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STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

David A. Paterson
Governor

Eric R. Dinallo
Superintendent

OGC Op. No. 08-09-05

The Office of General Counsel issued the following opinion on September 19, 2008, representing the position of the New York State Insurance Department.

Re: Record retention requirements for insurance policies

Question Presented:

What is the required record retention period for insurance policies, and how does it apply to original policies as well as their renewals?

Conclusion:

Regulation 152 applies to insurance policies, as well as to other documents that comprise the “policy record” pursuant to 11 NYCRR § 243.2(b)(1). Pursuant to 11 NYCRR § 243.2(b), an insurer must maintain a policy record for each insurance contract or policy for six years from the date the policy is no longer in force, or until after the filing of a report on examination, whichever is longer. A policy record includes the contract or policy forms, the application, the policy term, and basis for rating and return premium amounts, if any. Both the original policy that is issued and any subsequent renewals of the policy must be retained in the policy record for the retention period specified in Regulation 152.

2. Yes. 11 NYCRR §243.3 prescribes the standards for the maintenance and reproduction of policy records.

Facts:

The inquirer’s company, ABC Services (“ABC”), is trying to determine the record retention period applicable to commercial lines insurance policies, particularly with respect to original and renewal policies. The inquirer asks whether the policy record retention period commences from the date of the original policy, or the date of the latest renewal of the policy. The inquirer also asks, hypothetically, if a policy were issued in 1991 and subsequently renewed each year, whether the retention period commences with the 1991 original policy or the latest renewal policy.

Analysis:

As a preliminary matter, 11 NYCRR § 243.3, which sets forth the standards for maintenance and reproduction of records that must be maintained in accordance with Regulation 152, applies to insurance policies that are part of a policy record.

11 NYCRR § 243.2 is relevant to the inquiry. That provision governs the minimum retention period for records created by domestic and foreign authorized insurers, as defined in Section 243.1(a) of Regulation 152. 11 NYCRR 243.2 reads in pertinent part as follows:

(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.

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(8) Any other record for six calendar years from its creation or until after the filing of a report on examination or the conclusion of an investigation in which the record was subject to review.

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(f) Nothing in this Part shall prevent or restrict an insurer from maintaining records for a longer period. (Emphasis added.)

Pursuant to Section 243.2(b)(1)(iii), following the termination of the policy, an insurer is required to retain, as part of the policy record, the policy form, the declaration pages, endorsements, riders and termination notices. Thus, the insurer must retain the original policy, as well as each subsequent renewal policy, for the six-year retention period or until after a report on examination has been filed, whichever is longer. The retention period applies separately to the original policy as well as to each renewal.

Thus, in the hypothetical situation presented, where the original policy was issued in 1991 (prior to the 1996 effective date of Regulation 152)1 and subsequently renewed through 1997, any information in the policy record of the 1991 policy, which is pertinent to the 1997 renewal policy (and any other subsequent renewals), must be retained in accordance with Regulation 152 as part of that renewal’s policy record.

For further information you may contact Senior Attorney Camielle A. Campbell at the New York City office.

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1  Prior to the promulgation of Regulation 152, the Insurance Department’s Office of General Counsel (“OGC”) set forth various opinions regarding “informal” record retention guidelines that are substantively similar to those prescribed in Regulation 152. See OGC Opinion dated May 3, 1995.