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 opinion February 19, 2003, representing the position of the New York State Insurance Department.

Re: Propriety of Advertisement including the term "Money-Saving Offers"

Question Presented:

Does an advertisement by a licensed life agent ("Agent X") stating, "For money-saving offers, please visit the offices of Agent X" violate N.Y. Penal Law § 190.20, Regulation 34, or any other relevant laws?

Conclusion:

Based on the facts presented, the advertisement does not violate Insurance Law § 2122. The facts are insufficient to make a definitive determination about whether the advertisement would violate N.Y. Penal Law § 190.20 or Regulation 34.

Facts:

"Agent X" is a licensed life agent who plans to broadly circulate an advertisement for health insurance products being offered to New York residents. The advertisement reads: "For money-saving offers, please visit the offices of Agent X." The advertisement is very general and does not specify what the money-saving offers are, how much the consumer will save, or who is eligible for the offers.

"Agent X" is a group agent representing a number of insurance companies. None of the insurance companies are specifically mentioned in the advertisement. The advertisement does not make reference to any specific policies, policy types, prices, discounts, or premiums.

Analysis:

N.Y. Ins. Law § 2122 (McKinney 2000), which addresses the permissible parameters of advertisements by licensees of the Department provides, in pertinent part:

Every agent of any insurer and every insurance broker shall, in all advertisements . . . which refer to an insurer, set forth therein the name in full of the insurer referred to and the name of the city . . . in which it has its principal office.

The language of the advertisement in question is very general. It merely uses the term "money-saving offers" and it does not name the specific insurer or insurers represented by the agent. Nor does the advertisement mention specific prices. The language merely alludes to the possibility that the agent could potentially save a prospective insured an indeterminate amount on premiums, presumably by having several different insurers from whom the prospective customer could choose to obtain coverage. It is because the agent represents several insurers and that the proposed language is so general and does not mention specific prices that it falls outside the bounds of § 2122(b), and does not constitute a violation thereof. See Office of General Counsel Opinion No. 01-06-02 (June 5, 2001). Thus, the advertisement need not be amended to mention any specific insurer’s principal place of business as provided in § 2122(b) and Regulation 34, N.Y. Comp. Codes R. & Regs. tit. 11, § 215.13 (1995).

The inquiry also poses the question of whether the proposed advertisement will violate either N.Y. Comp. Codes R. & Regs. tit. 11 § 215.6 (1995) (Regulation 34), or N.Y. Penal Law § 190.20 (McKinney 2000). Regulation 34 is the portion of the Unfair Trade Practices section of the New York Code that covers "Advertisements of Accident and Health Insurance." Regulation 34, at § 215.6(a)(1), reads in part:

No advertisement shall omit information or use words, phrases, statements, references or illustrations if the omission or such information or use of words, phrases, statements, references, or illustrations has the capacity, tendency, or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered, or premium payable.

Similarly, N.Y. Penal Law § 190.20 provides that:

A person is guilty of false advertising when, with intent to promote the sale or to increase the consumption of property or services, he makes or causes to be made a false or misleading statement in any advertisement.

The applicability of either section necessarily turns on whether the representations made in the advertisement conform to the actual quality and cost of the goods or services being sold. If the agent’s contention that he has "money-saving offers" is true, then the advertisement does not make a "false or misleading statement" under Regulation 34 or N.Y. Penal Law § 190.20.

New York Insurance Law § 2403 (McKinney 2000), entitled "Unfair methods of competition or unfair and deceptive acts or practices prohibited" bans both "determined violations" and "defined violations". "Defined violations" are violations of specified insurance and penal sections, including N.Y. Ins. Law § 2122 "Advertising by insurance agents and brokers", N.Y. Ins. Law § 2123 "Misrepresentations, misleading statements, and incomplete comparisons", and N.Y. Penal Law § 190.20 "False Advertising". Section 2403 creates civil penalties for both defined and determined violations. Therefore, if a particular advertisement violates one of the sections listed above, the violator will be subject to a civil penalty under N.Y. Ins. Law § 2403.

For further information you may contact Supervising Attorney Michael Campanelli at the New York City Office.