OGC Opinion No. 07-12-01

The Office of General Counsel issued the following opinion on December 10, 2007, representing the position of the New York State Insurance Department

RE: Loss run requirements for workers’ compensation

Question Presented:

May an insurer limit the period of time covered in a loss run to those claims made during the period from the inception of a workers’ compensation insurance policy to three years after its expiration?

Conclusion:

Yes. An insurer may limit the period of time covered in a loss run to those claims made during the period from the inception of a workers’ compensation insurance policy to three years after its expiration. There is nothing in the Insurance Law that governs the period of time for which an insurer must provide workers’ compensation loss run information. However, the Department believes that, in order to maintain consistency with the requirements of N.Y. Comp. R. & Regs. tit. 11, § 243.2 (1996) (Reg. 152), it is reasonable for the insurer to provide loss run information concerning all claims arising during the policy period that are made within six years of policy inception.

Facts:

The inquirer is an insurance consultant whose client wants loss run data from its workers’ compensation insurer. The insurer will only provide data that is within three years of the policy expiration, and is denying access to data that is a few years beyond that period.

Analysis:

N.Y. Ins. Law § 3426(g)(2) (McKinney 2007) is relevant to the inquiry. That statute provides that loss information for commercial lines insurance must be provided to the insured covering a period of years specified by the Superintendent by regulation or the period of time coverage has been provided by the insurer. Insurance Law § 3426(g)(2) states:

In an August 16, 2005 opinion, the Insurance Department’s Office of General Counsel addressed the period of time to be covered in the loss information provided. See Opinion of General Counsel No. 05-08-12 (August 16, 2005).¹ The opinion stated that the Superintendent had not specified by regulation the period of time to be covered in the loss information provided. Id. Therefore, in the absence of a regulation, the insurer must provide loss information covering the period of time that coverage has been provided by the insurer. Id. However, Insurance Law § 3426(g)(2) does not require an insurer to provide loss information for periods of time beyond the record requirements established by N.Y. Comp. R. & Regs. tit. 11, Part 243 (1996) (Reg. 152).

11 NYCRR § 243.2 establishes what records insurers must maintain for examination purposes and the retention periods. For example, an insurer must retain a claim file for the longer of six calendar years after all elements of the claim are resolved and the file is closed, or until after the filing of the report on examination in which the claim file was subject to review. See 11 NYCRR § 243.2(b)(4).

However, Insurance Law § 3426(g)(2) does not apply to workers’ compensation policies, and 11 NYCRR § 243.2 does not apply to retention of loss run information for the insured. There is nothing in the Insurance Law that governs the period of time for which an insurer must provide loss run information. Nevertheless, the Department believes that, in order to maintain consistency with the requirements of 11 NYCRR § 243.2(b)(4), it is reasonable for the insurer to provide loss run information concerning all workers’ compensation claims arising during the policy period that are made within six years of policy inception.

For further information, you may contact Senior Attorney Elizabeth Barrett at the New York City office.

¹   This opinion stated that the time period within which an insurer must respond to an insured’s request for loss information is 20 days under Insurance Law § 3426(g)(2).  The period is now ten days, pursuant to a subsequent amendment to Insurance Law § 3426(g)(2).