The Office of General Counsel issued the following informal opinion on November 14, 2002, representing the position of the New York State Insurance Department.
Re: Unauthorized Alien Insurers Office
May an unauthorized alien insurer maintain a New York office that would not engage in doing an insurance business?
Yes. The activities described in the facts may be performed in a New York office without the insurer being licensed by the Department, provided the office doesnt use the unauthorized insurers name.
The inquirers client, an unauthorized alien mutual life insurer, desires to open a small office in New York to engage in "auxiliary and preparatory activities" such as gathering general information about what the American insurance industry is doing. The information gathered would be sent to the home office in its domicile country. There would be no dealing with insureds or prospective insureds, including no solicitation for or negotiation of insurance policies, no underwriting or servicing of insurance policies, no adjusting activity, no marketing or advertising of insurance, no collection of insurance premium monies, and no other conduct related to doing an insurance business.
The inquirers client proposes to restrict the use of its insurance name to the office door and building directory, to the business section of the telephone book, and perhaps its stationery.
N.Y. Ins. Law § 1101 (McKinney Supp. 2002) defines the term "doing an insurance business." N.Y. Ins. Law § 1102 (McKinney 2000) prohibits anyone from doing an insurance business in this state without being licensed unless exempt from licensing.
Based upon review of the activities described in the facts provided herein, the inquirers client would not be doing an insurance business within the meaning of the Insurance Law. Moreover, there would be no prohibition against such client conducting general information gathering about the insurance industry from an office in New York. The inquirers attention is also directed to N.Y. Ins. Law § 1101(b)(5) (McKinney Supp. 2002) concerning circumstances whereby an unauthorized insurer may provide services that are not deemed under the Insurance Law as doing an insurance business in this state.
The inquirers client, however, would be in violation of N.Y. Ins. Law § 2122 (McKinney 2000) if its unauthorized insurance name appeared on its stationery, in the telephone or building directory, and on its office door. N.Y. Ins. Law § 2122(a)(2) (McKinney 2000) provides that "[n]o insurance agent, insurance broker or other person, shall, by any advertisement or public announcement in this state, call attention to any unauthorized insurer or insurers." Any employee at the office is covered by the language of this statute. Placing the unauthorized insurers name into the stream of commerce such as in directories, displaying it on an outside door, or on stationery, including business cards, are all considered by the Department to be a public announcement that would attract notice. Therefore, the company would need to assume a different or fictitious name without the word "insurance" in it in order to have an appropriately named non-insurance entity in this state.
The inquirer should inquire directly with the N.Y. Department of State as to any requirements it may have in connection with the activities of the client here. The inquirer may also wish to review N.Y. Business Corporation Law § 1301 (McKinney Supp. 2002).
For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.