Chamber of CommerceNew 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 November 29, 2004, representing the position of the New York State Insurance Department.

Re: Chamber of Commerce

Questions Presented

1. May a Chamber of Commerce, which is a not-for-profit organization, be licensed as a life insurance agent?

2. Can the proceeds earned by the Chamber of Commerce from the sale of life insurance be deposited into the general operating budget?

Conclusions

1. The New York Insurance Law does not prohibit a not-for-profit organization from becoming licensed as insurance agent. However, restrictions regarding such licensure may exist in either the not-for-profit corporate law; in other relevant laws; or in the corporate by-laws of the not-for-profit.

2. Yes, the New York Insurance Law would permit the Chamber of Commerce to deposit the proceeds it makes from selling insurance into the general operating budget. However, restrictions regarding the use of such money may exist in either the not-for-profit corporate law; in other relevant laws; or in the corporate by-laws of the Chamber of Commerce itself.

Facts

The inquirer presented the following situation. The inquirer is an insurance agent for American Family Life Assurance Company, (AFLAC). If the local Chamber of Commerce becomes licensed as an insurance agent, the inquirer wants to hire it as a subagent to sell insurance to the individual employees of the businesses that are members of the Chamber of Commerce. The inquirer’s question is whether the money earned by such licensed Chamber of Commerce must be segregated from the general budget and only used for the insurance business.

Analysis

The New York Insurance Law does not prohibit a not-for-profit organization from becoming licensed as an insurance agent. However, restrictions regarding such licensure may exist in either the not-for-profit corporate law; in other relevant laws; or in the corporate by-laws of the not-for-profit.

The New York Insurance Law would permit the Chamber of Commerce to deposit the proceeds it makes from selling insurance into the general operating budget. However, restrictions regarding the use of such money may exist in either the not-for-profit corporate law; in other relevant laws; or in the corporate by-laws of the Chamber of Commerce itself.

The Department provides no opinion with respect to these other possible restrictions.

For further information one may contact Susan Dess, Senior Attorney at the New York City Office.