The Office of General Counsel issued the following informal opinion on February 15, 2002, representing the position of the New York State Insurance Department.
Re: Insurance Consultant; N.Y. Ins. Law § 2107 (McKinney 2000)
Question Presented:
Is a person required to have an insurance brokers, agents, or consultants license to start a business that would involve reviewing an insureds homeowners or renters insurance policy to verify that there is adequate insurance coverage and recommending insurance coverages and riders?
Conclusion:
Yes. As Ms. A does not plan to sell insurance as part of this business, the appropriate license for Ms. A to obtain is a general insurance consultants license.
Facts:
Ms. A is interested in starting a business that would provide an inventory of a persons possessions and would include reviewing the persons homeowners or renters insurance policy to determine if the coverage was sufficient. Ms. A intends to recommend insurance coverages and riders to such insureds and to have her business bonded and insured to do this service. Ms. A will not sell insurance as part of this business.
Analysis:
N. Y. Ins. Law § 2102(b)(1) (McKinney 2000) provides:
Unless licensed as an insurance agent, insurance broker or insurance consultant, no person, firm, association or corporation shall in this state identify or hold himself or itself out to be an insurance advisor, insurance consultant or insurance counselor.
N.Y. Ins. Law § 2102(b)(2) (McKinney 2000) provides:
No person, firm, association or corporation shall use any other designation or title which is likely to mislead the public or shall hold himself or itself out in any manner as having particular insurance qualifications other than those for which he may be otherwise licensed or otherwise qualified.
In addition, N.Y. Ins. Law § 2102(b)(3) (McKinney 2000) provides:
Unless licensed as an insurance agent, insurance broker or insurance consultant with respect to the relevant kinds of insurance, no person, firm, association or corporation shall receive any money, fee, commission or thing of value for examining, appraising, reviewing or evaluating any insurance policy, annuity or pension contract, plan or program or shall make recommendations or give advice with regard to any of the above.
N. Y. Ins. Law § 2119(a)(1) (McKinney 2000) provides:
No person licensed as an insurance agent, broker or consultant may receive any fee, commission or thing of value for examining, appraising, reviewing or evaluating any insurance policy, bond, annuity or pension or profit-sharing contract, plan or program or for making recommendations or giving advice with regard to any of the above, unless such compensation is based upon a written memorandum signed by the party to be charged and specifying or clearly defining the amount or extent of such compensation.
Ms. As duties include reviewing and examining the insurance policy, advising the client as to the adequacy of coverage to protect the insureds possessions, and making recommendations or giving advice about insurance. Accordingly, Ms. A will need to be licensed as an insurance agent, insurance broker, or insurance consultant to perform those services or to accept compensation for such services.
N. Y. Ins. Law § 2107 sets forth generally the licensing requirements for insurance consultants. N. Y. Ins. Law § 2107(a)(1) (McKinney 2000) provides that there are two types of licenses for an insurance consultant. One is a life insurance consultants license and the other, under which Ms. As proposed service would fall, is a general insurance consultants license.
Ms. A should contact the Departments Licensing Services Bureau at NYS Insurance Department, Agency Building 1, Empire State Plaza, Albany, N. Y. 12257, or telephone 518-474-7159, or use our website, www.ins.state.ny.us to request application forms and information concerning license fees and the written examination.
For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.
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