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 July 9, 2002, representing the position of the New York State Insurance Department.

Re: Proposed Issue or Sale in New York of Medical and Hospital Insurance Policies to Peruvians residing in New York State for the Benefit of Their Immediate Family Members Living in Peru

Question Presented:

May Peruvian doctors issue or sell medical/hospital insurance policies in New York State to Peruvians residing in New York State insuring their immediate family members residing in Peru?

Conclusion:

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. Thus, unless licensed as an insurer in New York, Peruvian doctors may not issue medical/hospital insurance policies to Peruvians in New York State, even if such policies insure Peruvians residing in Peru. In addition, if the group of doctors intend to sell such insurance on behalf of an unlicensed Peruvian insurer, N. Y. Ins. Law § 2117(a) (McKinney 2000 & Supp. 2002) would prohibit such activity. That section prohibits a person, firm, association or corporation from, among other things, acting as an agent in New York for any insurer which is not licensed or authorized to do an insurance business in this state.

Facts:

The inquirer states that a group of doctors wish to sell medical/hospital insurance policies to New York State Peruvian nationals who have immediate family members living in Peru. The inquirer further states that public medical facilities in Peru are less desirable than private facilities. Peruvian nationals presently living in New York have approached the doctors in question with a plan to provide better medical care for their families in Peru.

The inquirer would like to know if this proposal could be marketed as a medical insurance policy to be sold in New York State for the benefit of Peruvian citizens in Peru. The inquirer also questioned whether such proposal would have to be incorporated with an existing medical health insurance company situated in New York State or whether the insurance could be independently operated in New York subject to a financial bond or appropriate financial funding in place to insure the fiscal integrity of the medical insurance policy. It is unclear whether the group of doctors in question intends to provide, as insurer, the insurance themselves, in New York, or whether they intend to sell it on behalf of an unlicensed Peruvian insurer. Accordingly, we will address both possibilities.

Analysis:

The inquirer asks whether the proposed medical and hospital insurance would have to be incorporated with an existing medical health insurance company situated in New York or whether such insurance could be independently operated in New York subject to a financial bond or appropriate financial funding in place to insure the fiscal integrity of the medical insurance policy. The inquirer’s first question regarding incorporation of the plan with an existing medical health insurance in New York does not provide sufficient details for the Department to supply an answer. In addition, the Insurance Law would not allow the proposed plan to be independently operated in New York subject to a financial bond or appropriate financial funding. This opinion will, however, explain the Insurance Law as it relates to the set of facts outlined above.

N.Y. Ins. Law § 1101 (McKinney 2000 & Supp. 2002) defines those acts that constitute the doing of an insurance business in New York State. In addition, N.Y. Ins. Law §1102 (McKinney 2000) prohibits a person or entity from making or proposing to make, "as insurer, any insurance contract, including either issuance or delivery of a policy or contract of insurance to a resident of this state or to any firm, association, or corporation authorized to do business herein, or solicitation of applications for any such policies or contract.2 unless authorized by a license in force or exempted from such requirement.2 Thus, an unlicensed person or entity, such as the group of doctors, would be violating Section 1102 if it issued or delivered a policy of medical or hospital insurance in New York without a license.

In addition to the prohibition laid out in N.Y. Ins. Law § 1102 (McKinney 2000) against the doing of insurance in this state without a license, N. Y. Ins. Law § 2117(a) (McKinney 2000 & Supp. 2002) also prohibits a person, firm, association or corporation from acting as an agent in New York for any insurer that 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 or placing risks with such insurer or, in any way or manner aiding such insurer in effecting any insurance in this state. Therefore, the doctors may not, even if they were licensed as insurance agents or brokers in New York, sell insurance in New York on behalf of an unlicensed insurer.

In conclusion, unless licensed as an insurer in New York, Peruvian doctors may not issue or sell medical/hospital insurance policies to Peruvians residing in New York State, even if such policies insure Peruvians residing in Peru. In addition, if the group of doctors intend to sell such insurance on behalf of an unlicensed Peruvian Insurer, N. Y. Ins. Law § 2117(a) (McKinney 2000 & Supp. 2002) would prohibit such activity.

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

 


.1See, N.Y. Ins. Law §1101(b)(1)(A) (McKinney 2000).

2See, N.Y. Ins. Law § 1101 (b)(2)(McKinney 2000) for exemptions to the licensing requirement, none of which appear to be applicable here.