2023 New York Laws › ISC - Insurance › Article 23 - Property/casualty Insurance Rates › 2324 - Rebating and Discrimination.

§  2324.  Rebating  and  discrimination. (a) No authorized insurer, no
licensed insurance agent, no licensed insurance broker, and no  employee
or other representative of any such insurer, agent or broker shall make,
procure  or  negotiate  any  contract of insurance other than as plainly
expressed in the policy or other written contract issued or to be issued
as evidence thereof, or shall  directly  or  indirectly,  by  giving  or
sharing  a commission or in any manner whatsoever, pay or allow or offer
to pay or allow to the insured or to any employee of the insured, either
as an inducement to the making of insurance or after insurance has  been
effected,  any rebate from the premium which is specified in the policy,
or any special favor or advantage in the dividends or other  benefit  to
accrue   thereon,   or   shall  give  or  offer  to  give  any  valuable
consideration or inducement of any kind, directly or  indirectly,  which
is  not  specified  in  such policy or contract, other than any valuable
consideration, including but not limited to  merchandise  or  periodical
subscriptions,  not  exceeding  twenty-five  dollars  in value, or shall
give, sell or purchase, or offer  to  give,  sell  or  purchase,  as  an
inducement  to  the making of such insurance or in connection therewith,
any stock, bond or other securities or any dividends or profits  accrued
thereon,  nor  shall  the insured, his agent or representative knowingly
receive directly or indirectly, any such  rebate  or  special  favor  or
advantage,  provided,  however, a licensed insurance agent or a licensed
insurance broker may retain the usual commission or underwriting fee  on
insurance  placed on his own property or risks, if the aggregate of such
commissions or underwriting fees will not exceed  five  percent  of  the
total  net  commissions  or  underwriting fees received by such licensed
insurance agent or insurance broker during the calendar year.
(b) Within the meaning of subsection (a)  hereof,  the  sharing  of  a
commission with the insured shall be deemed to include any case in which
a  licensed  insurance  agent  or a licensed insurance broker which is a
subsidiary  corporation  of,  or  a  corporation  affiliated  with,  any
corporation   insured,  received  commissions  for  the  negotiation  or
procurement of any policy or contract of insurance for the insured.
(c) This  section  shall  not  prohibit  any  insurer  from  equitably
distributing  to  its  policyholders  dividends  payable from surplus on
earned premiums, nor prohibit the return at any time during the term  or
at the termination of the contract of insurance of dividends, savings or
the  unused  or  unabsorbed  portion of premiums and premium deposits to
policyholders of a mutual insurer or  to  subscribers  of  a  reciprocal
insurer,  nor  prohibit  any  insurer  or  insurance  agent  from paying
commissions to a licensed insurance broker for negotiating a  policy  or
contract  of  insurance, nor prohibit any licensed insurance broker from
sharing or dividing a commission earned or  received  by  him  with  any
other  licensed  insurance broker or brokers who shall have aided him in
respect to the insurance for the negotiation of which the commission has
been earned or paid.
(d) This section shall not prohibit the making of temporary  contracts
of  insurance,  either  by  temporary binders or other memoranda, if the
premium applicable to the insurance shall be due and shall be  paid  for
the  time  during  which  the  insurance  is  in  force by virtue of the
temporary contract.
(e) This section  shall  not  apply  to  any  policy  or  contract  of
reinsurance  nor  to  any contract or policy of life insurance, accident
insurance or health insurance which is  subject  to  the  provisions  of
section  four  thousand  two hundred twenty-four of this chapter, nor to
any contract or policy of marine  insurance,  other  than  contracts  or
policies  of automobile insurance, or of marine protection and indemnity
insurance, nor to any  insurance  contract,  or  rate  of  insurance  in

connection with any insurance contract either against loss or damage to,
or  legal  liability  in  connection  with,  any property located wholly
outside of this state or any activity carried on outside of  this  state
or any motor vehicle or aircraft principally garaged and used outside of
this state.
(f) Any person or corporation violating the provisions of this section
shall,  in  addition  to all other penalties provided by law, pay to the
people of this state as a penalty the sum of five  hundred  dollars  for
each such violation.