New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Howard Mills
Superintendent

The Office of General Counsel issued the following informal opinion on June 22, 2005 representing the position of the New York State Insurance Department.

Re: Hiring a person whose insurance broker license was revoked to work in an insurance business

Question Presented

May a person who has a revoked insurance broker or agent license be employed by a currently licensed insurance agent or broker to work in the insurance business?

Conclusion

A person whose license as an insurance agent or broker has been revoked may work in the insurance business only in accordance with N.Y. Ins. Law § 2111 (McKinney 2000).

Facts

The inquirer is in the process of purchasing an insurance business from an insurance broker whose insurance license was revoked, and the inquirer wants to employ this person at the inquirer’s insurance business once the sale is complete. The inquirer wants to know whether the inquirer may employ this person at the inquirer’s insurance agency.

Analysis

N.Y. Ins. Law § 2111(a)(2) (McKinney 2000), concerning revocation of licenses, states in relevant part:

No individual, corporation, partnership, association, firm or entity subject to the provisions of this chapter shall knowingly employ or appoint any person or entity whose license issued under this article has been revoked, or whose license to engage in the business of insurance in any capacity has been revoked . . . as an officer, director, manager, controlling person or for other services, without the prior written approval of the superintendent, unless such services are for maintenance or are clerical or ministerial in nature.

N.Y. Ins. Law § 2111(a)(4) (McKinney 2000) states in pertinent part that "[f]or the purpose of this section a "controlling person" is any person who or which, directly or indirectly, has the power to direct or cause to be directed the management, control or activities of such licensee. "

In conclusion, pursuant N.Y. Ins. Law § 2111 (McKinney 2000), without the prior approval of the Superintendent, the inquirer may employ the person whose license was revoked if the person’s duties will be limited to services that " . . . are for maintenance or are clerical or ministerial in nature." Otherwise, both the inquirer and the person must first obtain prior written approval from the Superintendent. If the Department is provided with a description of the proposed services, the Department can advise whether such services will require prior written approval of the Superintendent. The description may be sent to the attention of the Office of General Counsel at the address on the above letterhead of this opinion.

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