Litigation

The New York Insurance Department Office of General Counsel has issued a new opinion that may impact structured settlement practice, particular those intermediaries who work with affilated auto insurers on two sides of a claim, where one handles the 1st party and another handles the 3rd party claim.

In an opinion of the Department?s Office of General Counsel (?OGC?) dated January 28, 2002, OGC concluded that an employee of an insurer that is adjusting a claimant?s no fault claim may share the claimant?s non-public health information with another employee in the same company who is adjusting the claimant?s third-party BI claim, without first obtaining consent from the claimant. That opinion relied on §  420.17(b) of New York Comp. Codes R. & Regs.(?NYCRR?), tit. 11, Part 420 (?Regulation 169?)

A more recent inquiry asked the OGC whether the analysis set forth in the January 28, 2002 opinion applies with equal force to insurers that are affiliates. In other words, she asks whether the employee of an insurer that is adjusting a claimant?s first-party claim may share non-public personal health information about that claimant with an employee of an affiliate that is adjusting the claimant?s third-party bodily injury (BI) claim.

The conclusion of the OGC is "The plain language of 11 NYCRR § 420.17(b) permits a licensee to share non-public personal health information for the performance of certain insurance functions ?by or on behalf of the licensee? (emphasis supplied). Thus, the scope of that exception is limited to the same insurer?not to affiliate insurers. Therefore, an employee of an insurer that is adjusting a claimant?s first-party claim may not share non-public personal health information about that claimant with an employee of an affiliate that is adjusting the claimant?s third-party BI claim".

Medical information is needed to obtain a rated age which in turn has impact structured settlement pricing of life contigent annuity payments.