New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on April 12, 2001, representing the position of the New York State Insurance Department.

Re: No Physical Presence in NY Requirement for Foreign Insurers

Question Presented:

Does the New York Insurance Law or regulations promulgated thereunder require a foreign insurer licensed in New York to maintain a physical office presence in New York?

Conclusion:

No. A foreign insurer licensed in New York is not required to maintain a physical office presence in New York.

Facts:

A New York State resident covered under an individual disability policy by a foreign insurer licensed in New York, commenced legal action against the insurer for failing to honor its contractual obligations. The insured’s attorney attempted to depose several witnesses from the insurer; however, the insurer refused to submit to depositions in New York. The insurer indicated that the insured must go to Tennessee or Maine to depose its witnesses. This inquiry asks whether this is a violation of the Insurance Law or regulations promulgated thereunder, and whether New York requires foreign insurers to maintain an office in this State.

Analysis:

There is no requirement in the New York Insurance Law or regulations that a "foreign" insurer licensed in New York must maintain a physical office presence in the state of New York.

However, there does exist such a requirement for an "alien" insurer. An alien insurer must enter this country and conduct business through a United States branch. An alien insurer’s United States branch may enter the United States through New York State or another state that allows for the licensing of alien insurers. If the alien insurer enters the United States through the State of New York, the Insurance Law requires that the insurer, via its U.S. branch, maintain an office in this state. N.Y. Ins. Law § 325 (McKinney 2000) concerning the maintenance of records, sets forth this requirement, stating in relevant part:

(a) Every domestic insurer and every licensed United States branch of an alien insurer entered through this state shall, except as hereinafter provided, keep and maintain at its principal office in this state its charter and by-laws (in the case of a United States branch a copy thereof) and its books of account . . .

Section 325 of the Insurance Law was amended by Chapter 196 of the laws of 1987 to include the provisions relevant to alien insurers. The Insurance Department, in its memorandum of June 26, 1987 in support of the legislation, stated, in part, as follows:

The Superintendent of Insurance is responsible for the regulation and examination of licensed United States branches of alien insurers who enter the United States through this state. New York is the state of domicile for such insurers and certain rights and obligations accrue to the insurers. The maintenance of a principal office in this state and the obligation to return books of account to this state are obligations currently imposed upon domestic insurers, and their applications to licensed United States branches of alien insurers, who entered the United States through New York, is prudent and reasonable.

As can be reasonably determined from above, New York law does not impose the requirement of a physical office presence in the state of New York to authorized foreign insurers because these insurers are not domiciled in New York State. Since they are foreign, the Superintendent of Insurance is not the principal regulator of such insurers.

Additionally, another issue raised in this inquiry is regarding the location of the depositions. That issue is under the jurisdiction of the Courts, not this Department.

For further information, you may contact Senior Attorney Meredith S. Kaufer at the New York City Office.