The Office of General Counsel issued the following opinion on February 27, 2002, representing the position of the New York State Insurance Department.
Re: Replacing logo on application form for property/casualty insurance
May a licensed property/casualty agent who is the managing general agent for an insurer, amend the insurers policy application by substituting the existing insurance company logo for a logo belonging to the managing general agent?
If the insurance company has made its application for insurance a part of its policy, then such application, and any subsequent changes to it, generally must be approved by the Superintendent pursuant to N.Y. Ins. Law § 2307(b) (McKinney Supp. 2001-2002). If, however the application at issue is not part of the policy, then the New York Insurance Law has no requirement that such application be approved by the Superintendent. In either case, the replacement of the logo, and the use of the logo, depending upon the circumstances, may be found by the Superintendent to be fraudulent, dishonest or untrustworthy, and therefore a basis for disciplinary action pursuant to N.Y. Ins. Law § 2110 (McKinney 2000). If the application is not considered as part of the policy, the insurance company may prohibit a managing general agent from replacing its logo with that of the managing general agent based on the contract between the two parties.
An inquiry was made on behalf of a member of a professional association. This member inquired whether the following is permitted. This member is a licensed property/casualty agent who is the managing general agent (hereinafter, MGA) for an insurer. This MGA obtained from the insurer its insurance application form, which had been approved by the Superintendent. The MGA wants to amend this form by replacing the logo of the insurer with his own logo. There was no indication whether the insurers name would otherwise appear on the application. The MGA wanted to know if this amended form must be submitted to the Superintendent for approval.
The relevant sections of the Insurance Law are N.Y. Ins. Law § 2307(b) (McKinney Supp. 2001-2002) and N.Y. Ins. Law § (2110)(a)(3) and (4) (McKinney 2000). N.Y. Ins. Law § 2307(b) (McKinney Supp. 2001-2002) states in the relevant part:
Except as otherwise provided herein, no policy form shall be delivered or issued for delivery unless it has been filed with the superintendent and either he has approved it, or thirty days have elapsed and he has not disapproved it as misleading or violative of public policy. . . .
N.Y. Ins. Law § 2110 (McKinney 2000) states in the relevant part:
(a) The superintendent may refuse to renew, revoke, or may suspend for a period he determines the license of any insurance agent, . . . , if, . . . , he determines that the licensee . . . has:
(1) violated any provision of this chapter, or has violated any law in the course of his dealings in such capacity;
. . . .
(3) been guilty of fraudulent or dishonest practices; or
(4) demonstrated his . . . untrustworthiness to act in such capacity.
Generally, an application for property/casualty insurance is not considered to be a policy form, and therefore is not required to be filed or approved by the Superintendent. However, if the property/casualty insurer makes the application part of a policy, then the application form must be filed pursuant to N.Y. Ins. Law § 2307(b) (McKinney Supp. 2001-2002). Once such application, as part of the policy form, has been approved, any changes to it require approval.
Even if an application is not part of the policy, depending upon the circumstances, the alteration of the application, and the use of the logo, may still be found by the Superintendent to be fraudulent, misleading or untrustworthy activity. Pursuant to N.Y. Ins. Law § 2110 (McKinney 2000), the use of such application may then become the grounds for disciplinary action by the Superintendent.
If the application does not need approval because it is not part of the policy, and the use of such amended application is not otherwise improper pursuant to the Insurance Law, then the MGAs alteration of such application would solely be governed by the contract between the insurance company and the MGA. A court of competent jurisdiction would have to determine any and all unresolved contract issues arising from such a situation.
For further information you may contact Senior Attorney Susan A. Dess at the New York City Office.