The Office of General Counsel issued the following informal opinion on November 22, 2002, representing the position of the New York State Insurance Department.

Re: ABC Home Care Services, Inc.

Question Presented:

Does a contract that provides non-medical home care services for a specified number of hours and at a pre-determined total cost for the care to individuals who are homebound due to some physical or medical condition constitute insurance?


No. The contract issued does not come within the definition of an insurance contract as defined by the Insurance Law.


The inquirer’s client, ABC Home Care Services, Inc. (ABC), contracts with consumers to provide them, or their relatives, with non-medical, in home, personal care. The care is provided for individuals who are homebound due to some physical or medical condition. As stated in ABC’s "Home Service Contract," the services provided involve assistance with everyday activities and chores. Preparation of food and service of meals, assistance with bathing, showering and grooming, dressing and undressing, toileting and personal hygiene, shopping for food and supplies, laundering of clothes and bed linens, and miscellaneous services performed upon request, are all services available to ABC customers.

ABC arranges for appropriately trained and supervised service providers to provide services up to the number of hours purchased in a given stated period of time. In consideration for the services, the customer pays a pre-determined amount. In the event that the customer exhausts the contracted number of hours, the customer may contract for additional hours at an hourly rate. In the event the customer dies during the stated period of time, ABC will make no refund of payments.

As a condition of service, the customer must have an approved Plan of Service determined by ABC. As defined in ABC’s Glossary of Important Terms, a Plan of Service is a statement of the goals and objectives of the services provided for the customer, and the objectives and activities or tasks required to accomplish the schedule written for the customer and signed by ABC.

As stated in the inquirer’s letter, the home care service is provided without the need for a claim or the occurrence of any type of loss or event. The inquirer’s customers may only obtain services as provided through ABC, by way of its subcontractors, and may not engage a service provider and be reimbursed by ABC.


In order to determine if a particular arrangement constitutes insurance under the New York Insurance Law, Article 11 must be applied. N.Y. Ins. Law § 1101(a)(1) (McKinney 2000) provides:

(1) ‘Insurance contract’ means any agreement or other transaction whereby one party, the ‘insurer’, is obligated to confer benefit of pecuniary value upon another party, the ‘insured’ or ‘beneficiary’, dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have at the time of such happening, a material interest which will be adversely affected by the happening of such event.

A fortuitous event is defined in N.Y. Ins. Law § 1101(a)(2) as:

any occurrence or failure to occur which is, or is assumed by the parties to be, to a substantial extent beyond the control of either party.

N.Y. Ins. Law § 1102 (McKinney 2000) prohibits the issuance of an insurance without a license from this Department or an exemption from such licensure.

Based upon the letter and materials the inquirer submitted to the Department, the contracts issued by ABC do not come within the definition of an insurance contract as defined by the Insurance Law. The customer enters into a contract with ABC for home care services for a specified number of hours at a pre-determined total cost. The cost is pre-determined through the approval of a Plan of Service by ABC. Therefore, all services contemplated by ABC and the customer are not dependent upon the occurrence of a fortuitous event. Any and all services are provided solely for conditions that have resulted from events that have previously occurred.

As a result, ABC’s Home Service Contract does not constitute an insurance contract and, therefore, this Department does not require ABC to be licensed for issuing its Home Service Contract.

For further information you may contact Supervising Attorney Joan Siegel at the New York City Office.