OGC Op. No. 10-09-01

The Office of General Counsel issued the following opinion on September 7, 2010 representing the position of the New York State Insurance Department.

Re: Insurance Producers Using an Alternate Title

Question Presented:

May a licensed insurance agent or broker use an occupational title in addition to the producer’s title of insurance agent or broker?

Conclusion:

Yes. Nothing in the Insurance Law proscribes a licensed insurance agent or broker from using an occupational title in addition to the producer’s title of insurance agent or broker. However, the insurance agent or broker should not use the title in a way that could mislead an insured or prospective insured; otherwise, the Superintendent of Insurance could find the producer to be acting in an untrustworthy manner within the meaning of N.Y. Ins. Law § 2110 (McKinney 2010).

Facts:

The inquiry is of a general nature, without reference to particular facts.

Analysis:

The inquirer asks whether an insurance agent or broker (i.e., insurance “producer”) may use the designation of “Risk Management Advisor” as a supplement to the title of “Insurance Broker” in the producer’s promotional materials.

No provisions of the Insurance Law or the regulations promulgated thereunder proscribe an insurance producer’s use of an additional occupational title. However, the insurance producer should take care not to use the title in a way that might mislead an insured or prospective insured, lest the Superintendent find that the producer is acting in an untrustworthy manner within the meaning of Insurance Law § 2110. For instance, if the insurance producer is soliciting insurance, the producer should disclose to the insured or prospective insured his or her status as an insurance producer. An insurance producer should also refrain from using a title that could lead an insured to believe incorrectly that the insurance producer has an expertise that the insurance producer does not in fact possess. Also, to the extent that the insurer agent or broker uses an additional occupational title because the individual has additional functions that exceed those permitted by the statutory licensing restrictions of an insurance agent or broker, the producer should avoid conflicts of interest between the duties the producer has as an insurance agent or broker and the duties that the producer has pursuant to the additional occupational title. See Opinion of Office of General Counsel (“OGC Opinion”) No. 04-06-08 (June 9, 2004).

In addition to the bars on untrustworthiness and conflict of interest, the producer should take heed of General Business Law § 349(a), which states that “[d]eceptive acts or practices in the conduct of any business, trade or commerce in the furnishing of any service in this state are hereby declared unlawful.” N.Y. Gen. Bus. Law § 349(a) (McKinney 2010). This statutory provision, which is enforced by the Attorney General of New York State, applies to insurance companies and their agents, and is intended to prevent the use of deceptive practices on a consumer. Riordan v. Nationwide Mut. Fire Ins. Co., 977 F.2d 47, 52 (2d Cir. 1992). An additional civil penalty for deceptive practices against the elderly (persons 65 years or older) may also be imposed against a violator. See N.Y. Gen. Bus. Law § 349-c (McKinney 2010).

Although this opinion calls attention to the General Business Law, as a formal matter this opinion is limited to an interpretation of the Insurance Law, and does not officially address whether the proposed arrangement may run afoul of any other law.

For further information you may contact Senior Attorney Brenda M. Gibbs at the Albany Office.