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 June 25, 2002, representing the position of the New York State Insurance Department.

Re: Document Retention by Insurance Brokerage

Question Presented:

Is there a requirement for an insurance broker to maintain certain records for a particular time period?

Conclusion:

There are several requirements for records retention by an active or former insurance broker.

Facts:

An insurance brokerage agency was sold to another brokerage in August 2000. The present concern is whether business records made prior to the sale must be maintained by the former brokerage and for how long.

Analysis:

N.Y. Ins. Law § 2119(a) and (c) require that insurance agents, brokers, and consultants retain any signed service or consulting fee agreement for three years.

N.Y. Comp. Codes R. & Regs. tit. 11, § 20.4(b) and (c) (2001) (Regulation 29, Third Amendment) require that every licensee using a premium account must maintain a book or other permanent account record showing all receipts and disbursement of money and containing the details as described therein. Records required by this Regulation must be preserved for at least the three-year period preceding the most recent fiscal year-end of the licensee.

N.Y. Comp. Codes R. & Regs. tit. 11, § 27.21 (1999) (Regulation 41) requires that excess line brokers retain copies of affidavits and complete records relating to excess line placements for at least five years after the policy’s expiration.

N.Y. Comp Codes R. & Regs. tit. 11, § 243.2 (1996) (Regulation 152) requires that an insurer or a person authorized to act on its behalf in doing an insurance business, such as an agent, managing general agent or independent adjuster (but not a broker, who acts on behalf of the insured), maintain records for at least six years after the date the policy is no longer in effect or the Department report on examination has been filed.

In addition, the Department recommends that brokers would be prudent to retain insurance records for a period of time sufficient to satisfy statutes of limitations and, where an action or claim is pending, for such period of time until the matter is resolved. In addition, if the licensee obligated itself by contract with its principal, the insurer or the insured, to retain insurance records for a period of time, then such obligation, if legally enforceable, must be satisfied.

The above opinion is informal and not binding on any court. For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.