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

George E. Pataki
Governor

Howard Mills
Acting Superintendent

The Office of General Counsel issued the following opinion on February 18, 2005, representing the position of the New York State Insurance Department.

RE: Insurer Communicating Directly with Third-Party Claimant Represented by Counsel

Question Presented:

May an insurer interview and take statements directly from a third-party claimant represented by counsel without first obtaining the counsel’s consent to communicate directly with the claimant?

Conclusion:

No. It is wrongful for an insurer to interview and take statements directly from a third-party claimant represented by counsel without first obtaining the counsel’s consent to communicate directly with the claimant.

Facts:

The inquiry was general in nature and no specific facts were presented.

Analysis:

There is no New York Insurance Law or regulation that expressly prohibits an insurer from communicating directly with a claimant represented by counsel. However, the Department has responded to similar inquiries of this kind in the past, and it has determined that such communication is wrongful.1

The issue is addressed in Appleman, Insurance Law and Practice § 8648 (West Publishing Co. 1981). As discussed therein, a "statement of principles" was adopted in 1939 by a committee of insurance industry representatives and representatives of the American Bar Association, which committee was named the Conference Committee of Adjusters, later renamed the National Conference of Lawyers, Insurance Companies, and Adjusters.2 One of the declarations in the statement of principles is that an insurer may not deal directly with a claimant represented by an attorney without such attorney’s consent. The word "deal" is interpreted by the committee to mean to "negotiate," "settle," "do business with," and "negotiate for a settlement or a payment."

This principle is also in keeping with the American Bar Association’s Model Rules of Professional Conduct, Rule 4.2, and the New York State Bar Association’s Code of Professional Responsibility, Disciplinary Rule 7-104,

which provide that a lawyer may not communicate directly with a person known to be directly represented by counsel unless the lawyer obtains the counsel’s prior consent.3

Accordingly, a licensee of the Department, whether by the licensee’s attorney or non-lawyer representative, may not communicate directly with a claimant represented by counsel without counsel’s consent as there is a real or potential conflict of interest inherent in such unauthorized communications. A licensee who engages in such conduct may be found to have committed a "determined violation" pursuant to N.Y. Ins. Law § 2402(c) (McKinney Supp. 2005) as an unfair or deceptive act or practice.4

For further information you may contact Donald Carroll, Principal Attorney at the New York City Office.


1  OGC Op. 07/12/2001; OGC Op. 10/02/1996.

2   The statement of principles has been approved by the American Insurance Association, American Mutual Insurance Alliance, International Claim Association, National Association of Independent Insurance Adjusters, and the American Bar Association.

3  In New York, the Appellate Division of the Supreme Court in each judicial department (there are four such departments) is authorized to suspend from practice or remove from office any licensed attorney who commits, among other things, professional misconduct pursuant to N.Y. Jud. Law § 90(2) McKinney (2002).  Among the rules that have been promulgated in furtherance of N.Y. Jud. Law § 90(2) are N.Y. Codes Rules and Regs. tit. 22, § § 603.2, 691.2, 806.2, 1022.17, which include in the definition of professional misconduct a violation of the New York State Bar Association’s Code of Professional Responsibility.

4   Additionally, if the licensee is an insurance agent, insurance broker, reinsurance intermediary, insurance consultant or adjuster, the communications may be deemed an untrustworthy act and, therefore, a violation of N.Y. Ins. Law § 2110(b)(4) (McKinney 2005).  See OCG Opinions cited in footnote 1.