The office of General Counsel issued the following informal opinion on September 6, 2000, representing the position of the New York State Insurance Department.
RE: Payroll Deduction of Insurance Premiums
Does a payroll company, which collects insurance premiums via payroll deduction need to obtain a license from this Department?
No. The payroll company is not acting as an insurer and is not engaged in any activity which would require licensing under the Insurance Law.
The payroll company is performing administrative services on behalf of the insurer. It merely "collects" the premium payments from the insured employees and remits payment to the insurer. The payroll company would not be required to obtain a license from the Insurance Department.
For further information you may contact Associate Attorney Samuel Wachtel at the New York City Office.