Guidance to Insurance Companies and Fraternal Benefit Societies Regarding Delivery of Notices Pursuant to New 11 NYCRR §229.5(a) and 3 NYCRR §405.6(b)(3)

The Department of Financial Services (“Department”) is aware of property/casualty insurance companies, life insurance companies, and life fraternal benefits societies (collectively, “Insurers”) facing challenges complying with the notice obligations in new 11 NYCRR 229.5(a) and 3 NYCRR  405.6(b)(3) described below (“Notice Obligations”).

First, regarding obtaining consumers’ consent to electronic communications, please see the Department’s  “Current Guidance Regarding Electronic Signatures, Transactions, and Filings with DFS.”

Second, the Department is accommodating Insurers by reducing their burden to fulfill the Notice Obligations during the current state of emergency and accelerate dissemination of the information to holders of life insurance policies, annuity contracts, fraternal benefit society certificates, and certain kinds of property/casualty insurance policies (collectively, the “policyholders”). Specifically, for the duration of the current state of emergency, Insurers may comply with the Notice Obligations by emailing the notices to the consumers for which the Insurers have email addresses, regardless of whether the consumers have consented to receiving this notice via email. Model notices, designed for Insurers to use in meeting the Notice Obligations, can be found at the bottom of this page. For any policyholder for whom an Insurer does not have an email address or consent to electronic communications, the Insurer should mail or deliver through U.S. Postal mail or otherwise the notice to such policyholder as soon as reasonably practicable (taking into account the current state of emergency and appropriate health and safety concerns) to fulfill its Notice Obligations.

Insurers with websites should post the information on their websites as soon as possible. The Department also encourages supplemental dissemination of the content of the Notice Obligations by other means, including social media.

Finally, Insurers should maintain records of their communications with consumers, electronic or otherwise, used to satisfy the Notice Obligations for a period of time sufficient to satisfy the recordkeeping requirements in the New York Insurance Law and regulations promulgated thereunder and any other applicable law or regulations. In addition, if an Insurer obligated itself by contract with its principal, the insurer or insured, to retain records for a period of time, then such obligation, if legally enforceable, must be satisfied, subject to an alternative acceptable to the principal. These communications used to satisfy the Notice Obligations may be subject to Department review, including, but not limited to, on examination.

Below is a summary of the Insurer requirement in the relevant emergency regulations.

New 11 NYCRR 229.5(a) requires an insurer authorized to write life insurance or annuities, an authorized fraternal benefit society, and an insurer that writes certain types of property/casualty insurance policies, including an unauthorized insurer that sells insurance through a licensed excess lines broker and is subject to Insurance Law Article 34 to (1) provide notice to the policyholder with each insurance premium bill of the provisions of 11 NYCRR 229, as well as a toll-free number that the policyholder may call to discuss billing and make alternative payment arrangements, within ten business days following the promulgation of 11 NYCRR 229, and (2) notify insurance producers and any third-party administrators with whom or which the insurer does business of the provisions of 11 NYCRR 229.

New 3 NYCRR 405.6(b)(3) requires a premium finance agency to (1) provide notice to the policyholder with each insurance premium bill of the provisions of 3 NYCRR 405.6, as well as a toll-free number that the policyholder may call to discuss billing and make alternative payment arrangements, within ten business days following the promulgation of 3 NYCRR 405.6, and (2) notify insurance producers and any third-party administrators with whom or which the premium finance agency does business of the provisions of 3 NYCRR 405.6.

Below are links to model notices that Insurers can use to satisfy their Notice Obligations described above. INSURERS MUST ONLY SEND THE APPROPRIATE NOTICE TO THE APPROPRIATE CONSUMERS TO AVOID CONFUSION, AS DESCRIBED BELOW.

IMPORTANT REMINDER: The Notice Obligations to property/casualty policyholders only apply to certain kinds of policies affected by the emergency regulations and therefore may only be sent to holders of those specific kinds of policies to avoid confusion. The types of policies are explained in general terms in the model property/casualty notice linked above. The precise categories of policies are set forth in detail in the emergency regulations. Specifically, see 11 NYCRR 229.2(m) in the emergency regulations for the definition of “Property/casualty insurance policy.”