NY Ins L § 2117 (2021)
2021 New York Laws ISC - Insurance Article 21 - Agents, Brokers, Adjusters, Consultants and Intermediaries 2117 - Acting for or Aiding Unlicensed or Unauthorized Insurers or Health Maintenance Organizations.

§  2117.  Acting  for or aiding unlicensed or unauthorized insurers or health maintenance organizations. (a) No person,  firm,  association  or corporation  shall  in this state act as agent for any insurer or health maintenance organization which is not licensed or authorized  to  do  an insurance  or health maintenance organization business in this state, in the doing of any insurance or health maintenance  organization  business in  this  state  or  in  soliciting,  negotiating  or  effectuating  any insurance, health maintenance organization or annuity contract or  shall in  this  state act as insurance broker in soliciting, negotiating or in any way effectuating any insurance, health maintenance  organization  or annuity  contract  of,  or  in  placing  risks with, any such insurer or health maintenance organization, or shall in this state in  any  way  or manner  aid  any  such  insurer  or  health  maintenance organization in effecting any insurance,  health  maintenance  organization  or  annuity contract.  (b)  Notwithstanding  the  provisions  of  subsection  (a) hereof, any insurance broker licensed under subparagraph (B)  of  paragraph  one  of subsection  (b) of section two thousand one hundred four of this article may negotiate a contract of insurance, or place insurance, in an insurer not authorized to do business in this state, as follows:  (1) a contract of reinsurance on risks produced by such broker;  (2) insurance against loss of or damage to property having a permanent situs outside of this state; and  (3) marine insurance of the following  kind  or  kinds,  where  it  is reasonable  so  to  do with due regard to the interests of all concerned and whether or not, at the time of such negotiation, the subject  matter of such insurance is within or without this state:  (A)  insurance against perils of navigation, transit or transportation upon hulls, freights or disbursements,  or  other  shipowner  interests, goods,  wares, merchandise and all other personal property and interests therein, in course of exportation from or importation into any  country, or  transportation  coastwise, including transportation by land or water from point of origin to final destination and including  war  risks  and marine builders' risks; and  (B)  insurance  in  connection with ocean going vessels against any of the risks specified in paragraph twenty-one of subsection (a) of section one thousand one hundred thirteen of this chapter.  (c) Notwithstanding the  provisions  of  subsection  (a)  hereof,  any insurance  broker  licensed  under  subparagraph (B) of paragraph one of subsection (b) of section two thousand one hundred four of this  article may  negotiate  a  contract  of  insurance  or  place  insurance  in  an unauthorized insurer as follows:  (1) insurance against legal liability arising out  of  the  ownership, operation  or  maintenance  of  any  motor  vehicle or aircraft which is neither principally garaged nor principally used in this state,  arising out  of  any activity carried on wholly outside of this state or arising out of the ownership, operation or maintenance of any property having  a permanent situs outside of this state, but in case such property or risk is  located in any other state, then only in an insurer authorized to do such business in such state  or  in  an  insurer  in  which  a  licensed insurance broker of such state may lawfully place such insurance; and  (2)  fidelity  bonds  guaranteeing  the fidelity of persons holding or exercising positions of public or private trust wholly outside  of  this state,  and surety bonds guaranteeing or assuming the performance of any contract or other obligation of the kind  included  under  subparagraphs (B)  and  (C)  of  paragraph  sixteen  of  subsection (a) of section one thousand one hundred thirteen of this chapter, to  be  performed  wholly outside  of  this  state; but if such positions are held or exercised in  another state or if such contract or other obligation is to be performed wholly or partly in another state, then only if such insurance is placed in an insurer authorized to do such business in such state, or in  which a licensed broker of such state may lawfully place such insurance.  (d)  Notwithstanding  the  provisions  of  subsection  (a) hereof, any licensed  reinsurance  intermediary  may   negotiate   a   contract   of reinsurance,  or  place  reinsurance, in an insurer not authorized to do business in this state.  (e) This section shall not authorize any person, firm, association  or corporation to guarantee or otherwise validate or secure the performance or  legality  of  any  agreement,  instrument  or policy of insurance or annuity contract of any insurer not authorized to do  business  in  this state,   or   to  bind  risks,  validate,  effect  by  countersignature, endorsement or otherwise, any  binder,  memorandum,  cover  note,  slip, certificate,  policy or other instrument of insurance of any insurer not authorized or licensed to do business in this state, or to make  binding declarations  of risks thereunder, or permit any unauthorized insurer to do any insurance business by its agent acting  within  this  state;  but licensed  insurance  brokers  acting pursuant to subsections (b) and (c) hereof may  issue  to  their  clients,  the  insureds,  confirmation  of insurance so lawfully placed.  (f)  This  chapter  shall  not  prohibit  or  prevent  an attorney and counsellor  at  law  from  representing  an  unauthorized   insurer   in litigation or settlement of claims in this state.  (g)  Any  person,  firm,  association  or  corporation  violating  any provision of this section  shall,  in  addition  to  any  other  penalty provided  by  law,  forfeit  to  the people of the state the sum of five hundred dollars for each transaction.  (h) (1) This section shall not prohibit any person, firm,  association or  corporation  from acting within the scope of the authority conferred by section two thousand one hundred five of this article.  (2)  Notwithstanding  subsection  (a)  of  this  section,  a  licensed insurance  broker  may  deliver  to  the  insured an insurance policy or contract procured by any person, firm, association or corporation acting pursuant to the authority conferred by section two thousand one  hundred five of this article.  (3)  Notwithstanding  subsection  (a)  of  this  section and any other provision of law to  the  contrary,  any  excess  line  broker  licensed pursuant  to  section  two thousand one hundred five of this article may exercise binding authority and execute an authority to bind coverage  on behalf  of  an insurer not licensed or authorized to do business in this state pursuant to the  provisions  of  subsection  (f)  of  section  two thousand one hundred eighteen of this article.  (i) Notwithstanding subsection (a) of this section, a licensed insurer may  provide,  from  its  office  in  the state, services to support the insurance  business  of  an  unauthorized  insurer  with  which  it   is affiliated,  provided  that  the  unauthorized insurer has satisfied all applicable requirements for placements by excess  line  brokers  as  set forth in section two thousand one hundred eighteen of this article. Such services  may include, but shall not be limited to, computer operations, clerical and staffing support, underwriting, negotiating contract terms, quoting premiums, binding coverage, drafting and  issuing  policies  and claims  handling,  investigation  and  payment,  among  other incidental services. Services expressly prohibited under this section  include  the marketing,   soliciting  or  advertising  by  the  unauthorized  insurer directly to policyholders. Notwithstanding paragraph two  of  subsection (a) of section two thousand one hundred twenty-two of this article, such unauthorized insurers shall be permitted to advertise to, and market and  solicit  through,  excess  line brokers licensed pursuant to section two thousand one hundred five of this article, from  an  office  within  the state.  All obligations of such licensee under this article shall remain in full force and effect. Any document issued by an unauthorized insurer that  indicates  any location within this state in which it conducts its operations shall include a prominent notice  that  the  insurer  is  not licensed  by the state of New York, in no smaller than 10 point type, in accordance with regulations as may be promulgated by the superintendent.  (j) Nothing in this section shall prohibit  a  person  who  is  not  a resident  of  this  state  from  selling,  soliciting  or  negotiating a property/casualty insurance contract of an insurer not authorized to  do business in this state, provided that: (1) the insured's home state is a state  other  than  this  state; and (2) the person is licensed to sell, solicit or negotiate excess line insurance in the insured's home state.  (k)(1) Notwithstanding subsection (a) of this section,  any  insurance broker  licensed  under  subparagraph (A) of paragraph one of subsection (b) of section two thousand  one  hundred  four  of  this  article  with respect  to  life  insurance  or  annuities,  subparagraph (A) or (B) of paragraph one of subsection (b) of such section with respect to accident and health insurance, or subparagraph (B) of this paragraph with respect to property/casualty insurance may engage in the activities specified in paragraph two of this subsection with respect to an  alien  insurer  not authorized to do an insurance business in this state, provided that:  (A) the activities relate to a policy or contract of group life, group annuity,  group  accident  and  health  insurance,  or property/casualty insurance  where  the  policyholder  or  proposed  policyholder   is   a multinational  entity  resident outside the United States, the policy or contract covers  the  multinational  entity's  liabilities,  properties, employees  and  their  dependents,  and  the  liabilities  arise, or the properties and employees reside outside of  the  United  States,  except that  the  policy  or contract may provide coverage to employees who are temporarily inside the United States;  (B) the policy or contract shall not be underwritten or negotiated  in this state or issued or delivered in the United States;  (C) the alien insurer is authorized to transact the kinds of insurance business  in  the  jurisdictions where the policies or contracts will be issued or  delivered  and  the  policies  or  contracts  are  issued  in conformance with the laws of such jurisdictions;  (D)  before  engaging  in any of the activities specified in paragraph two of this subsection, the licensed insurance broker  provides  written notice  to  the  multinational  entity  that  the  alien  insurer is not licensed in or authorized to do business in this state;  the  policy  or contract  is  not  protected  by  the New York state guaranty funds; the policy or contract has not been approved by the superintendent; and  the policy or contract may not be subject to all of the laws of this state;  (E) the alien insurer shall not maintain any office in this state; and  (F)  except  as  specifically  provided  in this section, the licensed insurance broker shall not call attention to the alien  insurer  by  any advertisement or public announcement in this state.  (2)  Subject  to  paragraph  one  of  this  subsection,  the  licensed insurance broker  may  engage  in  this  state  in  only  the  following activities with respect to the alien insurer:  (A)  provide information to the multinational entity with respect to a policy or contract of group life,  group  annuity,  group  accident  and health  insurance,  or  a  property/casualty  insurance policy issued or delivered or that will be issued or delivered by the alien insurer;  (B) meet and discuss insurance needs with  the  multinational  entity, including  providing  information  directly  to  the entity in person or  otherwise about the policies or contracts offered by the alien  insurer; and  facilitating  introductions  with  the multinational entity's human resources  and  benefits  manager  in  each   country   in   which   the multinational entity has employee benefit needs;  (C)  refer  the  multinational entity to the alien insurer and provide information to the multinational entity about the alien insurer;  (D) respond to requests for  information  by  representatives  of  the multinational  entity concerning quotes and any other specific terms and conditions of a group life, group annuity,  group  accident  and  health insurance,  or  property/casualty  insurance  policy  or  contract being negotiated in the jurisdiction where the  policy  or  contract  will  be issued or delivered by the alien insurer;  (E)  provide  information  concerning renewals of existing policies or contracts of group  life,  group  annuity,  group  accident  and  health insurance,  or  a property/casualty insurance policy issued by the alien insurer; and  (F) manage the employee benefits program of the multinational  entity, including  aggregating  and  reporting  employee  benefits and financial information about the program.  (3) Any activity in which a licensed  insurance  broker  engages  with respect  to an alien insurer pursuant to this subsection shall be deemed to be included within the meaning of "any other transaction of business" for the purposes of section one thousand two hundred  thirteen  of  this article.  (4) For purposes of this subsection:  (A)  "multinational entity" shall mean an institution that is a member of a multinational group of institutions operating globally  where:  (i) at  least  one  institution in the group is formed under the laws of the United States or has significant operations in the  United  States;  and (ii)  at  least  one  institution  in  the group has offices outside the United States; and  (B) "group of institutions" shall mean a parent  corporation  and  its subsidiaries.