Relates to permitting insurance brokers to engage in certain activities in New York with respect to multi-national entities

Summary of provisions

Section 1 of the bill would add a new Insurance Law Section 2117(k) to permit a licensed insurance broker, under certain specified conditions, to: (1) provide information to a multinational entity resident outside the United States with respect to a group life, annuity, or accident and health insurance policy or contract issued or delivered, or that will be issued or delivered, by an alien insurer; (2) meet and discuss insurance needs with the multinational entity; (3) refer the multinational entity to the alien insurer and provide information to the multinational entity about the alien insurer; (4) respond to requests for information by representatives of the multinational entity concerning quotes and any other specific terms and conditions of such a policy or contract being negotiated in the jurisdiction where the policy or contract will be issued or delivered by the alien insurer; (5) provide information concerning renewals of existing such policies or contracts issued by the alien insurer; and (6) manage the employee benefits program of the multinational entity

A multinational entity means an institution (as defined in Insurance Law Section 107(a)(24)) 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. A "group of institutions" means a parent corporation and its subsidiaries (as such terms are defined in Section 107(a)(40)).

Section 2 would amend Insurance Law Section 1101(b)(2)(H) to reference new Insurance Law Section 2117(k) Section 3 would set forth an immediate effective date.

Existing law

Insurance Law Section 1101 defines the doing of an insurance business and sets forth certain acts or transactions that, if effected by mail from outside New York State by an unauthorized insurer licensed to transact the business of insurance in its domicile, will not constitute the doing of an insurance business in New York State. Insurance Law Section 1102 prohibits any individual or business entity from doing an insurance business in New York State unless authorized by a license in force pursuant to the Insurance Law or exempted from licensing by the Insurance Law.

Insurance Law Section 2102 prohibits any individual or business entity from acting as an insurance agent or broker in New York State without having authority to do so by virtue of a license issued and in force pursuant to the Insurance Law.

Insurance Law Section 2117 generally prohibits any individual or business entity from acting as an agent for any insurer or health maintenance organization ("HMO") that is not licensed in New York State in the doing of an insurance or HMO business in New York State or in soliciting, negotiating, or effectuating any insurance policy or contract. Section 2117 also generally prohibits such an individual or business entity from acting as an insurance broker in soliciting, negotiating, or in any way effectuating any insurance policy or contract of or placing risks with, any such insurer or HMO, and also prohibits in any way or manner the aiding of any such insurer or HMO in effecting any insurance policy or contract. Section 2117 provides certain limited exemptions from this general prohibition

Justification

New York State is a hub of international business, and many multinational institutions, including corporations, partnerships, and limited liability companies, have offices in or near New York State,. These offices of the multinational entities often have an interest in securing life insurance, accident and health insurance, and annuity contracts for employees who reside outside the United States, including employees who may be in the United States temporarily.

Under Insurance Law Section 2117, among other things, a licensed insurance broker generally may not solicit, negotiate, or in any way effectuate any insurance policy or contract of or place risks with, any insurer that is not licensed or authorized to do an insurance business in New York State, nor shall any person in any way or manner aid any such insurer in effectuating any insurance in this state. However, Insurance Law Section 2117 provides certain exemptions from the general prohibition if specific conditions are satisfied.

This bill would add a new limited exemption from the general prohibition set forth in Insurance Law Section 2117. The new exemption would permit a licensed insurance broker to engage in certain specified activities in New York State related to group life, group annuity, or group accident and health insurance policies or contracts provided that an alien insurer issued or delivered the policy or contract to a policyholder or proposed policyholder that is a multinational entity resident outside the United States.

In addition, the insurance policy or contract may cover only the institution's employees and their dependents provided that the employees reside outside the United States, except that the policy or contract may cover those employees who are temporarily in the United States. The exemption would set forth additional conditions that must be met by the alien insurer and would limit the activities of the licensed insurance broker.

This bill would continue to protect policyholders and certificate holders while allowing insurers to best meet the needs of their New York customers with a global presence, thereby allowing New York to continue functioning as a center of international business.

Legislative history

New bill.

Fiscal implications

None.

Effective date

Immediately,