The Office of General Counsel issued the following informal opinion on March 21, 2001, representing the position of the New York State Insurance Department.

Re: Interpretation of Regulation 169

Questions Presented:

1. May the privacy notices given by an insurer to a consumer or customer relieve the insurance broker from the obligation to give the privacy notices?

2. Is there a contradiction between example (c) and example (e) of "no continuing relationship"?


1. An insurance broker may rely on the privacy notice of the insurer only if the broker has binding authority and it does not disclose any nonpublic personal information to any person other than the insurer.

2. Examples (c) and (e) are not contradictory, but rather represent possible different circumstances.


No facts are specified.


Section 420.3(p)(1) of Regulation 169 defines licensee and includes insurance brokers. Paragraph (2) states:

(2)(i) A licensee is not subject to the notice and opt out requirements for nonpublic personal financial information set forth in sections 420.4 through 420.9 of this Part if the licensee is an employee, agent, sublicensee, or other representative of another licensee ("the principal") and:

(a) The principal otherwise complies with, and provides the notices required by, the provisions of this Part; and

(b) The licensee does not disclose any nonpublic personal information of a consumer or customer to any person other than the principal from or through which such consumer or customer seeks to obtain or has obtained a product or service, or its affiliates in a manner permitted by this Part. (N.Y. Comp. Codes R. & Regs. tit. 11 § 420.3(p)(2)(i) (2000)).

Generally speaking, an insurance broker is a representative of the insured, not the insurer. Hence, an insurance broker will usually not fall within the exception. However, where the insurance broker has binding authority for an insurer, it is a representative of the insurer, and hence no separate notice is required, provided that the other conditions specified in paragraph (2) are satisfied. (N.Y. Comp. Codes R. & Regs. tit. 11 § 420.3(p)(2)(ii) (2000)).

N.Y. Comp. Codes R. & Regs. tit. 11 § 420.3(i) (2000) requires a "continuing relationship" as part of the definition of "customer relationship", then provides examples of what is and what is not a continuing relationship. The following are two examples of what is not a continuing relationship:

(c) The individual is no longer a current policyholder of an insurance product or no longer obtains insurance services with or through the licensee;

(e) The customer’s policy is lapsed, expired, or otherwise inactive or dormant under the licensee’s business practices, and the licensee has not communicated with the customer about the relationship for a period of 12 consecutive months, other than annual privacy notices, material required by law or regulation, communication at the direction of a state or federal authority, or promotional materials; (clauses (c) and (e) of N.Y. Comp. Codes R. & Regs. tit. 11 § 420.3(i)(2)(ii)(d) (2000).

While there is some overlap between the two clauses (and hence a continuing relationship would not exist under either of the clauses), there are certain circumstances in which only one of the provisions would apply. For example, unlike life insurance policies, property/casualty policies do not lapse and certain statutory provisions often preclude them from expiring without a nonrenewal or cancellation notice. In addition, a fully paid-up life insurance policy would be considered to be inactive or dormant, but the consumer remains a current policyholder.

For further information, you may contact Supervising Attorney Paul A. Zuckerman at the New York City Office.