2023 New York Laws › ISC - Insurance › Article 11 - Licensing of Insurers › 1101 - Definitions; Doing an Insurance Business.

§ 1101. Definitions; doing an insurance business. (a) In this article:
(1)  "Insurance  contract"  means  any  agreement  or  other transaction
whereby one party, the "insurer", is  obligated  to  confer  benefit  of
pecuniary  value  upon  another  party,  the "insured" or "beneficiary",
dependent upon the happening of a fortuitous event in which the  insured
or  beneficiary  has,  or  is  expected  to  have  at  the  time of such
happening, a material interest which will be adversely affected  by  the
happening of such event.
(2) "Fortuitous  event" means any occurrence or failure to occur which
is, or is assumed by the parties to be, to a substantial  extent  beyond
the control of either party.
(3) "Contract  of warranty, guaranty or suretyship" means an insurance
contract only if made by a warrantor, guarantor or surety who or  which,
as such, is doing an insurance business.
(b)  (1)  Except  as otherwise provided in this subsection, any of the
following acts in this state, effected by mail from outside  this  state
or   otherwise,   by  any  person,  firm,  association,  corporation  or
joint-stock company shall constitute doing an insurance business in this
state and shall constitute  doing  business  in  the  state  within  the
meaning  of  section  three  hundred  two  of the civil practice law and
rules:
(A) making, or proposing to make, as insurer, any insurance  contract,
including  either  issuance  or  delivery  of  a  policy  or contract of
insurance to a resident of this state or to any  firm,  association,  or
corporation  authorized  to  do  business  herein,  or  solicitation  of
applications for any such policies or contracts;
(B) making, or proposing to make, as warrantor, guarantor  or  surety,
any  contract  of warranty, guaranty or suretyship as a vocation and not
as merely incidental to any other legitimate business or activity of the
warrantor, guarantor or surety;
(C) collecting  any  premium,  membership  fee,  assessment  or  other
consideration for any policy or contract of insurance;
(D)  doing  any  kind  of  business, including a reinsurance business,
specifically recognized  as  constituting  the  doing  of  an  insurance
business within the meaning of this chapter; or
(E)  doing  or proposing to do any business in substance equivalent to
any of the foregoing in a manner designed to  evade  the  provisions  of
this chapter.
(2) Notwithstanding the foregoing, the following acts or transactions,
if  effected  by mail from outside this state by an unauthorized foreign
or alien insurer duly licensed to transact the business of insurance  in
and by the laws of its domicile, shall not constitute doing an insurance
business in this state, but section one thousand two hundred thirteen of
this chapter shall nevertheless be applicable to such insurers:
(A) transactions by any life insurance company organized and operated,
without profit to any private shareholder or individual, exclusively for
the   purpose  of  aiding  any  charitable,  religious,  educational  or
scientific institution organized and operated,  without  profit  to  any
private  shareholder  or  individual,  by  issuing  insurance or annuity
contracts  directly  from   its   home   office,   without   agents   or
representatives  in  this  state,  only  to  or  for the benefit of such
institutions and to individuals engaged in their service;
(B) transactions with respect to  group  life,  group  annuity,  group
accident and health or blanket accident and health insurance (other than
any  transaction  with  respect  to  a  group  annuity  contract funding
individual retirement accounts or individual  retirement  annuities,  as
defined  in  section  four  hundred  eight of the Internal Revenue Code,
funding annuities in accordance with subdivision  (b)  of  section  four

hundred  three  of such code or providing a plan of retirement annuities
under which the payments are derived wholly from  funds  contributed  by
the persons covered):
(i)  where  such  groups  conform  to  the  definitions of eligibility
contained in;
(I) the  following  paragraphs  of  subsection  (b)  of  section  four
thousand two hundred sixteen of this chapter:
(aa) paragraph (1) or (2);
(bb)  paragraph  (3),  if,  with  respect to those credit transactions
entered  into  in  this  state,  the  policy  fully  conforms  with  the
requirements  of sections three thousand two hundred one, three thousand
two hundred twenty  and  four  thousand  two  hundred  sixteen  of  this
chapter;
(cc) paragraphs (4), (5), (6), (7), (8), (9) and (10).
