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 August 18, 2004, representing the position of the New York State Insurance Department.

RE: Acquisition of Insurance Agency by a Bank Holding Company

Questions Presented:

1. Is an insurance agency that does not perform underwriting services considered a "domestic insurer", to which N.Y. Ins. Law §1506 (McKinney 2000), which governs the acquisition and retention of control of insurers, applies?

2. If N.Y. Ins. Law §1506 (McKinney 2000) does not apply to insurance agencies, is there a formal procedure for approving the acquisition of an insurance agency by a bank holding company under the New York Insurance Law?

Conclusions:

1. No. An insurance agency that does not perform underwriting services is not considered a domestic insurer under the New York Insurance Law and, consequently, section 1506 does not apply.

2. No. The New York Insurance Law does not contain a formal procedure for approving the acquisition of an insurance agency by a bank holding company.

Facts:

An insurance agency and a bank holding company are organized under the laws of New York State. The insurance agency does not perform any insurance underwriting services. The inquirer researched the issues and was unsure whether N.Y. Ins. Law § 1506 (McKinney 2000), with respect to the acquisition or retention of control of insurers, applied to the acquisition of insurance agencies. The inquirer would like to know the appropriate procedure under the New York Insurance Law, if any, for approving the acquisition of an insurance agency by a bank holding company.

Analysis:

N.Y. Ins. Law § 1506 (McKinney 2000), entitled "Acquisition or Retention of Control of Insurers" applies to "domestic insurers". N.Y. Ins. Law § 107(a)(19) (McKinney 2000 and Supp. 2004) defines the term "domestic insurer" as any authorized insurer incorporated or organized under any law of this state. Since insurance agencies are not domestic insurers, they would not fall under this definition and, consequently, section 1506 would not apply.

With respect to the inquirer’s second question, our research revealed that the New York State Insurance Law does not contain a formal procedure for approving the acquisition of an insurance agency by a bank holding company. The inquirer was directed to contact the New York State Banking Department and the Federal Reserve for further guidance.

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