February 20, 1958
TO ALL AUTHORIZED CASUALTY, SURETY, FIRE AND MARINE INSURERS:
It has come to the attention of this Department that certain licensed insurers have issued or filed policies, bonds, or certificates on behalf of other insurers which are not authorized to transact business in this State. Such practice has come to be known as "fronting" or "filing" and by its use some unauthorized insurers have been indirectly aided or abetted in transacting business in the State of New York.
Regardless of the method chosen, such an act, in the opinion of this Department, constitutes a violation of Section 112 of the New York Insurance Law, which provides that no person, firm, association, or corporation shall, in this State, in any way or manner, aid an unauthorized insurer in effecting any insurance contract.
Any authorized insurer which has been or is "fronting" or "filing" in this State for an unauthorized insurer, is hereby directed to discontinue such activity immediately.
Please acknowledge receipt of this letter and advise as to how you propose to treat business of the type hereinabove described, which may now be on your books.
Very truly yours,