OGC Op. No. 07-02-11
The Office of General Counsel issued the following opinion on February 13, 2007, representing the position of the New York State Insurance Department.
Re: Stamped Versus Hand-Written Signature on Application Forms
1. May a licensed insurance producer (i.e., an agent or broker) use a stamped signature instead of a handwritten signature on an application for group insurance?
2. May a licensed insurance producer authorize an unlicensed employee to sign the insurance application on his/her behalf?
1. Yes. There is nothing in the Insurance Law, nor the regulations promulgated thereunder, that prohibits the use, by an insurance producer, of a stamped signature. In addition, pursuant to N.Y. General Construction Law § 46 (McKinney 2003), a signature can be stamped if such stamped signature is placed on a document with intent to execute or authenticate such document. However, a licensed insurance producer who chooses to use a stamped signature will be held strictly accountable by the Department if, for example, there is misuse of such stamp by unlicensed employees or other unauthorized personnel.
2. N.Y. Insurance Law § 2101(a)(1) (McKinney 2006) exempts from licensing any regular salaried officer or employee of an insurance agent, and allows such officer or employee to engage in certain limited activities in the office of such agent, including signing insurance applications on the agents behalf. However, the officer or employee may not receive a commission or compensation that is directly dependent upon the amount of business produced.
There is no provision in the Insurance Law that permits an unlicensed employee of a broker to engage in such activities on the brokers behalf. In addition, in the case of applications submitted through the New York Automobile Insurance Plan (NYAIP), as well as those that require affirmations and certifications by a licensed insurance producer, the producer may not delegate his/her signature responsibility to unlicensed employees.
The inquiry is two-fold. First, the inquirer asks whether a licensed insurance producer may use a stamped signature, in lieu of his or her handwritten signature, on application forms for group insurance. Second, the inquirer asks whether a licensed insurance producer may authorize an unlicensed employee to sign the application on the producers behalf in a situation where many applications for insurance are taken, and the volume of business makes it difficult for the producer to sign each application individually. The inquirer states that in such situation, the unlicensed employee would either sign the application in the name of the license producer, or the employee would sign his or her own name on behalf of the producer.
General Construction Law § 46 (McKinney 2003) is relevant to the first question. It defines signature as follows:
The term signature includes any memorandum, mark or sign, written, printed, stamped, photographed, engraved or otherwise placed upon any instrument or writing with intent to execute or authenticate such instrument or writing. (emphasis added).
Pursuant to General Construction Law § 46, a signature can be stamped if such stamp is placed on a document with intent to execute or authenticate such document. Further, there is nothing in the Insurance Law, nor the regulations promulgated thereunder, that prohibits an insurance producer from using a stamped signature on insurance applications. Thus, a licensed insurance producer may use a stamped signature on an application for group insurance. However, a licensed insurance producer who chooses to use a stamped signature will be held strictly accountable by the Department if, for example, there is misuse of such stamp by unlicensed employees or other unauthorized personnel.
The inquirer also asks whether a licensed insurance producer may delegate his/her signature responsibilities to his/her unlicensed employees. Insurance Law § 2101(a)(1) (McKinney 2006), which addresses insurance agents, provides, in pertinent part, as follows:
(a) In this article, insurance agent means any authorized or acknowledged agent of an insurer issued a certificate of authority pursuant to article forty-four of the public health law, and any sub-agent or other representative of such an agent, who acts as such in the solicitation of, negotiation for, or sale of, an insurance contract, other than as a licensed insurance broker, except that such term shall not include:
(1) any regular salaried officer or employee of a licensed insurer, or of a licensed insurance agent, who does not solicit or accept from the public, outside of an office of such insurer, or agent, applications or orders for any such contract, if such officer or employee does not receive a commission or other compensation for his services which commission or other compensation is directly dependent upon the amount of business done; .
Based on this exemption, unlicensed employees of insurance agents may solicit business (i.e., take applications in the office of the agent), so long as their compensation is not directly dependent upon the amount of business produced. And in furtherance of this objective, an unlicensed employee may sign on the agents behalf, any application taken in the office. However, such employee may not sign the agents name without clearly indicating, by some means, that the signature is not the actual signature of the agent. Moreover, the employee should clearly identify him/herself as the person signing on the agents behalf.
There is no similar exemption for licensed insurance brokers. Therefore, an unlicensed employee of an insurance broker may not sign applications on the brokers behalf.
Please note that unlicensed employees and officers that engage in any delegated activity do so only on behalf, and in the name, of the licensee, via the authority so delegated by the licensee. Thus, the licensee and any sublicensee must properly supervise the non?licensee, and will be held strictly accountable by the Department for the activities of such non?licensees. Accordingly, it is incumbent upon the licensee and sublicensee to ensure that the unlicensed person is adequately trained, trustworthy, and aware of the limits on his or her ability to act on behalf of the licensee.
However, I note that in regard to applications submitted through the New York Automobile Insurance Plan (NYAIP), Section 15(A)(1)(a)(4) of the NYAIP Rules provides, in pertinent part, as follows:
(1) Original Applications
(a) Applications shall be fully completed and must include
(4) signature of applicant and producer. (emphasis added).
Therefore, an insurance producer who writes business through the NYAIP may not delegate his/her signature duties to an unlicensed employee, even when the application is completed electronically through the Producer Application Submission System (PASS).
In addition, in any instance where an insurance regulation or statute requires a certification or affirmation by a licensed insurance producer, as in N.Y. Comp. Codes R. & Regs. tit. 11, § 51 (2003) (Regulation 60), such producer must sign the form. In other words, he/she may not delegate that responsibility to unlicensed employees.
For further information you may contact Associate Attorney D. Monica Marsh at the New York City Office.