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 February 21, 2006, representing the position of the New York State Insurance Department.

Re: Agency Appointment

Question Presented:

If an insurer appoints an insurance agency, must the insurer also appoint the insurance agents licensed individually and not as sub-licensees who are employed by the agency, in order for them to sell insurance on behalf of the insurers?

Conclusion:

Yes, under N.Y. Ins. Law § 2112(a), if an insurer appoints an insurance agency, the insurer must also appoint the insurance agents licensed individually and not as sub-licensees who are employed by the agency, in order for them to sell insurance on behalf of the insurer.

Facts:

No specific fact pattern was presented.

Analysis:

N.Y. Ins. Law § 2112(a) (McKinney Supp. 2006) states in relevant part:

Every insurer, fraternal benefit society or health maintenance organization doing business in this state shall file a certificate of appointment in such form as the superintendent may prescribe in order to appoint insurance agents to represent such insurer, fraternal benefit society or health maintenance organization.

A certificate of appointment names a licensed insurance agent that an authorized insurer permits to "represent such insurer."1   The agent must be licensed for the same line of insurance as is the insurer. Under N.Y. Ins. Law § 2114(a) and § 2115(a) (McKinney Supp. 2006), no insurer may pay any commission or other compensation to any person, firm, or corporation except to a licensed insurance agent of such insurer.

Under Ins. Law § 2103(c) (McKinney Supp. 2006), if a person is a member of a licensed firm or association or is an officer or director of a licensed corporation, that person may be named in the license as a sub-licensee of the insurer.2   When an agency is appointed to represent an insurer for a specific line of insurance, all the sub-licensees for that line of insurance are also appointed. Separately appointing these sub-licensees is not required.

However, for an agent licensed individually who is employed by an agency, but is not a sub-licensee, the insurer must file a certificate of appointment, prior to that person acting on such insurer’s behalf. An insurer would not be in compliance with N.Y. Ins. Law § 2112(a) (McKinney Supp. 2006) by simply filing a certificate of appointment for the insurance agency for which an agent licensed individually works.

For further information you may contact Senior Attorney Elizabeth Barrett at the New York City Office.


1  See also N.Y. Ins. Law § 2103(m) (McKinney Supp. 2006) that states in relevant part:

“An agent appointed for an insurer authorized to transact business in this state may transact business for any subsidiaries or affiliates of said insurer that are licensed in this state for the same line or lines of insurance without such insurers submitting additional appointments, provided a certified copy of a resolution adopted by the board of directors of each of the insurers requesting such authority is filed with the superintendent by each of the insurers and renewed and refiled whenever deemed necessary by the superintendent…”

2   See N.Y. Ins. Law § 2103(c) (McKinney Supp. 2006) that states in relevant part:

Any such license issued to a firm or association shall authorize only the members thereof, named in such license as sub-licensees, to act individually as agents thereunder, and any such license issued to a corporation shall authorize only the officers and directors thereof, named in such license as sub-licensees, to act individually as agents thereunder. Every sub-licensee, acting as insurance agent pursuant to such a license shall be authorized so to act only in the name of the licensee.