OGC Op. No. 10-09-08
The Office of General Counsel issued the following opinion on September 17, 2010, representing the position of the New York State Insurance Department.
RE: Compliance Requirements of Insurance Law
§ 6402 and Notification to the New York State Insurance Department Regarding Board of Directors Membership Changes
1. Must a foreign title insurance corporation comply with the board membership requirements of N.Y. Insurance Law
2. What does the New York Insurance Law require foreign title insurance corporations to submit to the Department when there is a change in the insurance company’s board membership?
1. No, a foreign title insurance corporation does not need to comply with the board membership requirements of Insurance Law
2. A foreign title insurance corporation must submit an NAIC Form 11 Biographical Affidavit of any incoming director to the Property Bureau of the Department.
The inquiry is of a general nature, without reference to particular facts.
A. Foreign Insurance Corporations Do Not Need to Comply with Insurance Law
The inquirer asks whether a foreign title insurance corporation must comply with the board membership requirements set forth in Insurance Law
“In the organization of any such corporation the provisions of section one thousand two hundred one of this chapter shall be superseded or supplemented by the following provisions:
. . .
(e) [A title insurance corporation’s] directors shall be natural persons, not less than seven in number, all citizens of the United States, a majority of whom shall be citizens and residents of this state at the time of their election and during their continuance in office.”
However, pursuant to Insurance Law
B. Foreign Insurance Corporations Must Provide the Department with a Biographical Affidavit When There Is a Change in Their Board of Directors’ Membership
The inquirer also asks what information a foreign title insurance corporation must provide to the Department when directors or board members of the corporation change. Although the Insurance Law does not expressly address this question, under Insurance Law § 201, the Superintendent has the “rights, powers and duties . . . expressed or reasonably implied by” the Insurance Law. With reference to Insurance Law
The purpose of requiring these documents is to enable the Department to ascertain whether an officer or director of an insurance corporation licensed in this state has been convicted of any crime involving acts of fraud, dishonesty, moral turpitude or untrustworthiness. See Insurance Department Circular Letter No. 6 (2001) (referencing the Insurance Department’s requirement for submission of a biographical questionnaire and fingerprints by licensed insurance corporations). Therefore, when there is a change in the board membership of a foreign title insurance corporation, the corporation must submit an NAIC Form 11 Biographical Affidavit for any incoming board members to the following address:
New York State Insurance Department
25 Beaver Street
New York, NY 10004
For further information you may contact Supervising Attorney D. Monica Marsh at the New York City office.
1 “Foreign insurer” means an insurance corporation organized in a state other than New York, whereas an insurance corporation organized outside of the United States is an “alien insurer” under Insurance Law § 107(a)(5).
2 The Biographical Affidavit can be found on NAIC’s website at: http://www.naic.org/documents/industry_ucaa_form11.pdf.