STATE OF NEW YORK
25 BEAVER STREET
NEW YORK, NEW YORK 10004
|George E. Pataki
RE: Agent Record Retention
May an insurance agent convert paper records that contain original signatures into an electronic format and discard the originals?
An insurance agent may convert paper records that contain original signatures into an electronic format and discard the originals where the format used is a "durable medium" as defined in N.Y. Comp. Codes R. & Regs. tit. 11, § 243.1(c) (Regulation 152).
A representative of an insurance agent stated that the agent is scanning records that contain original signatures into a database and thereafter shredding the originals. It was additionally stated that such scanned copies are re-producible, including the signatures thereon. The inquirer questions whether the original signed records must be retained and for how long.
The only prescription for record retention by insurance agents is contained in N.Y. Ins. Law § 2119(a) (McKinney Supp. 2005) (consulting fees) and N.Y. Comp. Codes R. & Regs. tit. 11, § 20.4(b) & (c) (Regulation 29) (premium account records). The retention period for each is three years as specified in the statute and the regulation.
Although agents are not specifically authorized to convert such records into another medium by either statute or regulation, the Department permits conversion of such records into a "durable medium" as defined in N.Y. Comp. Codes R. & Regs. tit. 11, § 243.1(c) (Regulation 152)1 (maintenance of insurance company records) as it would have been permissible to have created such records originally in an electronic format, pursuant to the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C.A. §§ 7001-7031 (West Supp. 2002) and the New York Electronic Signatures and Records Act ("ESRA"), §§ 301 309 (McKinney Supp. 2005).2
In addition, an agent that maintains records on behalf of an insurer it represents must adhere to the record retention requirements contained in N.Y. Comp. Codes R. & Regs. tit. 11, Part 243 (Regulation 152).
For further information you may contact Associate Attorney Sally Geisel at the New York City Office.
1 N.Y. Comp. Codes R. & Regs. tit. 11, § 243.1(c) (Regulation 152) states: Durable Medium means a medium for maintaining a record where the properties of such medium provide reasonable assurances against tampering with the information contained in the original and degradation of any reproduction generated, and where the reproduction is an exact copy of the original. The medium may include paper; facsimile; or photographic, micrographic, magnetic, optical, mechanical or electronic media.
2 See Insurance Department Circular Letter No. 33 (1999), Supplement No. 1 to Circular Letter No. 33 (1999). There are also numerous Office of General Counsel opinions on the topic of electronic media and signatures, which are available on the Departments web site at www.ins.state.ny.us.