(II) the following subparagraphs of paragraph (1) of subsection (c) of
section four thousand two hundred thirty-five of this chapter:
(aa) subparagraph (A), (B), (C) or (D);
(bb)  subparagraph  (E), if, with respect to those credit transactions
entered  into  in  this  state,  the  policy  fully  conforms  with  the
requirements  of sections three thousand two hundred one, three thousand
two hundred twenty-one and four thousand two hundred thirty-five of this
chapter;
(cc) subparagraphs (F), (G) and (H).
(III)  section  four  thousand  two   hundred   thirty-seven   (except
subparagraph  (F)  of paragraph three of subsection (a) thereof) or four
thousand two hundred thirty-eight (except paragraphs six  and  seven  of
subsection (b) thereof) of this chapter; and
(ii)  where  the  master  policies  or  contracts were lawfully issued
without this state in a jurisdiction where the insurer was authorized to
do an insurance business;
(C) transactions involving the continuance or  servicing  of  life  or
accident  and  health  insurance  policies or annuity contracts lawfully
issued or delivered in this state by an authorized insurer and occurring
subsequent to the termination of  such  insurer's  authority  to  do  an
insurance  business  in  this  state. Notwithstanding the foregoing, the
superintendent's approval granted pursuant to section one  thousand  one
hundred  five  of  this article may authorize transactions involving the
continuance or servicing of life insurance policies or annuity contracts
to be effected  from  outside  this  state  by  telephone,  video  call,
facsimile,  web  portal,  electronic  transfer of funds, or by any other
electronic means approved  by  the  superintendent,  provided  that  the
insurer shall not have any other contact or interaction with a person in
this  state  other  than as specified and in the manner provided in this
paragraph;
(D)  transactions  with  respect  to  policies  or  annuity  contracts
lawfully issued without this state occurring subsequent to issue, if, at
the  time  of  issue,  such  policies  or  contracts covered subjects of
insurance  or  risks  not   resident   or   located   in   this   state.
Notwithstanding   the   foregoing,   transactions   described   in  this
subparagraph involving the continuance or servicing  of  life  insurance
policies or annuity contracts may be effected from outside this state by
telephone,  video  call,  facsimile,  web portal, electronic transfer of
funds, or by any other electronic means approved by the  superintendent,
provided   that  the  insurer  shall  not  have  any  other  contact  or
interaction with a person in this state other than as specified  and  in
the manner provided in this paragraph;
(E)  transactions  with  respect  to  policies  of  insurance on risks
located or resident within or without this state (except master policies

or contracts of group insurance which are subject to the requirements of
subparagraph (B) hereof), which  policies  are  principally  negotiated,
issued  and  delivered without this state in a jurisdiction in which the
insurer is authorized to do an insurance business;
(F)  transactions  authorized by section two thousand one hundred five
of this chapter with respect to excess lines insurance;
(G)  transactions  with  respect  to  the  reinsurance  of  risks   of
authorized  insurers to the extent that such reinsurance is permitted by
this chapter;
(H) transactions with respect to  insurance  contracts  negotiated  or
placed  pursuant or otherwise subject to subsection (b), (c), (j) or (k)
of section two thousand one hundred seventeen of this chapter;
(I) transactions with respect to any policy of  insurance  or  annuity
contract issued prior to September first, nineteen hundred seventy.
(3) Notwithstanding the foregoing, the making of an agreement pursuant
to  which  a  lessor  of  personal property, a creditor making a loan or
other credit transaction on personal property or, in the  absence  of  a
waiver  by  the  lessor or creditor, the lessor's or creditor's assignee
waives the obligation of the lessee or debtor for  the  gap  amount,  as
such term is defined in paragraph fifty-two of subsection (a) of section
one hundred seven of this chapter, shall not constitute, or be deemed to
constitute, the doing of an insurance business if:
(i)  the  lessor  or  creditor  or,  in the absence of a waiver by the
lessor or creditor, the assignee waives any and all obligations  of  the
lessee  or  debtor  for  the  gap  amount  and  the  lessee or debtor is
discharged from any and all further obligation to pay the gap amount;
(ii) the waiver applies only in the event  of  a  total  loss  of  the
personal property occasioned by its theft or physical damage;
(iii)  in  the event the lessor, creditor or assignee purchases lessor
or creditor gap insurance, the charge to the lessee or  debtor  for  the
waiver  does not exceed the cost of the lessor or creditor gap insurance
coverage; provided, however, that  nothing  contained  herein  shall  be
construed  to  prohibit  the  lessor  from  including the charge for the
waiver in the capitalized cost as that term is  defined  in  subdivision
eleven of section three hundred thirty-one of the personal property law.
