The Office of General Counsel issued the following opinion on November 4, 2005, representing the position of the New York State Insurance Department.
Re: Broker Business Card
May an independent licensed insurance agent who solicits, sells and services insurance contracts for "Insurance Agency A" mention on his/her business card that he/she is "affiliated with Agency A" if the independent licensed insurance agent is not an employee of, or under common control with, "Agency A"?
No. See analysis.
The inquirer is the sole owner of ABC Brokers and has a 50% partnership interest in DEF Brokerage. Both of these insurance agencies sell and service life, long term care, and disability insurance. The inquirer works with independent licensed insurance agents who solicit, sell, and service these insurance policies and want one of those agents to act as a wholesaler for both agencies mentioned above. The wholesaler will solicit outside insurance brokers to place their business through the inquirers agencies and, for this service, he will be compensated on a 1099 basis. The inquirer wants to know whether the wholesaler may mention on his business card that he is "affiliated with" the inquirers agency even though he is not an employee of either agency.
New York Insurance Law § 2101(b) (McKinney 2005) defines "independent insurance agent" as:
an "insurance agent" who is not owned or controlled by any insurer, fraternal benefit society or health maintenance organization or group of such insurers and whose agency agreement does not prohibit the representation of other insurers or groups of insurers and which provides that upon termination of the agreement the agents records and use and control of expirations remain the property of the agent. Only an "independent insurance agent" shall be represented to the public as an independent insurance agent or agency.
There is nothing in the New York Insurance Law that prohibits independent insurance agents or other agents or brokers from specifying affiliations that they may have with other licensed insurance entities on their business cards. However, the affiliation must be specifically stated and not so broad that it misleads the public by implying other legal relationships that do not exist. Accordingly, simply writing "affiliated with Agency A" on the business card of a 1099 agent who is not an employee of, or under common control with, "Agency A" but who merely acts as a wholesaler for "Agency A" is too broad and can imply legal relationships that do not exist.
For further information please contact Associate Attorney D. Monica Marsh at the New York City Office.