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 opinion on June 27, 2001 representing the position of the New York State Insurance Department.

RE: Insurance Quotations and N.Y. Comp. Codes R. & Regs. tit. 11 § 420.0- 420.24 (2001) (Reg. 169).

Question Presented:

1. May an insurance agent disclose a consumer’s nonpublic personal financial information to obtain a quotation without delivering the privacy notice?

2. May an insurance agent use an affiliated licensee’s privacy notice?

Conclusion:

1. Yes. N.Y. Comp. Codes R. & Regs. tit. 11 § 420.14(a)(5) (2001).

2. Yes, with respect to initial notices to consumers. See N.Y. Comp. Codes R. & Regs. tit. 11 § 420.4(b)(2) (2001).

Facts:

No facts were presented. The inquiry is general in nature.

Analysis:

Prior to the inception of insurance coverage, the individual is the agent’s consumer, as that term is defined in N.Y. Comp. Codes R. & Regs. tit. 11 § 420.3(e) (2001). Thus, if the agent is going to disclose nonpublic personal information about the consumer, it must provide the initial privacy notice in accordance with N.Y. Comp. Codes R. & Regs. tit. 11 § 420.4(a) (2001), unless one of the exceptions contained in N.Y. Comp. Codes R. & Regs. tit. 11 §§ 420.13, 420.14, or 420.15 (2001) applies.

N.Y. Comp. Codes R. & Regs. tit. 11 § 420.14(a)(5) provides:

Exceptions for processing transactions at consumer’s request. The requirements for initial notice to the consumer in section 420.4(a)(2) of this Part, and the opt out provisions in sections 420.7 and 420.10 of this Part and their application to service providers and joint marketing as described in section 420.13 of this Part, do not apply if the licensee discloses nonpublic personal financial information as necessary to effect, administer, or enforce a transaction that a consumer requests or authorizes, or in connection with:…

(5) The solicitation of insurance quotes on behalf of a consumer by an insurance agent or broker.

In accordance with the above provision, an agent, may disclose the consumer’s nonpublic personal financial information to solicit insurance quotes on behalf of the consumer without having to deliver an initial privacy notice.

In general the inquirer should note that an agent who meets the requirements contained in N.Y. Comp. Codes R. & Regs. tit. 11 § 420.3(p)(2)(i) (2001) is not subject to the notice and opt out requirements for nonpublic personal financial information set forth in N.Y. Comp. Codes R. & Regs. tit. 11 §§ 420.4 through 420.9.

The inquirer asked whether, if it is required to deliver privacy notices, it may use an affiliated company’s forms. N.Y. Comp. Codes R. & Regs. tit. 11 § 420.4(b)(2)) (2001) permits the use of an affiliated licensee’s forms in the following situation:

A licensee is not required to provide an initial notice to a consumer under subdivision (a)(2) of this section if:

A notice has been provided by an affiliated licensee, as long as the notice clearly identifies all licensees to whom

the notice applies and is accurate with respect to the licensee and the other institutions.

For further information, you may contact Supervising Attorney Joan Siegel at the New York City office.