(3-a)  Notwithstanding  the  foregoing, the marketing, sale, offer for
sale, issuance, making, proposing to make or administration of a service
contract pursuant to article seventy-nine of this chapter  or  warranty,
service  contract or maintenance agreement conditioned upon or otherwise
associated with the sale or supply of heating fuel shall not  constitute
doing an insurance business in this state.
(4)  In  the  application  of this chapter, the fact that no profit is
derived  from  the  making  of  insurance   contracts,   agreements   or
transactions,  or  that  no separate or direct consideration is received
therefor, shall not be deemed  conclusively  to  show  that  the  making
thereof does not constitute the doing of an insurance business.
(5)  Notwithstanding the foregoing, an unauthorized insurer, which (A)
is affiliated with an insurer  licensed  in  this  state,  and  (B)  has
satisfied  all  applicable  requirements  for  placements by excess line
brokers as set forth in section two thousand  one  hundred  eighteen  of
this  chapter,  may provide from an office within the state, services to
support its insurance business. Such services shall not be deemed  under
this  chapter  as  doing  an  insurance  business in this state. For the
purposes of this section these services include, but are not 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. Such services  shall  not  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 chapter, 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 chapter. All  obligations  of  such  a
licensee  under  article twenty-one of this chapter shall remain in full
force and effect. Any document issued by the 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.
(6) Notwithstanding the foregoing, the election by  the  president  of
the  civil service commission to provide health benefits directly to New
York state health benefit plan participants  shall  not  constitute  the
doing  of insurance business within the meaning of article eleven of the
insurance law.
(7)(A) Notwithstanding the foregoing, the making of a swap  shall  not
constitute doing an insurance business in this state.
(B)  For the purposes of this paragraph, "swap" shall have the meaning
set forth in 7 U.S.C. § 1a.
(8) Notwithstanding  the  foregoing,  the  maintenance  of  a  website
outside  the  state  by  an  unauthorized  foreign or alien insurer duly
licensed to transact the business of insurance in and by the laws of its
domicile, by which a member of  a  group  may  self-enroll,  through  an
automated process, in a group life, group annuity, or group accident and
health  insurance policy or contract, as defined in paragraphs one, two,
and three of subsection (a) of section one thousand one hundred thirteen
of this article, shall not constitute doing  an  insurance  business  in
this  state,  but  section  one  thousand  two  hundred thirteen of this
chapter nevertheless shall apply to the insurer; provided that:
(A) the group conforms to the definition of eligibility contained in:
(i) paragraph one, two, four (with respect to a  policy  issued  to  a
trustee  or  trustees of a fund established or participated in by two or
more employers, one or more labor unions, or by one or more employers or
labor unions, provided that all such employers or labor  unions  are  in
the  same  industry), or five of subsection (b) of section four thousand
two hundred sixteen of this chapter;
(ii) subparagraph (A), (B), (C), or (D)  (with  respect  to  a  policy
issued to a trustee or trustees of a fund established or participated in
by  two  or  more employers, one or more labor unions, or by one or more
employers or labor unions, provided that all  such  employers  or  labor
unions  are  in the same industry) of paragraph one of subsection (c) of
section four thousand two hundred thirty-five of this chapter; or
(iii) paragraphs one, two, three or four of subsection (b) of  section
four  thousand  two  hundred  thirty-eight  of  this  chapter,  but  not
including a group annuity contract: (I)  funding  individual  retirement
accounts  or individual retirement annuities, as defined in section four
hundred eight of the Internal Revenue Code; (II)  funding  annuities  in
accordance  with  subdivision  (b) of section four hundred three of such
code; or (III) providing a plan of retirement annuities under which  the
payments  are  derived  wholly  from  funds  contributed  by the persons
covered.
(B) the insurer lawfully issued the master policy or contract  without
this  state  in a jurisdiction where the insurer was authorized to do an
insurance business;
(C) the insurer's website clearly  states  that  the  insurer  is  not
authorized to transact the business of insurance in this state; and
(D)  the  insurer  does not have any other contact or interaction with
the member other than  as  specified  and  in  the  manner  provided  in
paragraph two of this subsection.