N.Y. Comp. Codes R. & Regs. tit. 11 § 20.4

Current through Register Vol. 46, No. 24, June 12, 2024

Section 20.4 - Fiduciary responsibility of insurance agents, title insurance agents, and insurance brokers; minimum recordkeeping requirements

(a)

(1) This section is issued for the purpose of interpreting, and facilitating compliance with, Insurance Law section 2120(a) and (c).

(2) As used in this section, licensee means an insurance agent, a title insurance agent, or an insurance broker.

(b)

(1) Every licensee required to maintain a premium account shall maintain books, records and accounts in connection with the licensee's business to record:

(i) all funds received or collected in a fiduciary capacity for insurers or members of the public;

(ii) all disbursements out of funds held in a fiduciary capacity; and

(iii) all other funds received, collected, and disbursed in connection with the business.

(2) At a minimum, to comply with paragraph (1) of this subdivision, every licensee required to maintain a premium account shall maintain:

(i) a book or other permanent account record, stating the name and address of the licensee, showing all receipts, collections, and disbursements of funds, distinguishing therein between:

(a) the receipt of funds held in a fiduciary capacity for insurers and members of the public and disbursements out of such funds, and the record shall have the following minimum detail:

(1) for receipts:

(i) amount of funds received or collected;

(ii) date received;

(iii) name of insured;

(iv) insurer's name and policy binder number; and

(v) description of the risk (i.e., vehicle type, property description, and liability exposure); and

(2) for disbursements:

(i) amount of funds disbursed;

(ii) check number or, if a check is not used, other information sufficient to identify the disbursement;

(iii) name of insured;

(iv) insurer's name and policy binder number; and

(v) description of the risk (i.e., vehicle type, property description, and liability exposure); and

(b) funds received and collected and funds disbursed by the licensee for general operations, services, sales and other insurance;

(ii) records in such form to show all billings, correspondence or other transmittal related to premiums, return premiums, commissions and fees charged to members of the public; and

(iii) bank statements or passbooks, cashed checks and detailed deposit slips for both trust and general accounts.

(3) Every licensee required to maintain a premium account shall maintain accounting records in a manner that clearly reflects the nature and purpose of the transaction and accurately and fairly states or measures or properly accounts for the funds or valuable consideration exchanged in the transaction.

(4) Where this section requires a record to be kept by a licensee, it may be kept in a bound or looseleaf book, or by means of a mechanical, electronic or other device.

(5) The licensee shall:

(i) take adequate precautions for safeguarding the records and for protection against the falsification of the information recorded; and

(ii) provide means for making the information available in an accurate and useable form for inspection and copying to any person lawfully entitled to examine the record.

(c)

(1) The information that is made available under subparagraph (b)(5)(ii) of this section is admissible in evidence as prima facie proof of all facts stated therein.

(2) Where this section requires a record to be kept by a licensee, it shall be preserved for at least the three-year period preceding the most recent fiscal year-end of the licensee unless a longer period is required by statute or other regulation.

(3) The records described in subdivision (b) of this section shall be maintained in this State at the licensee's principal place of business or stored in such a manner as to allow reasonable accessibility and made available upon request by the department; or if a non-resident licensee, shall be made available in this State within ten days upon request.

(4) The records described in subdivision (b) of this section shall be in addition to any requirements already specified in the Insurance Law and regulations promulgated thereunder.

(5) The record described by subclause (b)(2)(i)(a)(1) of this section, the receipt along with a copy of the application, shall be delivered to the insured at the time of its making.

(d) If any provision of this section or the application thereof to any person or circumstances is held unauthorized by law, then the remainder of the section and the application of such provision to other persons or circumstances shall not be affected thereby.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 20.4

Amended New York State Register October 18, 2017/Volume XXXIX, Issue 42, eff. 10/18/2017