The office of General Counsel issued the following informal opinion on June 12, 2001, representing the position of the New York State Insurance Department.Re: Information about possible violations of the Insurance Department Regulations 64, 68 and 78 provided by an insurance company employee who wishes to remain anonymous.
1. Would the Department reveal the name of an insurance company employee who provides information on possible violations of Department Regulations 64, 68 and 78 by an insurance company which results in the subsequent levying by the Department of a fine against the insurance company?
2. Would the Department offer such an insurance company employee a "finders fee" for the information provided?
1. The Department does not usually reveal the name of an insurance company employee who provides information about the insurance company which leads to the findings of violations of Department Regulations and/or the Insurance Laws. However, the Department cannot guarantee that such information would not be released. The ultimate determination would depend on the particular facts and circumstances of each case and the applicable law.
2. No. The Department does not provide any compensation to such an employee.
No specific facts were provided. The inquirer requested a response to the questions presented.
The Department routinely conducts investigations of its licensees (insurance companies, insurance agents and, insurance brokers) based on information provided by individuals. The information provided by such individuals and the information garnered pursuant to such an investigation would all become part of the Departments records. Under the New York Freedom of Information Law (commonly referred to as FOIL), all information that is stored, filed and kept in some physical form by a government agency constitutes "records". Accordingly, pursuant to the provisions of FOIL, specifically, N.Y.Pub. Off. Law §87(2) (McKinney 1988 & Supp 2000), state agencies are required to make all records available to the public except for records that are considered exempt under the statute.
One of the exemptions contained in the N.Y.Pub. Off. Law §87(2) (McKinney 1988 & Supp 2000), is for records which contain personal information which if released would constitute an unwarranted invasion of personal privacy. In conducting investigations, the Department practice is not to release any personal information in its "records" that would enable the licensee to identify the individual (unless of course the individual wishes to be identified).
The Departments general practice of not releasing personal identifying information on individuals during an investigation is based on the N.Y.Pub. Off. Law §87(2)(b) (McKinney 1988 & Supp. 2000) which provides in relevant part:
(2) Each agency shall, in accordance with its published rules, make available for public inspection and copying all records, except that such agency may deny access to records or portion therefore that: ...
(b) if disclosed would constitute an unwarranted invasion of personal privacy under the provisions of subdivision two section eighty-nine of this article.
However, if a specific request is made for the name of the individual who provided the Department with the information, the Department cannot guarantee that such information would not be released because the ultimate determination would rest on the particular facts and circumstances of each case and the applicable law.
Moreover, should the Department make a determination, based on the specific situation, not to provide personal identifying information, such determination may be appealed. In the example provided, if the insurance company successfully appeals the Departments decision not to provide identifying information about the informant, the Department may have to provide the information, which could lead to the employees identity being revealed. The Department cannot predicate the outcome of appeals.
Also, if the investigation of the insurance company leads to an administrative hearing or a court trial, the identity of the informant could be revealed. There may be a court ordered subpoena of the Department records and/or the informant may be called as a Department witness in which case the insurance company would have the right to cross-examine the informant. The New York courts have held in many instances that all parties in a trial have a right to cross-examine all witnesses. See, Lamborn & Company v. Czarnikow-Rionda Company, 227 A.D. 72, 237 N.Y.S. 69, 1st Dept. 1929. "[w]e are of the opinion that the interest of justice will best be served and its administration facilitated by permitting to all parties to the action the right of cross examination of any witness called." and, Metlin v. Globe & Republic Insurance Company of America, 261 A.D. 1048, 26 N.Y.S.2d 513, 4th Dept. 1941. "[s]worn testimony was admissible and material to the issues on trial and it was reversible error to deprive the said appellant of its right to cross examine Stein relative thereto." emphasis added.
The Department does not provide any compensation to individuals (whether or not they are insurance company employees) who provide information about possible violations by Department licensees of Department Regulations and/or the Insurance Law. However, if the investigation results in a trial and the informant is called as a witness, the Department may reimburse expenses such as transportation cost.
For further information you may contact Senior Attorney Adiza Mohammed at the New York City Office.