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 December 9, 2004, representing the position of the New York State Insurance Department.

Re: Gifts Thanking Insurance Clients

QUESTION PRESENTED:

May a licensed insurance agent or broker send their clients a gift basket valued at approximately $25.00 thanking the clients for their business?

CONCLUSION:

No. N.Y. Ins. Law § 4224(c) (McKinney 2004) prohibits agents or brokers from giving gifts of any value to their clients in connection with life or accident and health insurance policies or annuities unless it is specified in the policy or contract. In connection with property/casualty insurance, N.Y. Ins. Law § 2324(a) (McKinney 2004) prohibits agents and brokers from giving a gift having a value of more than $15.00 and that which does not contain a conspicuously printed or stamped advertisement of the insurer, agent or broker.

FACTS:

The inquirer wishes to send its existing clients gift baskets valued at approximately $25.00 as a way of thanking them for their business. The inquirer does not indicate whether it intends to send these to clients in connection with life insurance or property/casualty insurance.

ANALYSIS:

N.Y. Ins. Law § 4224(c) provides, in pertinent part, as follows:

No such life insurance company and no such savings and insurance bank and no officer, agent, solicitor or representative thereof and no such insurer doing in this state the business of accident and health insurance and no officer, agent, solicitor or representative thereof, and no licensed insurance broker and no employee or other representative of any such insurer, agent or broker, shall pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to any person to insure, or shall give, sell or purchase, or offer to give, sell or purchase, as such inducement, or interdependent with any policy of life insurance or annuity contract or policy of accident and health insurance, any stocks, bonds, or other securities, or any dividends or profits accruing or to accrue thereon, or any valuable consideration or inducement whatever not specified in such policy or contract. (emphasis added).

Pursuant to § 4224(c), an insurance agent or broker is not permitted to give "thank you" gifts to any person interdependent with any policy of life insurance or annuity contract or policy of accident and health insurance unless specified in the policy. The scope of this provision encompasses persons that are prospective, as well as, existing clients.

N.Y. Ins. Law § 2324(a) provides:

No authorized insurer, no licensed insurance agent, no licensed insurance broker, and no employee or other representative of any such insurer, agent or broker…shall give or offer to give any valuable consideration or inducement of any kind, directly or indirectly, which is not specified in such policy or contract, other than any article of merchandise not exceeding fifteen dollars in value which shall have conspicuously stamped or printed thereon the advertisement of the insurer, agent or broker. (emphasis added).

§ 2324 applies to insurance other than insurance subject to § 4224. Under § 2324(a), an agent or broker is not permitted to give a "thank you" gift to clients that exceeds $15.00, and which does not contain a conspicuously stamped or printed advertisement of the insurer, agent and broker. Again, this provision encompasses both prospective as well as existing clients. The "article of merchandise" that § 2324(a) contemplates is a "keepsake", not exceeding $15.00 in retail value, that is designed to keep the name of the insurer or producer before the client through the embossing of the insurer's or producer's name.A gift basket is not a keepsake and would not meet the requirements under this section.

For further information you may contact Principal Attorney Paul A. Zuckerman at the New York City Office.


1  It has been the longstanding opinion of the Office of General Counsel that the valuation of the articles of merchandise is the retail value to the person receiving the article of merchandise—not the cost to the licensee (See Office of General Counsel Opinions July 13, 1999 and May 14, 2002 (May 14, 2002 opinion is available online at the Insurance Department website at www.ins.state.ny.us)).