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 May 16, 2001, representing the position of the New York State Insurance Department

Re: Soliciting Existing Customers to Refinance Mortgages

Question Presented:

Does the Insurance Law prohibit an insurance broker from soliciting its existing customers to refinance mortgages through your mortgage brokerage business?

Conclusion:

No. The Insurance Law does not prohibit an insurance broker from soliciting its existing customers to refinance mortgages through your mortgage brokerage business.

Analysis:

The Insurance Law does not prohibit an insurance broker from soliciting its existing customers to refinance mortgages through your mortgage brokerage business. The solicitation, however, could not be done in a manner that would also involve disclosure to the mortgage broker, by the broker, of the identity or other non-public personal financial information of such insurance customers in contravention of Department Regulation 169 (Privacy of Consumer Financial and Health Information), N.Y. Comp. Codes R. & Regs. tit. 11 Part 420 (2001). Also important is N.Y. Ins. Law §§ 2324 and 2502 (McKinney 2000), with regard to possible issues of rebating, discrimination, and unfair practices.

There is nothing in the Insurance Law to prohibit the insurance brokers from doing business in another field, such as banking and financing mortgages.

For further information, you may contact Associate Attorney Jeffrey A. Stonehill at the New York City office.