OGC Op. No. 08-07-26
The Office of General Counsel issued the following opinion on July 30, 2008, representing the position of the New York State Insurance Department.
RE: Wellness Program offer on insurance broker’s website
1. May a licensed insurance broker’s website provide a link to a third-party company’s “free” wellness program if the link may be accessed by anyone, not just individuals or entities who have purchased insurance through the broker, without running afoul of N.Y. Ins. Law § 4224(c) (McKinney 2006)?
2. Would a broker be required to include the wellness program offer in all insurance policies sold by the broker, pursuant to Insurance Law § 4224, in order to lawfully maintain a link to a free wellness program offer on the broker’s website?
1. Yes. A broker may offer non-insurance related services such as a wellness program, provided that the broker, as well as the wellness program provider, do not limit the offer to purchasers of insurance, require that recipients of the wellness program also purchase insurance or otherwise induce the recipients to purchase insurance, receive an insurance quote, or require the recipients to fulfill any other similar conditions related to insurance.
2. No. If the wellness program is offered as described above, the broker need not include the wellness program offer in insurance policies sold by the broker pursuant to Insurance Law § 4224.
The inquirer represents a licensed insurance broker who is interested in providing a link on the broker’s website to a free wellness program that is maintained by a third-party company with whom the broker has a “relationship.” The inquirer asserts that because wellness programs have gained increased popularity in the corporate arena as a means to recognize and treat work-related health hazards, wellness programs have “trickled over into corporate insurance programs and related premiums.” As such, brokers have begun offering free wellness programs in connection with the sale of insurance. The inquirer states that the client would like to follow suit, but asks whether the offer of a free wellness program is an “unlawful inducement” under Insurance Law § 4224, or departs from precedents set in previously issued Office of General Counsel (“OGC”) opinions, namely, OGC Opinion Nos. 02-08-02 (Aug. 5, 2002), 03-06-14 (June 6, 2003), 04-06-02 (June 7, 2004) and 05-08-04 (Aug. 3, 2005).
The inquirer also reports that the broker would place a link on his/her/its main website to access the wellness program. Access will not be limited to individuals or employees of the companies who have obtained insurance products through the broker; instead, anyone visiting the broker’s website will be able to gain access to the wellness program link. As such, the inquirer asks whether the wellness program as described above comports with Insurance Law § 4224(c), and if so, whether the wellness program offer must be included in insurance policies sold by the broker.
In response to the Department’s request for further information on the wellness program, the inquirer reports that the program is “entirely web-based,” and that anyone visiting the client’s website will be able to take advantage of the benefits offered by the wellness program. The inquirer also states that the wellness program provider requires the completion of a questionnaire to determine the individual’s potential health risks. The wellness program provider would in turn offer lessons on how to minimize those risks and also provide information on general health issues.
Further, the inquirer reports that the broker has not yet entered into a contractual relationship with the wellness program provider, because to do so will depend on whether the wellness program offer is permissible under the Insurance Law. If the broker lawfully may offer the wellness program on the broker’s website, the broker and the company will enter into an annual contract whereby the broker will pay the wellness program provider a flat fee in twelve monthly installments. Payment will not be contingent upon whether anyone actually visits the wellness program provider’s website.
Insurance Law § 4224 prohibits rebating and inducements by life, accident and health insurers, agents and brokers. Insurance Law § 4224(c) reads as follows:
No such life insurance company and no such savings and insurance bank and no officer, agent, solicitor or representative thereof and no such insurer doing in this state the business of accident and health insurance and no officer, agent, solicitor or representative thereof, and no licensed insurance broker and no employee or other representative of any such insurer, agent or broker, shall pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to any person to insure, or shall give, sell or purchase, or offer to give, sell or purchase, as such inducement, or interdependent with any policy of life insurance or annuity contract or policy of accident and health insurance, any stocks, bonds, or other securities, or any dividends or profits accruing or to accrue thereon, or any valuable consideration or inducement whatever not specified in such policy or contract; nor shall any person in this state knowingly receive as such inducement, any rebate of premium or policy fee or any special favor or advantage in the dividends or other benefits to accrue on any such policy or contract, or knowingly receive any paid employment or contract for services of any kind, or any valuable consideration or inducement whatever which is not specified in such policy or contract.
Insurance Law § 2324(a), which prohibits rebating and inducements with respect to property/casualty insurance, contains a similar provision. However, Insurance Law § 2324(a) permits a licensee to give an article of merchandise or “keepsake” not exceeding fifteen dollars in retail value, without including the “keepsake” in the policy. Insurance Law § 4224 contains no such exception.
Under the facts presented, the presence of a link to a free wellness program on the broker’s website does not create an unlawful inducement proscribed by Insurance Law § 4224, as long as access to the wellness program’s free services is not contingent upon the purchase of insurance policies sold by the broker or the solicitation thereof by either the broker or the wellness program provider, or limited to the broker’s clients. See OGC Opinion No. 04-06-02 (June 7, 2004).
For further information you may contact Senior Attorney Camielle A. Campbell at the New York City office.