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 opinion on October 21, 2005, representing the position of the New York State Insurance Department.

RE: Agent Charging Fee for Insufficient Check Charges

Question Presented:

May an insurance agent charge its client a fee to reimburse the agent for an insufficient check charge as a result of a check that is dishonored by the bank?

Conclusion:

No, an insurance agent may not charge an additional fee for an insufficient check charge as a result of a dishonored check.

Facts:

This is a general inquiry.

Analysis:

There is no statute that allows an insurance agent to charge a fee for its services. The only fee an insurance agent may charge an insured is a consulting fee pursuant to N.Y. Ins. Law § 2119(a) (McKinney 2000 & 2005 Supp.) for consulting services, which are not the kind of service inquired about. The Department has previously opined on this matter (see OGC opinion # 02-01-06).

The insurance agent does have the option of not accepting checks in the first place. There is no statute that requires an agent to accept checks as a method of payment.

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