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The Office of General Counsel issued the following opinion on February 3, 2005, representing the position of the New York State Insurance Department.

Re: Broker commission

Question Presented

May an insurance broker licensed pursuant to N.Y. Ins. Law § 2104 (McKinney Supp. 2005), sell accident and health insurance coverage, including statutory disability benefits insurance pursuant to N.Y. Workers’ Compensation Law Article 9, on behalf of an authorized life insurer, and collect a commission thereon?

Conclusion

Yes, N.Y. Ins. Law § 2104(b)(1)(B) permits a licensed insurance broker to place any kind of insurance (except for life insurance and variable life and variable annuity products) including statutory disability benefits insurance, for a life insurer. Accordingly, the broker is entitled to receive a commission on such transaction on behalf of a life insurer, pursuant to N.Y. Ins. Law § 2116 (McKinney Supp. 2005).

Facts

None were presented.

Analysis

There is no prohibition in the Insurance Law against an insurance broker licensed pursuant to § 2104(b)(1)(B) from selling accident and health insurance, including statutory disability benefits insurance provided under Article 9 of the Workers’ Compensation Law, on behalf of a life insurer that is authorized to write such insurance, and collecting a commission from the insurer on such business. N.Y. Ins. Law § 2104(b)(1)(B) permits the insurance broker to sell any authorized kind of insurance except for life insurance and variable life and variable annuity. Since accident and health insurance, including statutory disability benefits insurance, is not so proscribed, a broker is permitted to sell same and to be paid a commission on such sale by the life insurer for such placement, pursuant to N.Y. Ins. Law § 2116 (McKinney Supp. 2005).

For further information one may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.

 

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