OGC Opinion No. 08-04-35
The Office of General Counsel issued the following opinion on April 28, 2008, representing the position of the New York State Insurance Department.
RE: Radio and internet advertisements of insurance agents and brokers
Questions Presented:
1. Must an insurance producer,1 in any radio or print advertisement that mentions an insurer that the insurance producer represents, also mention the location of the insurer’s principal office pursuant to Insurance Law § 2122(b) if the advertisement does not provide any rating information, but may refer to the types of coverage offered by the insurer, as well as the insurer’s claims-handling methods?
2. May an insurance producer lawfully use an insurer’s logo (with the insurer’s permission) on the insurance producer’s website advertisement without providing the full name and location of that insurer?
Conclusions:
1. Yes. Under Insurance Law § 2122(b), an insurance agent or broker shall, in all advertisements or public announcements that refer to an insurer, also include the city, town or village in which the insurer has its principal office. The Insurance Law does not make a distinction between the types of media through which the advertisement is disseminated.
2. No. The use of only an insurer’s logo in advertisements without setting forth the insurer’s full name and principal office location violates Insurance Law § 2122(b), which requires insurance agents and brokers to set forth the full name and the city, town or village of an insurer’s principal office in any advertisement that refers to such insurer. Moreover, the use of only an insurer’s logo also may violate Article 24 of the Insurance Law, which governs unfair methods of competition and unfair and deceptive acts and practices, as well as the Insurance Department’s regulations.
Facts:
The inquirer is an insurance agent or broker. The inquirer asks whether his agency’s radio, print and internet advertisements comply with the Insurance Law. The inquirer states that the radio advertisements mention insurance companies that the inquirer represents, but do not provide any rating information. However, the radio advertisements refer to the types of coverage that these insurers provide, as well as how the insurers process claims. The inquirer also advertises in newspapers in which the insurers’ names are mentioned. In particular, the inquirer asks whether the advertisements must include the principal office locations of the insurers.
The inquirer also reports that his website contains insurers’ logos (with the insurers’ permission), but the inquirer did not indicate whether the website sets forth the full name of these insurers. The inquirer asks whether the use of only the insurers’ logos violates the Insurance Law.
Analysis:
As a preliminary matter, the Insurance Department assumes that the insurers the inquirer represents are authorized to do business in New York State.
Insurance Law § 2122(b) is relevant to the inquiry. That provision, which requires all advertisements that refer to an insurer to contain the full name of the insurer, as well as the location of the insurer’s principal office, reads as follows:
Every agent of any insurer and every insurance broker shall, in all advertisements, public announcements, signs, pamphlets, circulars and cards, which refer to an insurer, set forth therein the name in full of the insurer referred to and the name of the city, town or village in which it has its principal office in the United States.
It is clear from the description of the inquirer’s advertisement that the inquirer “refers” to insurance companies in the advertisements pursuant to Insurance Law § 2122(b). That statute applies to all advertisements, regardless of the medium through which they are disseminated – whether radio, the Internet or print. See e.g., OGC Opinion No. 05-09-02 (Sept. 1, 2005); OGC Opinion No. 04-05-21 (May 24, 2004). The inquirer’s advertisements mention the names of the insurers, as well as the types of insurance coverage. As such, their failure to mention the city, town or village of the insurers’ principal addresses runs afoul of the Insurance Law. Further, the use of insurers’ logos without stating the insurers’ full names violates Insurance Law § 2122(b). See Office of General Counsel (“OGC”) Opinion No. 08-01-03.
Failure to comply with Insurance Law § 2122 also implicates Article 24 of the Insurance Law, which prohibits unfair methods of competition and unfair and deceptive acts and practices. Under Insurance Law § 2403, no person is permitted to engage in any trade practice that constitutes a “defined” or “determined” violation pursuant to Insurance Law § 2402(b) and (c). A “defined violation” means the commission of an act prohibited under any section of the Insurance Law specified in Insurance Law § 2402(b). Insurance Law § 2122 is a defined violation. As such, the Superintendent may, after notice and an opportunity to be heard, determine that the failure to comply with Insurance Law § 2122 also runs afoul of Article 24 of the Insurance Law.
Finally, Part 219 of the New York Codes Rules and Regulations (“NYCRR”) tit. 11 (Regulation 34-A) governs advertisements of life insurance and annuity contracts. 11 NYCRR § 219.3(a)(1) defines the term “advertisement” as follows:
Advertisement shall include, but not necessarily be limited to the following, when designed to be used or actually used, to induce the public to purchase, increase, modify, reinstate or retain a policy:
(i) printed and published material, audio visual material and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio scripts, television scripts, billboards and similar displays. . . . (Emphasis added.)
Thus, although the definition of “advertisement” in Regulation 34-A sets forth various types of advertisements, the list is not meant to be exhaustive. By implication, the list includes advertising via the Internet.
11 NYCRR § 219.4(p) requires that any advertisement that is made by or on behalf of an insurer must clearly identify the insurer, as well as the city, town or village of the insurer’s home office. The regulation also prohibits the use of any logo or other device that is deceptive or misleading as to the true identity of the insurer. That provision reads as follows:
In all advertisements made by an insurer, or on its behalf, the name of the insurer shall be clearly identified, together with the name of the city, town or village in which it has its home office in the United States. An advertisement shall prominently describe the policy advertised. If a specific policy or policy series is being advertised, the form or series number or other appropriate description shall be shown. An advertisement shall not use a trade name, an insurance group designation, name of the parent company or affiliate of the insurer, name of a particular division of the insurer, service mark, slogan, symbol or other device or reference if such use would have the tendency to mislead or deceive as to the true identity of the insurer, or create the impression that someone other than the insurer would have any responsibility for the financial obligation under a policy.
11 NYCRR § 215.13(a) (Regulation 34), which governs advertisements of accidents and health insurance, contains a similar provision.
Clearly, the reference to an insurer in advertisements, including radio, print and internet advertisements, without the use of the insurer’s full name and the location of the insurer’s principal office, runs afoul of Regulations 34-A. Additionally, any logo used in advertisements that is deceiving as to the identity of the insurer violates Regulation 34-A. Although there are no similar regulations for property/casualty and other types of insurance companies not governed by Regulations 34 or 34-A, the principles enunciated in these Regulations provide an appropriate guideline for all advertisements disseminated by insurers, agents and brokers authorized in New York State.
For further information you may contact Senior Attorney Camielle A. Campbell at the New York City office.
1 N.Y. Ins. Law § 2101(k) (McKinney 2006) defines “insurance producer” as “an insurance agent, insurance broker, reinsurance intermediary, excess lines broker, or any other person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance. . . .”