The Office of General Counsel issued the following informal opinion on October 11, 2001, representing the position of the New York State Insurance Department.
RE: Countersignature by resident licensed agent for sale of marine insurance
May an authorized insurer sell marine insurance policies directly to consumers without obtaining countersignatures of resident licensed agents on such policies?
Under New York insurance law, an authorized insurer may sell marine insurance directly to consumers without obtaining countersignatures of resident licensed agents on such policies.
The inquirer works for an insurance company, (hereinafter ABC) that issues insurance policies for yachts. The inquirer explained that independent agents approach ABC for quotes on yacht policies; that the agent relates ABCs quote to the customer; and if the customer agrees to buy ABCs policy, ABC tenders the policy to the resident licensed agent who signs it and then issues it to the customer.
This inquiry focused on alleged sales procedures used by another insurance company, (hereinafter XYZ) which also sells insurance policies covering yachts. The inquirer claimed that XYZ sells these policies directly to the consumer, without using a resident licensed agent; therefore, there is no resident licensed agent signing these contracts.
The issue is whether XYZ may sell these contracts directly to the consumer without using a resident licensed agent. Although the inquiry concerned XYZs ability to do this in any state, this answer is limited to the laws of New York State. Since each state has different insurance laws, one must inquire to the proper authority of each state for accurate information.
The relevant statutes are N.Y. Ins. Law § 310 (McKinney 1966) which was repealed on February 2, 1972; and N.Y. Ins. Law § 1113(a)(20)(A) (McKinney 2000) which defines marine insurance to include insurance on yachts. N.Y. Ins. Law § 310 (McKinney 1966) stated in the relevant part:
1. Except as provided in subsection two, no licensed foreign or alien insurer shall in this state issue, deliver or otherwise effectuate any contract of insurance covering either persons resident in this state or property situated in this state, . . . unless such contract of insurance is issued or effectuated through, or countersigned by, a resident licensed insurance agent of this state.
N.Y. Ins. Law § 1113(a)(20)(A) (McKinney 2000) defines marine insurance as ". . . insurance against any and all kinds of loss of or damage to: [v]essels, hulls, . . . and all other kinds of property and interests therein, . . . in connection with any and all risks or perils of navigation . . . . " This definition was substantially the same when N.Y. Ins. Law § 310 (McKinney 1966) was in effect.
Currently, there is no statute requiring an authorized insurer, who is licensed to write marine insurance, to obtain a countersignature from a resident licensed insurance agent of this state when selling directly to a customer.
For further information you may contact Senior Attorney Susan A. Dess at the New York City Office.