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 August 14, 2001, representing the position of the New York State Insurance Department.

RE: Certificates of Insurance for Excess Lines Insurance

Question Presented:

May an excess line broker or producing broker deliver an ACORD or similar form of a certificate of insurance to a third party, without said certificate containing the legend required by N.Y. Comp. Codes R. & Regs. tit.11 Part 27.17 (b) (1999) (Regulation 41)?

Conclusion:

Yes. An excess line broker or a producing broker may deliver an ACORD or similar form of a certificate of insurance to a third party without the legend required by the aforementioned Regulation.

Facts:

No specific fact pattern is supplied.

Analysis:

At the outset it is important to note that The Department has reconsidered the opinion issued to the inquirer dated June 1, 2001.

N.Y. Comp. Codes R. & Regs. tit.11 Part 27.17 (b) (1999) (Regulation 41) states as follows:

(b) No excess line broker shall deliver, or cause to be delivered by the producing broker to a person or entity requesting coverage from an unauthorized insurer any memorandum, certificate or other document evidencing insurance coverage, unless the document constitutes an insurance policy or contract of insurance actually issued by the insurer, except that the excess line broker or producing broker may deliver written confirmation of placement of coverage with the unauthorized insurer if the confirmation identifies the insurer by name and address, accurately describes the coverage, premium and terms, and bears across its face, in no less than ten point bold red type, the following legend:

THIS IS NOT AN INSURANCE POLICY AND THE INSURER (INSURERS)* HEREIN REFERRED TO IS (ARE) NOT LICENSED BY THE STATE OF NEW YORK AND NOT SUBJECT TO ITS SUPERVISION. THE INSURANCE CONFIRMED HEREIN, IN THE EVENT OF THE INSOLVENCY OF THE INSURER (INSURERS), IS NOT PROTECTED BY THE NEW YORK STATE SECURITY FUNDS. THE POLICY MAY NOT BE SUBJECT TO ALL OF THE REGULATIONS OF THE INSURANCE DEPARTMENT PERTAINING TO POLICY FORMS.

Regulation 41 expressly provides that the above-cited legend be provided to "a person or entity requesting coverage from an unauthorized insurer." Accordingly, when an excess line broker or producing broker delivers evidence of insurance to a party other than the person or entity requesting coverage, the certificate of insurance does not need to contain the legend quoted above.

For further information, you may contact Deputy Superintendent and General Counsel Audrey Samers at the New York City office.