OGC Op. No. 10-11-11
The Office of General Counsel issued the following opinion on November 24, 2010 representing the position of the New York State Insurance Department.
Re: Sample Term Life Insurance Premium Quotes Provided on an Agent’s Internet Website
May an insurance agent or broker display sample term life rates for life insurance on the producer’s website without specifying the insurer that is the source of the rates?
No. An insurance agent or broker may not display sample term life rates for life insurance on the producer’s website without specifying which insurer is the source of the sample rates. N.Y. Ins. Law § 2122(b) (McKinney 2006) requires that a producer whose advertisement refers to an insurer must include in that advertisement the full name of the insurer that is the source of the rates, and the location of the insurer’s principal office.
The inquiry is of a general nature, without reference to specific facts.
As a preliminary matter, the New York State Insurance Department (the “Department”) assumes that the inquirer only represents insurers that are authorized to do an insurance business in New York.
N.Y. Ins. Law § 2122(b) (McKinney 2006) is germane to the inquiry, and states in pertinent part:
Every agent of an insurer and every insurance broker shall, in all advertisements, . . . which refer to an insurer, set forth therein the name in full of the insurer referred to and the name of the city, town or village in which it has its principal office in the United States. (Emphasis added).
Thus, in any advertisement in which an insurance agent or broker refers to an insurer, the agent or broker must disclose the name of the insurer and the location of the insurer’s principal office.
An insurance agent’s or broker’s advertisement that refers to specific premium rates must necessarily refer to a particular insurer, which in turn triggers the disclosure requirements of the statute – requiring the full name of the insurer and the address of the insurer’s principal office. See Opinion of Office of General Counsel No. 04-06-09 (June 10, 2004) (statements in an advertisement that specify a specific amount of premium savings necessarily refer to an insurer). To conclude otherwise would be antithetical to the purposes of the statute. Indeed, if an insurance agent or broker were to advertise premium rates that are not available from one of the insurers the agent or broker represents, the agent or broker would be misleading or deceiving insureds or potential insureds by offering illusory quotes, an act the Superintendent of Insurance may deem as untrustworthy within the meaning of Insurance Law § 2110.
This opinion is limited to an interpretation of the Insurance Law. The Department expreses no opinion about any other law, including whether the proposed arrangement could run afoul of Penal Law §190.20, which states in pertinent part:
A person is found guilty of false advertising, when, with intent to promote the sale or to increase the consumption of property or services, he makes or causes to be made a false or misleading statement in any advertisement . . . .
For further information you may contact Senior Attorney Brenda M. Gibbs at the Albany Office.