2023 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.