The Office of General Counsel issued the following opinion on May 23, 2007, representing the position of the New York State Insurance Department.
Record Retention by insurance agent
What requirements does the New York Insurance Law and the regulations promulgated thereunder impose upon a licensed insurance agent with respect to retaining insurance records?
As set forth below, there are numerous requirements under governing NY law for record retention by an insurance agent.
The agency is licensed to do a life and health insurance business. The inquirer asks about the record retention requirements imposed by the New York Insurance Law and the regulations promulgated thereunder.
There are a number of record retention requirements applicable to a licensed insurance agent. An insurer may require its agent to be subject to the same record retention requirements as the insurer itself. Section 243.2(d) of N.Y. Comp. Codes R. & Regs. tit. 11, Pt. 243 (2003) (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.
Section 243.2(b) sets forth specific record retention requirements. It imposes upon an agent a minimum six calendar year period to retain each insurance contract or policy; each insurance application where no policy or contract was issued; every claim file; any complaint record involving a charge of unfair trade practices; and any record “from its creation or until after the filing of a report on examination or the conclusion of an investigation in which the report was subject to review.”
An insurance agent may destroy original paper documents that were transferred to a “durable medium,” as such term is defined in the regulation, pursuant to § 243.3(a)(3). That regulatory provision states:
Upon transfer of an original record to a durable medium, the insurer may destroy the original record after assuring that all information contained in the original record, including signatures, handwritten notations, or pictures, is contained in the durable medium.
In addition, N. Y. Comp. Codes R. & Regs. tit. 11, § 20.4(b) and (c) (2001) (Regulation 29) requires that every insurance agent or broker using a premium account must maintain a book or other permanent account record that shows all receipts and disbursement of money, and sets forth the details as described therein. Records required by Regulation 29 must “be preserved for at least the three-year period preceding the most recent fiscal year-end of the licensee.” See 11 NYCRR § 20.4(c)(2).
N.Y. Ins. Law § 2119(a) (McKinney 2006) requires that an insurance agent retain every consulting fee agreement for at least three years. Section 2119(a)(2) states: “A copy of every such memorandum or contract shall be retained by the licensee for not less than three years after such services have been fully performed.”
Furthermore, even where there is no regulation or statute requiring an agent to maintain insurance records, the Department recommends that licensees retain the records for a period of time sufficient to satisfy applicable statutes of limitations and, where an action or claim is pending, for such period of time until the matter is resolved.
For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.