OGC Opinion No. 04-03-09: Premiums Collection Licensing Requirements

OGC Op. No. 04-03-09

The Office of General Counsel issued the following opinion on March 11, 2004, representing the position of the New York State Insurance Department.

Re: Premiums Collection Licensing Requirements

Question Presented:

Does the collecting and remitting of insurance premium monies, the service the inquirer intends to provide to an authorized New York insurance company, require a license from the New York State Insurance Department?

Conclusion:

No. Collecting and remitting insurance premium monies at the request of an authorized New York insurance company is not an activity that requires a license from the New York State Insurance Department. We express no opinion concerning the application of other New York or federal laws.

Facts:

The inquirers company ("the company") is a billing agency in Florida which contracts with certain health insurance companies to take care of their billing needs by requesting their insureds to agree to have their checking or credit card accounts debited. The company also accepts personal checks from insureds to pay premiums due. After collecting the insurance premium monies from individual insureds, the company submits the monies to the appropriate insurer on a monthly basis. The company does not perform any other services, including solicitation or sales of insurance products or adjusting claims. The company has a surety bond and is licensed in Florida as a Third Party Administrator.

Analysis:

The type of function the inquirer intends to perform in New York is not considered one that requires an insurance license. New York State does not use the term Third Party Administrator but the Department analyzes the actual duties being performed to determine if licensing as an agent, broker, adjuster, or in another capacity is required. Under the facts provided, the inquirer may perform the stated functions on behalf of a New York authorized insurer without being licensed by this Department. We express no opinion concerning the application of other New York or federal laws.