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 April 5, 2006, representing the position of the New York State Insurance Department.

RE: California Insurance Policy Covers NY Risk

Question Presented:

Must an insurance agency licensed in California become licensed in New York if its California client includes a sales office in New York on its California insurance policy covering both its California headquarters and its New York employees with Workers’ Compensation insurance?

Conclusion:

No. Any solicitation, negotiation, sale and delivery of insurance in this transaction occurred or will occur in California, not New York. The Workers’ Compensation coverage for New York employees is issued by an insurer authorized to write such insurance in New York.

Facts:

An agency is licensed as a fire and casualty insurance producer and surplus lines producer in California. The insured is domiciled in California and all transactions with the insured have occurred in California. There has been, and there is no intention to, insurance activity in New York. The president of the agency has recently become licensed in New York as an individual non-resident property/casualty insurance agent pursuant to N.Y. Ins. Law § 2103(b) (McKinney Supp. 2006) and as an individual non-resident insurance broker pursuant to N.Y. Ins. Law § 2104 (McKinney Supp. 2006). The president has also applied to become a non-resident sublicensee of the agency in New York, which application is pending. Since the policy in question provides Workers’ Compensation coverage for New York employees, it is assumed that it complies with the New York Workers’ Compensation Law. The insurer is authorized to write such insurance in New York.

Analysis:

All of the transactions with the insured, including solicitation, negotiation, sale and delivery of the policy, have occurred in California. No insurance policy was solicited, negotiated, sold or delivered in New York and no New York insurance activities have occurred. Therefore, a New York producer insurance license for this California transaction is not required. However, since the agency’s president has become licensed in New York, when the corporate agency becomes licensed in New York, the agency would be permitted to engage in insurance activities in New York.

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