium", and may destroy the original paper record after assuring that all information contained in the original record is contained in the microfiche.
For additional information, see also Ins. Dept. Circular Letter No. 33 (1999), the subject matter of which is "The Use of Electronic Signatures and Records in Connection with the Marketing and Sale of Insurance by Means of Electronic Commerce".
For further information you may contact Associate Counsel Sidney Glaser at the New York City Office.