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 on January 29, 2004, representing the position of the New York State Insurance Department.

RE: Sale of Insurance to Non-residents and Residents of New York

Questions Presented:

1. Pursuant to the New York Insurance Law, may a New York licensed life insurance agent, who represents an insurer that is authorized in New York and the home state of the non-resident, sell life insurance to a non-resident while such non-resident is visiting New York? Does the length of the non-resident’s stay in New York affect the answer to this question?

2. Pursuant to the New York Insurance Law, may an unauthorized insurer sell life insurance to a New York resident while the New York resident is visiting the unauthorized insurer’s state of domicile, without becoming licensed as an insurer in New York?

Conclusions:

1. Yes. Such agent may sell life insurance to a non-resident while the non-resident is visiting New York. The length of the non-resident’s stay in New York does not affect the answer.

2. Yes. An unauthorized insurer may sell life insurance to a New York resident, under the circumstances that the inquirer described, without becoming licensed as an insurer in New York.

Facts:

The inquirer asked whether a New York licensed life insurance agent, representing an insurer that is authorized in New York and in the home state of the non-resident sell a life insurance policy to the non-resident, when the non-resident comes into New York for the sole purpose of visiting friends and/or relatives. We will assume that the inquiry pertains to a non-group life insurance policy. The inquirer would like to know whether the answer to this question is contingent upon the length of the non-resident’s stay in New York. The next question is whether an unauthorized insurer may sell life insurance to a New York resident while the New York resident is visiting the unauthorized insurer’s state of domicile, without becoming licensed as an insurer in New York. For purposes of this opinion, we will assume that the unauthorized insurer or anyone acting on its behalf has not had any previous contact with the New York resident.

Analysis:

Question No. 1

There is nothing in the New York Insurance Law that would prevent a New York licensed life insurance agent from selling life insurance to a non-resident under the circumstances that the inquirer described, so long as this is done in accordance with all applicable New York laws. However, the agent may also be subject to the laws of the other state. The length of the non-resident’s stay does not affect the answer.

Question No. 2

Generally, New York law does not preclude an insured from obtaining insurance outside of New York from an unauthorized insurer, but it regulates the activities of the unauthorized insurer in New York, whether performed by mail or otherwise from outside New York, and the activities of those acting on behalf of the unauthorized insurer.

N.Y. Ins. Law § 1102(a)(McKinney 2000 and Supp. 2004) prohibits any person, firm, association, corporation or joint-stock company from doing an insurance business in this state, unless licensed as an insurer or exempted from licensing.

N.Y. Ins. Law § 1101(b)(1)(McKinney 2000 and Supp. 2004) defines the term "doing an insurance business" in pertinent part as:

(A) making, or proposing to make, as an 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 contracts; . . .

(C) collecting any premium, membership fee, assessment or other consideration for any policy or contract of insurance; . . .

(E) doing or proposing to do any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of this chapter.

N.Y. Ins. Law § 1101(b)(2) (McKinney 2000 and Supp. 2004) provides an exemption for transactions performed by an unauthorized foreign or alien insurer if effected by mail from outside of New York, provided that the insurer is licensed by its place of domicile to transact an insurance business. N.Y. Ins. Law § 1101(b)(2)(McKinney 2000 and Supp. 2004) provides, in pertinent part, as follows:

(b)(2) Notwithstanding the foregoing, the following acts or transactions, if effected by mail from outside this state by an unauthorized foreign or alien insurer duly licensed to transact the business of insurance in and by the laws of its domicile, shall not constitute doing an insurance business in this state, but section one thousand two hundred thirteen of this chapter shall nevertheless be applicable to such insurers: . . .

(E) transactions with respect to policies of insurance on risks located or resident within or without this state (except master policies or contracts of group insurance which are subject to the requirements of suparagraph (B) hereof), which policies are principally negotiated, issued and delivered without this state in a jurisdiction in which the insurer is authorized to do an insurance business . . .

The exemption in Section 1101(b)(2)(E) applies to subsequent transactions effected by mail after the policy has been principally negotiated, issued and delivered outside of New York. In the instant case, assuming that the policies in question are principally negotiated, issued and delivered outside of New York and the insurer is duly licensed in its state of domicile and authorized to do an insurance business in the jurisdiction in which the policy is placed, it would not have to be licensed in New York to perform subsequent transactions by mail, in regard to that policy.

For further information you may contact Senior Attorney Pascale Joasil at the New York City Office.