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

The Office of General issued the following informal opinion on August 31, 2001, representing the position of the New York State Insurance Department.

RE: Regulation 169; disclosure to lienholders, mortgagees, etc.

Questions Presented:

1. Is a licensee subject to the requirements of N.Y. Comp. Codes R. & Regs. tit. 11, § 420.0 – 420.24 (2001) where the licensee receives nonpublic personal financial information directly from a claimant and sends a solicitation letter to the claimant encouraging the claimant to use the licensee’s services in the future?

2. Pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 420.15 (a)(2)(iv)(2001), may a company disclose nonpublic personal financial information that may contain evidence of coverage or limits of liability, to mortgagees, lienholders, automobile dealers and rental agencies?

Conclusions:

1. No. Such activities do not constitute disclosure of nonpublic personal financial information that falls under N.Y. Comp. Codes R. & Regs. tit. 11, § 420.0 – 420.24 (2001).

2. Yes, provided that these mortgagees and lienholders are persons holding a legal or beneficial interest relating to the consumer. However, with respect to automobile dealers and rental agencies, the Department can not provide the inquirer with a definitive response based upon the limited facts provided.

Facts:

No specific fact pattern was provided. The inquiry is general in nature.

Analysis:

The inquirer asked whether a licensee is subject to the provisions of Regulation 169 where the licensee receives nonpublic personal financial information directly from a claimant and sends a solicitation letter to the claimant encouraging the claimant to use the licensee’s services in the future.

Pursuant to N.Y. Comp. Codes R. & Regs tit. 11, § 420.0 – 420.24 (2001) (Regulation 169), a licensee must comply with the notice and opt out requirements contained in Regulation 169 where it discloses a consumer’s nonpublic personal financial information to nonaffiliated third parties, unless one of the exceptions contained in the Regulation is applicable.

However, in the present case, the licensee is not disclosing the claimant’s nonpublic personal financial information to nonaffiliated third parties, but is using the nonpublic personal financial information for its own purposes. Accordingly, Regulation 169 does not apply to the present situation.

The inquirer also asked whether, pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 420.15 (a)(2)(iv)(2001), a company may disclose nonpublic personal financial information that may contain evidence of coverage or limits of liability, to mortgagees, lienholders, automobile dealers and rental agencies.

N.Y. Comp. Codes R. & Regs tit. 11, § 420.15 (a)(2001) provides, in pertinent part, as follows:

(a)The requirements for initial notice to consumers in section 420.4 (a)(2), and the opt out provisions in sections 420.7 and 420.10 of this part and their application to service providers and joint marketing in as described in section 420.13 of this part, do not apply when a licensee discloses nonpublic personal financial information: . . .

(2)(iv) To persons holding a legal or beneficial interest relating to the consumer . . .

Disclosure of nonpublic personal financial information that may contain evidence of coverage or limits of liability, to mortgagees and lienholders would be permitted under this exception, provided that they are persons holding a legal or beneficial interest relating to the consumer. However, with respect to automobile dealers and rental agencies, the Department can not provide the inquirer with a definitive response based upon the limited facts provided.

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