The Office of General Counsel issued the following informal opinion on October 31, 2002, representing the position of the New York State Insurance Department.

Re: Managing General Agent ("MGA")

Questions Presented:

1. Is an insurance agent’s license required to perform sales and administrative functions described in the facts provided?

2. Is an additional license necessary to perform billing and collection services for an authorized insurer in New York?


1. Yes. Appointing sub-agents or other representatives of an agent and engaging in solicitation of prospective insureds are some of the duties within the definition of an insurance agent in N.Y. Ins. Law §2101(a) (McKinney 2000). An insurance agent’s license may be issued pursuant to N.Y. Ins. Law §2103(a) or (b) (McKinney 2000). Further, many of the proposed functions are those performed by a Managing General Agent, for which licensing as an agent is required. See N. Y. Comp. Codes R. & Regs. tit. 11, § 33.3(a) (2001) (Regulation 120).

2. No. Performing billing and collection services for an authorized insurer does not require a license under the New York Insurance Law.


A Pennsylvania-based S-Corporation, (hereinafter the corporation) is wholly owned by its president who is licensed in New York as a non-resident insurance agent. The corporation holds a Pennsylvania Insurance Administrator’s license because it provides premium billing and collection services for insured health and dental groups in that state. It has been acting as a general agency for certain insurers in the ABC Group, marketing dental insurance. In conjunction with ABC Group-controlled domestic insurers such as DEF and XYZ, the corporation desires to provide sales and administrative functions for such insurers’ agents and clients residing in New York. The inquirer describe these functions as consisting of the appointment of producers, distribution of commissions and tax statements to same, enrollment and servicing of insured groups including premium billings and collection, and marketing the insurance product to producers and prospective insured groups. There will be no adjusting of claims functions as presently contemplated.

The corporation possesses licensing applications from this Department’s Licensing Bureau in order to apply for a corporate insurance agent’s license through Mr. Howell as sublicensee.


The proposed activity, which includes appointing sub-agents and solicitation of prospective insureds, requires licensing as a N.Y. insurance agent under N.Y. Ins. Law § 2103(a) (McKinney 2000).

Although the corporation’s president may currently be licensed in New York as a non-resident agent, if the president or the corporation maintains an office as an insurance agent in this state or if the president is an officer, director or an employee of a corporation that maintains an office as an insurance agent in this state, then neither the president nor the corporation would be considered a non-resident insurance agent within the definition in N.Y. Ins. Law § 2101(d) (McKinney 2002). Under such circumstances, they would be subject to the same qualification requirements as a resident agent under N.Y. Ins. Law § 2103 (McKinney 2002).

Since the type of activities contemplated by your office are similar to those done by an MGA, who is required to be licensed as an insurance agent, you shouId review the Department Regulation applicable to MGAs.

N. Y. Comp. Codes R. & Regs. tit. 11, § 33.1 (2001) (Regulation 120) provides that Part 33 applies to all insurers that enter into contracts with MGAs.

An MGA is defined in Section 33.2(c) of this Regulation to mean:

any person, firm, association or corporation that:

(1) manages all or part of the insurance business of an insurer (including the management of a separate division, department or underwriting office); (2) acts as an insurance agent as defined in section 2101(a) of the Insurance Law for such insurer, whether known as a managing general agent, manager, or other similar term, or acts as an insurance broker as defined in section 2101(c) of the Insurance Law; and (3) with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and accept or reject risks on behalf of the insurer (underwrites) an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with one or more of the following activities related to the business produced:

(i) adjusts or pays claims in excess of $25,000; or

(ii) negotiates reinsurance on behalf of the insurer.

Section 33.3(a) of this Regulation provides that:

No insurer shall appoint or continue to use the services of an MGA to act for it in this State, either directly or indirectly through subagents of the MGA, unless the MGA has an insurance agent’s license issued by this State to represent said insurer for the appropriate kinds of insurance.

Section 33.3(b) of this Regulation requires the insurer that appoints an MGA to act for it to complete and file a prescribed form with the Department within thirty days of the appointment.

The inquirer should also review the required contract provisions to be used in the written contract between the MGA and the insurer, as set forth in Section 33.5 of this Regulation.

Following the inquirer’s review of the Regulation pertaining to MGAs, the inquirer may determine that the inquirer’s functions are not those of an MGA. The inquirer might also choose to modify the inquirer’s functions to fall outside the definition of MGA in N.Y. Comp. Codes R. & Regs. tit. 11, § 33.2 (2001) (Regulation 120). However, as long as the inquirer’s company may appoint subagents for the insurer or solicit insureds to purchase the insurance products of the insurer, the inquirer’s company would still need an insurance agent’s license within the meaning of N.Y. Ins. Law § 2101(a) (McKinney 2000).

The New York Insurance Law does not require a person to be licensed to engage in billing and collection services for an authorized insurer. This opinion is limited to licensing required under the Insurance Law and does not address any other applicable statutes with which collection agencies must comply.

For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.

1  N.Y. Ins. Law § 2101(a) (McKinney 2000) defines an "insurance agent" as one "who acts as such in the solicitation of, negotiation for, or procurement or making of, an insurance. . . contract. . ."