OGC Op. No. 06-12-17

The Office of General Counsel issued the following opinion on December 22, 2006, representing the position of the New York State Insurance Department.

Re: Prohibited Referral Payments to Insurance Agents or Employees by Motor Vehicle Glass Repairer

Question Presented

May an insurance agent or employee of an insurer accept cash or cash equivalent payment gratuities from a motor vehicle glass repair shop after referring a glass repair claim to the shop?


No. Acceptance of such payment by an insurance agent or employee of an insurer is prohibited under Section 322 of the New York Insurance Law.


The inquirer is an employee of a motor vehicle glass repair shop and stated that they were aware of motor vehicle glass repair shops in New York that are providing insurance agents and employees of insurers with "gratuities" in the form of $25 gift cards after the glass repair shops had received repair referrals from those insurance agents and employees.


N.Y. Ins. Law § 322 (McKinney 2006) states that "No licensed insurance agent, licensed insurance broker, licensed adjuster, authorized insurer or representative of such insurer shall directly or indirectly request, procure or accept any payment from a motor vehicle repairer for referring any motor vehicle repair business to such repairer."

This statutory prohibition is directly applicable to the situation posed, as a motor vehicle repairer includes a motor vehicle glass repairer. Therefore, any insurance agent or employee or other representative of an insurer would be in violation of the Insurance Law by accepting cash or cash-equivalent gratuities or gifts (including gift cards) from a motor vehicle glass repair shop after receiving a repair referral from insurance agents or employee or other representative of insurers. If the inquirer or any other person has any information supporting instances when such violations took place, specific information should be provided to the Department’s Consumer Services Bureau for appropriate investigation.

While there is no provision in the Insurance Law that prohibits body repair shops from offering such gifts to an insurance agent or employee, we express no view as to whether such actions would violate other state or local law.

For further information you may contact Supervising Attorney Lawrence M. Fuchsberg at the New York City Office.