New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter II - Agents, Brokers And Adjusters
Part 20 - Brokers, agents and certain other licensees - general
Section 20.4 - Fiduciary responsibility of insurance agents, title insurance agents, and insurance brokers; minimum recordkeeping requirements
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 20.4
Current through Register Vol. 46, No. 39, September 25, 2024
(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.
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