The Office of General Counsel issued the following opinion on September 8, 2003 representing the position of the New York State Insurance Department.
Re: Record Retention Documents Accompanying Applications
Are informational documents that accompany an application for insurance considered part of the application for purposes of the record retention requirements of N.Y. Comp. Codes Rules & Regs., tit. 11, § 243.2 (1996) ("Regulation 152")?
Yes, to the extent that such accompanying documents constitute information that would be necessary for reconstructing the solicitation, rating, or underwriting of the policy, such materials would be subject to record retention requirements.
The inquirer states that in the case of large commercial insurance accounts, the initial application may often be accompanied by additional documents such as specifications, prior loss information, and other data. The inquirer questions whether such documentation is considered to constitute a part of the application for record retention purposes.
N.Y. Comp. Codes R. & Regs. tit. 11, § 243.2 (1996) (Records Required for Examination Purposes and Retention Period) provides in part as follows:
(a) [E]very insurer shall maintain its claims, rating, underwriting, marketing, complaint, financial, and producer licensing records, and such other records subject to examination by the superintendent, in accordance with the provisions of this Part.
(b) Except as otherwise required by law or regulation, an insurer shall maintain:
(1) A policy record for each insurance contract or policy for six calendar years after the date the policy is no longer in force or until after the filing of the report on examination in which the record was subject to review, whichever is longer. Policy records need not be segregated from the policy records of other states as long as they are maintained in accordance with the provisions of this Part. A separate copy need not be maintained in an individual policy record, provided that any data relating to a specific contract or policy can be retrieved pursuant to Section 243.3(a) of this Part. A policy record shall include:
(i) The policy term, basis for rating, and return premium amounts, if any;
(ii) The application, including any application form or enrollment form for coverage under any insurance contract or policy;
(iii) The contract or policy forms issued including the declaration pages, endorsements, riders, and termination notices of the contract or policy. Binders shall be retained if a contract or policy was not issued; and
(iv) Other information necessary for reconstructing the solicitation, rating, and underwriting of the contract or policy. (emphasis supplied)
N.Y. Comp. Codes R. & Regs. tit. 11 § 243.2(1996).
The language of the Regulation, at § 243.2(b)(1)(ii) requires that the application itself be kept as part of the required "policy record" without mentioning any ancillary materials. The Regulation further provides, however, at § 243.2(b)(1)(iv), for the retention of additional information necessary for reconstructing the solicitation, rating, and underwriting of the contract or policy as part of the policy record. Accordingly, to the extent that the additional materials submitted with an application do contain such necessary information, the materials should be retained as part of the policy record. Please refer to the other provisions of Regulation 152 for additional information concerning the Standards of Records Retention By Insurance Companies.
For further information one may contact Supervising Attorney Michael Campanelli at the New York City Office.