State RegulationsNY specificDifficulty 1/5
DFS examiners arrive at an Albany insurance agency to review its insurance transaction records. Under New York law, whose books and records may the Superintendent of Financial Services examine?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §2404, the Superintendent of Financial Services has broad authority to examine the books and records of insurers and other licensees transacting insurance business in New York, and Reg 152 (11 NYCRR Part 243) sets the recordkeeping standards producers must observe so their records are available for examination. Examinations are how DFS verifies compliance with premium, claim, and licensing rules.
Why the other options are wrong
- A) Producers and brokers are licensees whose records are examinable; the Superintendent's authority is not limited to admitted insurers.
- C) No pending lawsuit is required — the Superintendent may examine on the Department's own initiative whenever compliance must be verified.
- D) Examinations are compulsory exercises of regulatory authority, not voluntary programs that licensees choose to join.
Memory hook
DFS can audit any insurance books — carrier or producer alike.