New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT

25 BEAVER STREET
NEW YORK, NEW YORK 10004

Eliot Spitzer
Governor
Eric R. Dinallo
Acting Superintendent

The Office of General Counsel issued the following informal opinion on March 9, 2007, representing the position of the New York State Insurance Department.

Re: Release of Loss Reserves on Open Claims

Question Presented:

Is an insurer required to reveal its loss reserve information for open commercial lines claims to an insured or an insured’s authorized insurance agent or broker?

Conclusion:

No. An insurer is not required to reveal its loss reserve information for open commercial lines claims to an insured or an insured’s authorized insurance agent or broker.

Facts:

The inquirer reports that an insurer is refusing to reveal its loss reserves information for open commercial lines claims, and in so refusing is relying upon an opinion dated September 23, 2005 issued by the Insurance Department’s Office of General Counsel. The insurer’s loss history reports provided to the insured set forth the date of loss, the name of the claimant, and the amounts paid to date, but not information about the expense reserves and loss reserves. The inquirer states that as a result of the insurer’s refusal to reveal its loss reserves information, the inquirer as a broker is unable to remarket the insured’s account to another insurer.

Analysis:

N.Y. Ins. Law § 3426(g) (McKinney Supp. 2007) governs cancellation and renewal of commercial lines insurance policies by an authorized insurer, and specifically delineates what loss information must be provided by the insurer to an insured and such insured’s authorized agent or broker. Insurance Law § 3426(g) specifically states:

(g)(1) Every notice mailed or delivered by an insurer pursuant to this section shall advise the first-named insured and such insured's authorized agent or broker of the availability of loss information consistent with paragraph two of this subsection.

(2) Upon written request by the first-named insured or such insured's authorized agent or broker, the insurer shall mail or deliver the following loss information covering a period of years specified by the superintendent by regulation or the period of time coverage has been provided by the insurer, whichever is less, within ten days of such request:

(A) Information on closed claims, including date and description of occurrence, and any payments;

(B) Information on open claims, including date and description of occurrence, and amounts of any payments; and

(C) Information on notice of any occurrences, including date and description of occurrence.

(3) The insurer may charge a reasonable fee as determined by the superintendent only for such information provided upon request, but not for such information (even in the absence of a request therefor) required to be provided.

(4) For purposes of this subsection, the term first-named insured shall include an individual certificate holder under a property/casualty group policy with respect to such certificate holder's loss information. (Emphasis added.)

Thus, Insurance Law § 3426(g) provides that upon the written request of the insured or the insured’s authorized insurance agent or broker, the insurer must within ten days mail or deliver information about open claims, including a date and description of an occurrence, and the amounts of any payments, for a period of years specified by the superintendent or the period of time that the insurer has provided coverage, whichever is less. While the statute clearly requires an insurer to provide the insured and the insured’s authorized agent or broker with a date and description of an occurrence, and the amounts of any payments, the statute does not require an insurer to provide loss reserve information pertaining to the open claims of the insured. See OGC opinion letter dated March 11, 2005.

In addition, this office notes that the OGC opinion letter dated September 23, 2005 upon which the insurer purportedly relies in refusing to reveal its loss reserves on open claims answers only the question of whether an insured or the insured’s authorized insurance agent or broker may request loss information from its insurer at any time, or whether it may request loss information only after the insurer gives the insured or the insured’s authorized insurance agent or broker notice of the right to request such loss information. That opinion does not, however, answer the question the inquirer currently poses.

Lastly, this office notes that if the inquirer continues to be unable to remarket the insured’s account to another insurer, the insured could file a complaint with the Department’s Consumer Services Bureau, which may be able to help procure the loss reserve information the inquirer seeks.

For further information you may contact Associate Attorney Pascale Jean-Baptiste at the New York City Office.