The Office of General Counsel issued the following opinion on December 17, 2004, representing the position of the New York State Insurance Department.

RE: Bond-posting requirement under § 1213(c)(1)(A)

Questions Presented:

(1)  Does the Insurance Department maintain a list of unauthorized insurers that it has certified under N.Y. Ins. Law § 1213(c)(1)(A) (McKinney 2000) as having sufficient assets to avoid the bond-posting requirement?

(2)  What is the process for applying for such certification?

(3)  Generally speaking, do credit for reinsurance or excess line trusts satisfy this requirement?


(1 & 2)  No.  The questions as posed reflect a misunderstanding of the statute, N.Y. Ins. Law § 1213(c)(1)(A) (McKinney 2000), as indicated in the analysis below.  There is no such certification function by the Department; hence, there is no process to apply to be certified.

(3)  The inquirer was directed to review N.Y. Comp. Codes R. & Regs. tit. 11, § 79.1-79.9 concerning Letters of Credit (Regulation 133); § 125.1-125.8 concerning Credit for Reinsurance from Unauthorized Insurers (Regulation 20); § 126.1-126.8 concerning Trust Agreements (Regulation 114); and  § 27.15 concerning the only reasons an excess line insurer’s trust fund may provide disbursements (2003) (Regulation 41).  Moreover, proceedings against unauthorized foreign or alien insurers, including unauthorized reinsurers, arising out of insurance policies effectuated in accordance with N.Y. Ins. Law §§ 2117(b) or (c) or 2105 (McKinney Supp. 2004) where the insurance contract designates the Superintendent to be served with legal process on behalf of such insurer, are exempt from § 1213 pursuant to subparagraph (e).


None were provided.


There is no absolute right to avoid bond-posting requirements under N.Y. Ins. Law § 1213(c)(1) (McKinney 2000) because the statute clearly allows the court the discretion as to whether to permit an unauthorized insurer to dispense with filing a bond.  Therefore, the court may demand such a filing of a bond by an insurer in any proceeding against it.  The statute provides:

(c)(1)  Before any unauthorized foreign or alien insurer files any pleading in any proceeding against it, it shall either:

(A)  deposit with the clerk of the court in which the proceeding is pending, cash or securities or file with such clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure payment of any final judgment which may be rendered in the proceeding, but the court may in its discretion make an order dispensing with such deposit or bond if the superintendent certifies to it that such insurer maintains within this state funds or securities in trust or otherwise sufficient and available to satisfy any final judgment which may be entered in the proceeding,…

An unauthorized foreign or alien insurer from which an excess line broker procures insurance must establish and maintain a trust fund pursuant to N.Y. Comp Codes R. & Regs. tit. 11, § 27.14 (2003) (Regulation 41), comply with the other relevant requirements of Regulation 41, and be considered as an eligible insurer by the Superintendent within the meaning of N.Y. Ins. Law §§ 2118 and 2130 (McKinney Supp. 2004).

The inquirer was directed to consult the list of eligible insurers maintained by the Excess Line Association of New York ("ELANY"), on its web site at

Additionally, the Department's Property Bureau maintains a list of accredited reinsurers referred to in § 125.7 of Regulation 20. This information can also be accessed through the Department's website located at

N.Y. Ins. Law § 1213(e) (McKinney 2000) provides:

This section shall not apply to any proceeding against any unauthorized foreign or alien insurer arising out of any contract of insurance effectuated in accordance with subsection (b) or (c) or section two thousand one hundred seventeen of this chapter or in accordance with section two thousand one hundred five of this chapter where such contract designates the superintendent or his successors in office the insurer's true and lawful attorney upon whom may be served all lawful process in any proceeding instituted by or on behalf of an insured or beneficiary arising out of such contract.

For additional information, see the case law on § 1213 cited in Wolcott B. Dunham, Jr., New York Insurance Law § 7.09 (2003).

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