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The Office of General Counsel issued the following opinion on February 17, 2006, representing the position of the New York State Insurance Department.

Re: Electronic Verification of Insurance System

Question Presented:

May an insurance broker in New York require its subcontractors to submit verification of insurance coverage electronically in place of providing a paper document (such as a Certificate of Insurance)?


There is nothing in the New York Insurance Law or the State Technology Law that would prohibit an insurance broker in New York from requiring its subcontractors to submit verification of insurance coverage electronically in place of providing a paper document (such as a Certificate of Insurance)


An insurance broker in New York requires its subcontractors to carry insurance to protect the broker from losses arising from the subcontractors’ products or work. The broker requires the subcontractors to provide evidence of such coverage through an electronic verification process, which will cost $3.25 to use. The broker no longer accepts paper documents evidencing insurance coverage, such as Certificates of Insurance.


The New York Insurance Law does not impose any per se restrictions on the use of electronic insurance-verification systems. Such regulation thereof, if any, would fall under the jurisdiction of the Office for Technology (OFT), which is responsible for the oversight and interpretation of the New York State Technology Law and the Electronic Signatures and Records Act (ESRA).

New York State enacted ESRA as part of Chapter 4 of the Laws of 1999, which added the State Technology Law as new Chapter 57-A of the Consolidated Laws of New York. ESRA is currently codified as N.Y. State Tech. Law §§ 301 – 309 (McKinney 2005).

N.Y. State Tech. Law § 309 (McKinney Supp. 2005) states:

Nothing in this article shall require any entity or person to use an electronic record or an electronic signature unless otherwise provided by law.

We presented OFT with the facts provided and requested their interpretation of this statute. OFT advised that N.Y. State. Tech. Law § 309 does not prohibit private sector entities from contractually agreeing to transact all or part of their business exclusively through electronic methods. OFT cited N.Y. Comp. Codes R. & Regs. tit. 9, § 540.1(e) in support of their position, which states in part:

Neither ESRA, nor this Part, shall in whole, or in part, be construed to limit any legal rights or privileges, contractual or otherwise, that parties may have in the use of electronic signatures and records.

For further information you may contact Associate Attorney Sally Geisel at the New York City Office.

Department of Financial Services


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