The Office of General Counsel issued the following opinion on September 26, 2003 representing the position of the New York State Insurance Department.
Re: Internet Advertising.
May an insurance agency that is owned by a national bank make reference to an unauthorized insurer on its web site that is accessible to New York residents?
A web site may contain advertisements for insurance products or services that are being offered by an unauthorized insurer, provided that the advertisements or the web site upon which the advertisements appear contain a clear and conspicuous disclaimer. See Circular Letter 2001-5.
ABCNYs insurance products are distributed through insurance agencies that are owned by national banks, many of which operate both inside and outside of New York. These agencies distribute products that are offered and underwritten by both ABCNY, an authorized insurer, and its parent, DEF, an unauthorized insurer. The inquirer asks whether on their web sites, which are used, in part, to promote insurance products to consumers, these agencies may reference the unauthorized insurer. They propose to include the following disclaimer on the web site:
Products are underwritten by DEF in all states except New York. In New York, products are underwritten and offered by ABCNY. Each company is responsible for the obligations to its policyholders. Products are not available to non-residents of the United States.
On February 1, 2001 the Department issued Circular Letter 2001-5, entitled Advertisements, Referrals and Solicitations on the Internet.1 With respect to advertisements, the Circular Letter states:
The Department does not consider the mere maintenance of a passive web site that is accessible to New York residents containing information about specific insurance products or services to constitute solicitation under New York Insurance Law. A web site that merely contains advertisements for insurance products or services also does not constitute solicitation.
Internet advertisements for products or services of insurance companies, agents or brokers can appear in many forms, including banners, tiles, hypertext links, frames or embedded links. Such advertisements must be clearly delineated as such and are permitted to appear on the web site of a non-licensee even if it leads the consumer to, or is linked to, a web site where insurance solicitation takes place, as long as the advertisement or web site does not include, or the advertisement is not framed by, recommendations, endorsements or promotions from the non-licensee concerning the insurance products or services. Accordingly, a non-licensee hosting such advertisements on its web site may receive compensation calculated in any manner, including flat fees for such advertisements or fees that are based upon the amount of insurance business produced as a result of such advertisements. Advertisements that appear on the Internet are subject to all applicable existing statutory and regulatory guidelines and restrictions applicable to advertisements in any other medium.
However, if the insurance products or services are not being offered by a New York authorized insurer, the advertisements or the web sites upon which the advertisements appear must contain a clear and conspicuous disclaimer indicating that the advertised products or services are not available in New York State, and such products and services cannot, in fact, be made available in New York. For example, a disclaimer stating "not available in all states" would be sufficient. In such cases, compensation may not be based upon New York sales since such sales would violate the Insurance Law.
Accordingly, a national agency may make reference to an unauthorized insurer on its web site that is accessible to New York residents, provided that the web site or the advertisement contains the disclaimer.
For further information you may contact Supervising Attorney Joan Siegel at the New York City Office.
1 Circular Letter 2001-5 is available on the Departments web site, www.ins.state.ny.us.