N.Y. ISC Law § 2324 — New York Code / Act ISC / Article 23 / Section 2324
Rebating and discrimination
Status: in_force

§ 2324. Rebating and discrimination. (a) No authorized insurer, no\nlicensed insurance agent, no licensed insurance broker, and no employee\nor other representative of any such insurer, agent or broker shall make,\nprocure or negotiate any contract of insurance other than as plainly\nexpressed in the policy or other written contract issued or to be issued\nas evidence thereof, or shall directly or indirectly, by giving or\nsharing a commission or in any manner whatsoever, pay or allow or offer\nto pay or allow to the insured or to any employee of the insured, either\nas an inducement to the making of insurance or after insurance has been\neffected, any rebate from the premium which is specified in the policy,\nor any special favor or advantage in the dividends or other benefit to\naccrue thereon, or shall give or offer to give any valuable\nconsideration or inducement of any kind, directly or indirectly, which\nis not specified in such policy or contract, other than any valuable\nconsideration, including but not limited to merchandise or periodical\nsubscriptions, not exceeding twenty-five dollars in value, or shall\ngive, sell or purchase, or offer to give, sell or purchase, as an\ninducement to the making of such insurance or in connection therewith,\nany stock, bond or other securities or any dividends or profits accrued\nthereon, nor shall the insured, his agent or representative knowingly\nreceive directly or indirectly, any such rebate or special favor or\nadvantage, provided, however, a licensed insurance agent or a licensed\ninsurance broker may retain the usual commission or underwriting fee on\ninsurance placed on his own property or risks, if the aggregate of such\ncommissions or underwriting fees will not exceed five percent of the\ntotal net commissions or underwriting fees received by such licensed\ninsurance agent or insurance broker during the calendar year.\n  (b) Within the meaning of subsection (a) hereof, the sharing of a\ncommission with the insured shall be deemed to include any case in which\na licensed insurance agent or a licensed insurance broker which is a\nsubsidiary corporation of, or a corporation affiliated with, any\ncorporation insured, received commissions for the negotiation or\nprocurement of any policy or contract of insurance for the insured.\n  (c) This section shall not prohibit any insurer from equitably\ndistributing to its policyholders dividends payable from surplus on\nearned premiums, nor prohibit the return at any time during the term or\nat the termination of the contract of insurance of dividends, savings or\nthe unused or unabsorbed portion of premiums and premium deposits to\npolicyholders of a mutual insurer or to subscribers of a reciprocal\ninsurer, nor prohibit any insurer or insurance agent from paying\ncommissions to a licensed insurance broker for negotiating a policy or\ncontract of insurance, nor prohibit any licensed insurance broker from\nsharing or dividing a commission earned or received by him with any\nother licensed insurance broker or brokers who shall have aided him in\nrespect to the insurance for the negotiation of which the commission has\nbeen earned or paid.\n  (d) This section shall not prohibit the making of temporary contracts\nof insurance, either by temporary binders or other memoranda, if the\npremium applicable to the insurance shall be due and shall be paid for\nthe time during which the insurance is in force by virtue of the\ntemporary contract.\n  (e) This section shall not apply to any policy or contract of\nreinsurance nor to any contract or policy of life insurance, accident\ninsurance or health insurance which is subject to the provisions of\nsection four thousand two hundred twenty-four of this chapter, nor to\nany contract or policy of marine insurance, other than contracts or\npolicies of automobile insurance, or of marine protection and indemnity\ninsurance, nor to any insurance contract, or rate of insurance in\nconnection with any insurance contract either against loss or damage to,\nor legal liability in connection with, any property located wholly\noutside of this state or any activity carried on outside of this state\nor any motor vehicle or aircraft principally garaged and used outside of\nthis state.\n  (f) Any person or corporation violating the provisions of this section\nshall, in addition to all other penalties provided by law, pay to the\npeople of this state as a penalty the sum of five hundred dollars for\neach such violation.\n