New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following informal opinion on December 24, 2002, representing the position of the New York State Insurance Department.

RE: Licensing Provisions

Question Presented:

Does N.Y. Not-For-Profit Corp. Law § 404(v) require the approval of the Superintendent of Insurance to be annexed on or to a certificate of incorporation that does not include among the purposes of the corporation, the establishment, maintenance and operation of a nonprofit property/casualty insurance company?

Conclusion:

No, N.Y. Not-For-Profit Corp. Law § 404(v) does not require the approval of the Superintendent of Insurance to be annexed on or to a certificate of incorporation that does not include among the purposes of the corporation, the establishment, maintenance and operation of a nonprofit property/casualty insurance company.

Facts:

An inquirer stated that his company is incorporated in Texas and that he is in the process of applying for authorization by the New York Department of State to conduct activities in New York as a foreign not-for-profit corporation, pursuant to N.Y. Not-For-Profit Law § 1301 (McKinney 1997). The inquirer stated that, with respect to the activities to be conducted in New York, the not-for-profit corporation will act as a non-resident insurance agency that will market insurance products to New York resident members of the American Federation of Labor-Congress of Industrial Organization ("AFL-CIO").

The Articles of Incorporation describe the corporate purpose as follows: "To develop, promote and sponsor benefit and other programs for members (and their families) belonging to national and international unions affiliated with American Federation of Labor-Congress of Industrial Organization ("AFL-CIO")."

The inquirer submitted a copy of a letter sent to him by the New York Department of State that states that his application had not been accepted because of the following reasons: "The purposes and public objective are still too vague. . . .You are also referred to Section 404(v) of the Not-For-Profit Corporation Law regarding the consent from the New York State Department of Insurance."

Analysis:

N.Y. Not-For-Profit Corp. Law § 404(v) (McKinney 2002 Pocket Part) states:

Every certificate of incorporation which includes among the purposes of the corporation, the establishment, maintenance and operation of a nonprofit property/casualty insurance company, pursuant to article sixty-seven of the insurance law, shall have endorsed thereon or annexed thereto the approval of the superintendent of insurance.

Thus, the above-cited statute does not require the approval of the Superintendent of Insurance to be annexed on or to a certificate of incorporation that does not include among the purposes of the corporation, the establishment, maintenance and operation of a nonprofit property/casualty insurance company.

The inquirer asserted that one of the reasons that the Department of State had not approved his application to conduct activities in New York as a foreign not-for-profit corporation is because he had not obtained the approval of the Superintendent of Insurance pursuant to N.Y. Not-For-Profit Corp. Law § 404(v). The inquirer asserted that this statute is inapplicable because the corporation’s sole purpose is to act as an insurance agency, and not as an insurer. It appears to us that the matter would be resolved by amending the certificate of incorporation to clarify that the purpose of the corporation does not include the establishment, maintenance and operation of a nonprofit property/casualty insurance company.

Although the inquirer did not raise the question, it is advised that in order to act as a non-resident insurance agent in New York, a non-resident’s application must be submitted to the New York State Insurance Department for approval by this Department. N.Y. Ins. Law §§ 2101, 2102, and 2103 (McKinney 2000). The Licensing Bureau may may be contacted at 1-800-300-4576 for further details.