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

The Office of General Counsel issued the following informal opinion on June 4, 2002, representing the position of the New York State Insurance Department.

Re: Licensing Requirements for Persons Who Market Health Insurance in New York on Behalf of Unauthorized Insurers

Question Presented:

What are the licensing requirements for a person who markets health insurance in New York on behalf of unauthorized insurers?

Conclusion:

N. Y. Ins. Law § 2117(a) (Interim Pocket Part 2001-2002) prohibits a person, firm or association from acting as an agent in New York for any insurer which is not licensed or authorized to do an insurance business in this state. Such person is also prohibited from soliciting, negotiating or effectuating any insurance, or acting as a broker in soliciting, negotiating or in any way effectuating any insurance, or placing risks with such insurer, or in any way or manner aiding such insurer in effecting any insurance in this state. N. Y. Ins. Law § 2117(b) & (c) (Interim Pocket Part 2001-2002) contain certain exceptions, none of which apply here.

Facts:

The inquirer states that he intends to open a brokerage operation in New York to offer health insurance to: (1) those going to live outside of the United States for a specific length of time or indefinitely. Almost all of these people are unable to purchase standard health coverage through a United States insurance company; and (2) those coming to live in the United States under the same circumstances but who have some type of visa which permits them to work or live in the United States.

The inquirer further states that almost all of the policies currently available are offered through unauthorized insurers who are not licensed in New York or anywhere in the United States. In addition, the inquirer states that even if the insurer is licensed in New York, the policy in question is not approved in New York. The inquirer also states that many of these policies are available through United States based websites where the insurance can be purchased with a credit card via an online application.

Analysis:

N.Y. Ins. Law § 1101 (McKinney 2000) defines those acts which constitute the doing of an insurance business in New York State. N. Y. Ins. Law § 1102 (McKinney 2000) prohibits a person, firm, association, corporation or joint stock company from doing an insurance business in this state unless authorized by a license or exempted from such requirement. Under the foregoing set of facts, an unauthorized insurer would be violating Section 1102 if it issued or delivered a policy of health insurance in New York to New York residents traveling outside of the United States and foreign residents that reside temporarily in New York.

Additionally, even if the inquirer were to become licensed as an insurance agent or broker in New York, the proposed activities would violate N. Y. Ins. Law § 2117(a) (Interim Pocket Part 2001-2002), 1which provides in pertinent part:

No person, firm, association or corporation shall in this state act as agent for any insurer or health maintenance organization which is not licensed or authorized to do an insurance or health maintenance organization business in this state, in the doing of any insurance or health maintenance organization business in this state or in soliciting, negotiating or effectuating any insurance, health maintenance organization or annuity contract or shall in this state act as insurance broker in soliciting, negotiating or in any way effectuating any insurance, health maintenance organization or annuity contract of, or in placing risks with, any such insurer or health maintenance organization, or shall in this state in any way or manner aid any such insurer or health maintenance organization in effecting any insurance, health maintenance organization or annuity contract.

Further, N. Y. Ins. Law § 2122 (McKinney 2000) prohibits any person from calling attention to an unauthorized insurer by advertisements or public announcements in this state whether via the internet or other means. Therefore, the inquirer may not market such insurance in New York on behalf of unauthorized insurers, even if he became licensed as an insurance agent or broker.

The inquirer also mentioned that "these policies are available through websites (US-based or otherwise) where the insurance can be purchased with a credit card via an online application." For information on solicitation and advertisements via the internet, Circular Letter No. 5 of 2001 was enclosed.

The inquirer also stated that in regard to authorized insurers, most of the policies he intends to sell in New York have not been approved in New York. In regard to accident and health insurance, N. Y. Ins. Law § 3201(b)(1) (McKinney 2000) provides that "no policy form shall be delivered or issued for delivery in this state unless it has been filed with and approved by the superintendent." Also such policy must not be inconsistent with the Insurance Law or any other law. Accordingly, the insurer may not deliver or issue for delivery in this state a policy of insurance that the Department has not approved.

For further information you may contact Senior Attorney D. Monica Marsh at the New York City Office.


1 N.Y. Ins. Law § 2117(b) & (c) list exceptions, none of which apply here.