The New York Insurance Department’s Office of General Counsel issued the following advisory legal opinions in May:
- A person who is not a licensed agent may be partners with a licensed agent in an insurance agency. Federal law precludes an individual who has been convicted of any criminal felony involving dishonesty or a breach of trust from participating in the business of insurance without the written consent of the Insurance Department. A non-licensed person may share in the agency’s overall profits but not in its commissions.
- An insurer on an errors and omissions liability insurance policy must issue a conditional renewal notice if the renewal premium is increased by over 10%, even if generated by the removing of a direct bill credit upon making a new rate filing with the Department. The law does not require notice if the increase is because of increased exposure units, experience rating, loss rating, retrospective rating, or audit.
- If a health insurance producer presents a quote for an experience-rated group health insurance policy at a specific rate with a specific commission, the producer or the insurer may not as a general matter provide, or offer to provide, a reduction in the premium by simply reducing the producer’s commission. However, if the filed rates for that policy form reflect commission adjustments attributable to articulated factors, such as the level and type of insurance services to be provided by the producer, then the commission may be correspondingly reduced, as specified in the insurer’s filed rates.
The Department posted these and other opinions in May. Visit the Department’s Web site to find any opinion issued since 2000.