The Office of General Counsel issued the following informal opinion on June 11, 2002, representing the position of the New York State Insurance Department.
Re: Interest on Premium Trust Funds Received by an Insurance Broker
What New York State law regulates how an insurance broker can invest premiums received from its insureds, before paying the insurer the net premium?
N.Y. Ins. Law § 2120(a) & (c) (McKinney 2000) and N.Y. Comp. Codes R. & Regs. tit. 11, § 20.3 (1991) (Regulation 29) address the fiduciary responsibilities of insurance brokers. These provisions have been construed by Office of General Counsel opinions to address various issues associated with the investment by an insurance broker of premiums received from insureds that are deposited in premium accounts.
The inquirer did not provide any facts.
The inquirer may examine Office of General Counsel opinions concerning N.Y. Ins. Law § 2120 (McKinney 2000) and N.Y. Comp. Codes R. & Regs. tit. 11, § 20.3 (1991) (Regulation 29) at the Insurance Department after making a Freedom of Information Law request addressed to:
New York State Insurance Department
Office of General Counsel - 4th Floor
Attention: Records Access Officer
25 Beaver Street
New York, NY 10004-2319
If, after examining the opinions, the inquirer has any specific question(s), he may send a written inquiry, setting forth the relevant facts, to the attention of Deputy Superintendent and General Counsel Audrey Samers.
For further information you may contact Senior Attorney Robert Freedman at the New York City Office.