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

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following opinion on January 4, 2006, representing the position of the New York State Insurance Department.

RE: Broker Retention of Records

Questions Presented:

1) How long must an insurance broker retain a copy of a life and disability insurance policy that has been replaced pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, Part 51 (Regulation 60)?

2) How long must an insurance broker retain a copy of a completed application for insurance, and correspondence related thereto, when the application does not result in the placement of coverage?

Conclusions:

1) An insurance broker is not ordinarily required to retain copies of insurance policies, whether or not they have been replaced, unless authorized so to act on the insurer’s behalf.

2) An insurance broker is not ordinarily required to retain copies of completed applications or related correspondence, unless authorized so to act on the insurer’s behalf.

Facts:

The inquiries were general in nature and no specific facts were presented.

Analysis:

Neither the New York Insurance Law nor the regulations promulgated thereunder require an insurance broker to retain copies of insurance policies or applications and related correspondence. The only record retention requirements made specifically applicable to insurance brokers are contained in N.Y. Ins. Law § 2119 (McKinney Supp. 2006) regarding memorandum of fees, and N.Y. Comp. Codes R. & Regs. tit. 11, § 20.4 (Regulation 29) regarding the maintenance of books and records of a premium account.

However, N.Y. Comp. Codes R. & Regs. tit. 11, § 243.2(d) (Regulation 152) states:

An insurer shall require, by contract or other means, that a person authorized to act on its behalf in connection with the doing of an insurance business, including a managing general agent, an administrator, or other person or entity, shall comply with the provisions of this Part in maintaining records that the insurer would otherwise be required to maintain. Notwithstanding the above, the insurer shall be responsible if the person or entity fails to maintain the records in the required manner.

Although an insurance broker generally represents the insured, there may be circumstances under which an insurance broker is authorized to maintain customer records on the insurer’s behalf. The retention requirements for insurance policies and applications of insurance are contained in N.Y. Comp. Codes R. & Regs. tit. 11, § 243.2(b) (Regulation 152), which states:

(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.

(2) An application where no policy or contract was issued for six calendar years or until after the filing of the report on examination in which the record was subject to review, whichever is longer.

For further information you may contact Associate Attorney Sally Geisel at the New York City Office.