The Office of General Counsel issued the following opinion on November 14, 2002, representing the position of the New York State Insurance Department.
Re: Medical Examinations and Accepting Premium Payments
Must a paramedic who examines a potential insured be licensed as an insurance agent or broker if the paramedic also collects the signed application and premium payment at the time of the exam?
No, the mere ministerial collection of a signed application and premium payment by the paramedic would not violate the New York Insurance Law.
The following scenario was presented in an inquiry. In response to a television advertisement for life insurance, an applicant calls a toll-free number and speaks to a licensed insurance agent regarding eligibility for the coverage. If determined to be eligible, the applicant gives the agent application information over the phone. After the phone call, the agent sends the applicant an application packet and sets up a paramedical exam for the applicant. The application packet contains a completed application to be signed by the potential insured, as well as an envelope for the premium payment. At the time of the exam, the paramedic collects the sealed envelope containing these items from the applicant and returns them, along with any exam paperwork, to the laboratory. The laboratory test results and the sealed envelope containing the premium and completed application are then forwarded to the insurer.
Both the insurance company and the licensed agent to whom the applicant speaks are licensed in New York State. The paramedic only examines applicants that have already completed an application and, thus, serves as a courier of the signed application and premium payment.
Based on the information provided, both the insurance company and the individual with whom the applicant speaks on the phone are properly licensed in New York. The question remains whether the activities of the paramedical staff, who are unlicensed, are in conflict with any applicable statutes. The most relevant section to these circumstances is § 2102(a)(1), which provides:
(a)(1) No person, firm, association or corporation shall act as an insurance agent, insurance broker, reinsurance intermediary or insurance adjuster in this state without having authority to do so by virtue of a license issued and in force pursuant to the provisions of this chapter.
There is no evidence that any member of the paramedical staff is acting as an insurance broker as defined in § 2101(b). The chief concern in the instant scenario is whether the activities of the paramedical staff are of such a character so as to fall within the scope of acting as an "insurance agent", as defined by N.Y. Ins. Law § 2101(a), which provides as follows:
Insurance agent means any authorized or acknowledged agent of an insurer or fraternal benefit society, and any sub-agent or other representative of such an agent, who acts as such in the solicitation of, negotiation for, or procurement or making of, an insurance or annuity contract, other than as a licensed insurance broker.
Here, the paramedic is sent by the insurance company merely to examine an individual who has already contacted the insurer and completed the application forms. The paramedic does not answer any questions for the applicant nor does he provide any information about the insurance policy for which the applicant is applying. Under these facts, the paramedic is not soliciting, negotiating, procuring, or making an insurance contract under the meaning of § 2101(a). As noted in Office of General Counsel Opinion (November 20, 2000), " merely receiving and collecting application information is a ministerial or clerical act that does not require licensing as an insurance agent."
Given that the scope of the paramedical activities do not constitute acting as an insurance agent or broker, no licensing statutes are violated and the existing arrangement does not appear to violate any New York State Insurance laws.
For further information, you may contact Supervising Attorney Michael Campanelli at the New York City office.