New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on May 7, 2001, representing the position of the New York Sate Insurance Department.

RE: Discovery of Insurer Documents In Possession of Insurer

Question Presented:

Are there any provisions in the New York Insurance Law that may be asserted by an insurer to exempt such insurer from disclosing documents in its possession in response to a discovery request in pending litigation?

Conclusion:

The Insurance Law does not specifically prohibit an insurer from disclosing documents in its possession in response to a discovery request. The Insurance Law, generally, addresses only situations in which the Department (and in some instances, other agencies) may not disclose documents in the Department’s (or other agencies’) possession. These statutes may or may not be sufficient to constitute a statutory privilege so as to exempt an insurer from complying with a discovery request. Certain of the statutes make clear that a statutory privilege for an exemption from disclosing discovery-requested documents does not apply to the agency in possession of such documents.

Facts:

A request for an opinion was received by the Department that was based on the following scenario: the Insurance Department requests an insurer to provide information that the insurer considers confidential. The insurer provides the Department with a document that the insurer created solely to comply with the Department’s request. Thereafter, the insurer becomes involved in litigation and a third party makes a discovery request for such document. The Department was asked whether the Insurance Law provides a statutory privilege to the insurer that would serve to exempt such insurer from complying with the discovery request.

Analysis:

There are no provisions in the New York Insurance Law, or in the regulations promulgated thereunder, which prohibit an insurer from disclosing documents in the insurer’s possession in response to a discovery request. The Insurance Law does set forth provisions that prohibit the Department (and in some instances, other agencies) from disclosing documents in the Department’s (or other agencies’) possession. The following is representative, but not an exhaustive list, of such provisions:

N.Y. Ins. Law § 311 (McKinney 2000): withholding of § 310 reports on examination.

N.Y. Ins. Law § 315 (McKinney 2000): reporting of professional malpractice or misconduct.

N.Y. Ins. Law § 319 (McKinney 2000): information resulting from insurers’ investigation of fires.

N.Y. Ins. Law § 1505 (McKinney 2000): holding company reports and other information.

N.Y. Ins. Law § 1603 (McKinney 2000): acquisition of majority of corporation’s outstanding common shares.

N.Y. Ins. Law § 4217 (McKinney 2000): non-public information regarding the valuation of insurance policies and contracts.

N.Y. Ins. Law § 4406 (McKinney 2000): reports, reports on examination, and investigations of an employee welfare fund.

N.Y. Ins. Law § 7312 (McKinney 2000): consultant’s and actuary’s reports regarding the reorganization of domestic mutual life insurer into a domestic stock life insurer.

It should also be noted that any judicial discovery request would be governed by the applicable rules of the federal court or state court in which the action was commenced. Whether or not the court would conclude that what the Department itself may properly invoke as a statutory privilege under the Insurance Law may properly be asserted by an insurer would have to be resolved in accordance with the discovery rules of the particular court involved and the specific facts of the case.

For further information you may contact Attorney Sally Geisel at the New York City Office.