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Allows Consumers and Insurers to Take Full Advantage of the Opportunities on the Internet

Superintendent of Insurance Neil D. Levin today announced that the Department has issued guidance to the industry concerning the application of the New York Insurance Law to insurance advertisements, referrals, and solicitations on the Internet. The Superintendent also encouraged New York’s insurance consumers to make full use of the information that can be gathered through use of the worldwide web.

"E-commerce holds enormous potential for both economic expansion and consumer convenience. As the Department continues to encourage and promote the use of electronic commerce, it is vital that we provide guidance to the industry," Levin said. "The number of insurers, agents, and brokers who are advertising and offering their products and services on the Internet has grown rapidly and this growth requires guidelines that will safeguard New York State consumers."

The Department, in Circular Letter No.5, provides specific guidance to the insurance industry with regard to advertisements, referrals, and solicitations over the Internet. General guidelines include:

Advertisements- Merely operating a web site that contains information about specific insurance products or services that is accessible to New York’s consumers is not considered solicitation under New York Insurance Law. A web site that merely contains advertisements for insurance products or services also does not constitute solicitation. Advertisements for insurance products or services that are not being offered by a New York authorized insurer should indicate that such products are not available in all states. Non-licensees hosting such advertisements on their web sites may receive compensation calculated in any manner as long as the advertisement does not contain endorsements, promotions, or recommendations of the non-licensee concerning the insurance products. Such endorsements are referrals.

Referrals- Referrals by non-licensees to New York State licensed insurance agents or brokers are permitted under a recent change in New York law, provided that there is no discussion of specific insurance policy terms and conditions and the compensation to the non-licensees for the referral is not based upon the purchase of insurance by the referred person. Referrals may not direct consumers who are New York State residents to products or services of unlicensed agents or brokers.

Solicitations - Insurers, agents, and brokers that maintain web sites where the solicitation of insurance takes place must be licensed, and commissions for such solicitation may only be paid to licensees. Web sites of non-licensees must prevent insurance transactions with New York residents.

"We will continue to carefully evaluate these issues so as to protect the rights of consumers while enabling our licensees to take full advantage of Internet capabilities to provide insurance to State residents," added Levin.

The Circular Letter is available on the Department’s Web site at

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