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 July 2, 2001 representing the position of the New York State Insurance Department.

RE: Insurance Brokers and Regulation 169.

Question Presented:

Is an insurance broker relieved of its obligation to supply separate privacy notices where an insurer has provided such notices?

Conclusion:

Generally, an insurance broker is not relieved of its obligation to supply separate privacy notices unless the insurance broker is a representative of the insurer, the insurance broker does not disclose nonpublic personal information to any person other than the insurer and the insurer complies with the notice provisions of N.Y. Comp. Codes R. & Regs. tit. 11 §420 (2001).

Facts:

No specific facts were provided relative to the above question.

Analysis:

N.Y. Comp. Codes R. & Regs. tit. 11 §420.3 (p)(1)(2001) defines the term licensee and includes insurance brokers. Paragraph (2) provides as follows:

(2)(i) A licensee is not subject to the notice and opt out requirements for nonpublic personal financial information set forth in section 420.4 through 420.9 of this Part if the licensee is an employee, agent, sublicensee, or other representative of another licensee ("the principal") and:

(a)The principal otherwise complies with, and provides the notices required by, the provisions of this Part; and

(b)The licensee does not disclose any nonpublic personal information of a consumer or customer to any person other than the principal from or through which such consumer or customer seeks to obtain or has obtained a product or service, or its affiliates in a manner permitted by this Part.

(ii)Examples of employee, agent or other representative of a principal:

An insurance broker, public adjuster or other licensee who is employed by another insurance broker, public adjuster or other licensee . . .

(d) An insurance broker that has binding authority for an insurer .

Generally, an insurance broker acts on behalf of an insured. Thus, insurance brokers would not usually fall under this exception. In such cases, a separate notice must be provided by the July 1, 2001 compliance date. (N.Y. Comp. Codes R. & Regs. tit. 11 §420.24 (2001)). If the licensee is mailing its notices, they must be mailed by July 1, 2001.

However, where the insurance broker is a representative of the insurer, the broker does not disclose any nonpublic personal financial information other than to the insurer and the insurer complies with the notice provisions of the regulation, the insurance broker is relieved of any obligation to supply a separate privacy notice. (N.Y. Comp. Codes R. & Regs. tit. 11 §420.3 (p)(2) (2001)).

Examples of a representative of another licensee, as cited by the regulation, are an insurance broker that has binding authority for an insurer or an insurance broker who is employed by another insurance broker.

For further information, you may contact Attorney Pascale Joasil at the New York City office.