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 October 30, 2002, representing the position of the New York State Insurance Department

Re: Analysis of life insurance needs by a CPA

Question Presented:

Must a certified public accountant obtain an insurance consultant’s license from the New York State Insurance Department in order to review and analyze the life insurance needs of his clients?

Conclusion:

Pursuant to N.Y. Ins. Law § 2102(b)(4)(B) (McKinney’s 2000), certified public accountants who provide information, recommendations, advice or services in their professional capacity are not required to obtain a license from the New York State Insurance Department, provided that neither they nor their employer receive any compensation directly or indirectly on account of any insurance, bond, annuity or pension contract that results in whole or in part from such information, advice or services.

Facts:

A certified public accountant working for a mid-sized public accounting firm in New York State provides financial planning and investment advisory services to individuals. These services include reviewing and analyzing the life insurance needs of clients. Although the certified public accountant was previously licensed as a life, accident, health insurance agent, the certified public accountant’s license has expired and the certified public accountant is no longer involved in any way with selling life insurance and annuity products.

Analysis:

N.Y. Ins. Law § 2102(b) states in pertinent part:

(3) Unless licensed as an insurance agent, insurance broker or insurance consultant with respect to the relevant kinds of insurance, no person, firm, association or corporation shall receive any money, fee, commission or thing of value for examining, appraising, reviewing or evaluating any insurance policy, annuity or pension contract, plan or program or shall make recommendations or give advice with regard to any of the above.

(4) This subsection shall not apply to:

(A) licensed attorneys at law of this state acting in their professional capacity as such;

(B) actuaries or certified public accountants who provide information, recommendations, advice or services in their professional capacity, if neither they nor their employer receive any compensation directly or indirectly on account of any insurance, bond, annuity or pension contract that results in whole or part from such information, recommendation, advice or services;…

N.Y. Ins. Law § 2102(b)(4)(B) (McKinney’s 2000), provides a limited exemption to certified public accountants to provide information, recommendations, advice or services in their professional capacity without obtaining a license from the New York State Insurance Department, provided that neither they nor their employer receive any compensation directly or indirectly on account of any insurance, bond, annuity or pension contract that results in whole or in part from such information, advice or services.

The facts, as the certified public accountant presented them, indicate that the certified public accountant and the certified public accountant’s employer are not in any way involved with the sale of life insurance and annuity products and that the certified public accountant and the certified public accountant’s employer do not receive any compensation directly or indirectly on account of any insurance, bond, annuity or pension contract that results in whole or in part from the information, advice or services that the certified public accountant provide to the certified public accountant’s clients. Therefore, it appears that the limited exemption for certified public accounts under N.Y. Ins. Law § 2102(b)(4)(B) (McKinney’s 2000) applies to the certified public accountant’s situation and the certified public accountant does not require a separate license from the New York State Insurance Department to provide information, recommendations, advice or services in the inquirer’s professional capacity as a certified public accountant.

If, for any reason, the certified public accountant does not believe that the limited exemption for certified public accountants under N.Y. Ins. Law § 2102(b)(4)(B) (McKinney’s 2000) applies to the certified public accountant’s particular situation, then the certified public accountant should request a license application for an Insurance Consultant’s license under N.Y. Ins. Law §2107 (McKinney 2000) from the licensing bureau.

For further information you may contact Special Counsel Athan Shinas at the Albany Office.