Source: http://www.dfs.ny.gov/insurance/ogco2011/rg110106.htm
Timestamp: 2014-11-23 20:57:25
Document Index: 254806217

Matched Legal Cases: ['§ 2114', '§ 2114', '§ 2114', '§ 2114', '§ 2114', '§ 2101', '§ 2102', '§ 2114', '§ 2114', '§ 2115', '§ 2114', '§ 12', '§ 7']

Purchase of Marketing List
OGC Op. No. 11-01-06
The Office of General Counsel issued the following opinion on January 28, 2011, representing the position of the New York State Insurance Department.
Re: Purchase of Marketing List
Does the mere sale of a contact list of supporters by a charity, foundation, or association to an insurance agent that is licensed in New York to sell accident and health insurance constitute a referral under New York Insurance Law § 2114 (McKinney Supp. 2010)?
No. The mere sale of a contact list of supporters by a charity, foundation, or association to an insurance agent that is licensed in New York to sell accident and health insurance does not constitute a referral under Insurance Law § 2114.
Insurance Law § 2114(a) permits an insurance agent that sells life and accident and health insurance to compensate a person, firm, association or corporation for making a referral to the insurance agent. 1 Insurance Law § 2114(a)(3) 2 and (4) read as follows:
The mere sale of a list of supporters by a charity, foundation, or association to an insurance agent does not constitute a “referral” under Insurance Law § 2114(a)(4), because the non-licensee has not made a “referral” or recommendation to its supporters to purchase insurance from the agent. Nor has the non-licensee, in merely selling its list of supporters, acted as an insurance agent under Insurance Law § 2101 (i.e., procuring, soliciting, or selling insurance), for which a license would otherwise have been required under Insurance Law § 2102.
Because the mere sale of a list of supporters to an insurance agent, who will solicit long term care insurance to those supporters, does not constitute a referral under Insurance Law § 2114(a)(4), the insurance agent may compensate the charity, foundation, or association based on the actual purchase of insurance. Thus, the price of such list may be based upon a percentage of sales made to supporters named on the list. See Office of General Counsel Opinion (“OGC Op.”) Nos. 10-01-03 (January 6, 2010), 03-09-07 (September 9, 2003) and 01-03-16 (March 21, 2001), and the Insurance Department’s Circular Letter No. 5 (2001). If, however, the sale of the list is accompanied by the charity, foundation, or association making a referral or recommendation to purchase insurance from the insurance agent, or other similar affirmative act, then the price of the list may not be based on a percentage of sales, pursuant to Insurance Law § 2114(a)(1). See OGC Op. No. 02-04-33 (April 29, 2002).
1 Insurance Law §§ 2115 and 2116 contain similar requirements with respect to property/casualty insurance agents and insurance brokers, respectively.
2 Although Insurance Law § 2114(a)(4) is deemed repealed effective September 10, 2011, pursuant to L.2000, c. 418, § 12, and L.1997, c. 3, § 7, we expect that the Legislature will extend it again, as it has several times in the past.