Relates to permitting insurance brokers to engage in certain activities in New York; permits brokers to act as agent for an insurer or health maintenance organization which is not licensed or authorized in this state with regard to certain activities involving multi-national entities.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7789
SPONSOR: Cahill TITLE OF BILL: An act to amend the insurance law, in relation to
permitting brokers to engage in certain activities in New York
PURPOSE:
The purpose of the bill is to permit a licensed insurance broker to
engage in certain activities with respect to the issuance of certain
group policies or contracts by an alien insurer to certain multinational
corporations.
SUMMARY OF PROVISIONS:
Section 1 of the bill would add a new Insurance Law Section 2117(k) to
permit a licensed insurance broker, under certain specified conditions,
to: (1) provide information to a multinational entity resident outside
the United States with respect to a group life, annuity, or accident and
health insurance policy or contract issued or delivered, or that will be
issued or delivered, by an alien insurer; (2) meet and discuss insurance
needs with the multinational entity; (3) refer the multinational entity
to the alien insurer and provide information to the multinational entity
about the alien insurer; (4) respond to requests for information by
representatives of the multinational entity concerning quotes and any
other specific terms and conditions of such a policy or contract being
negotiated in the jurisdiction where the policy or contract will be
issued or delivered by the alien insurer; (5)provide information
concerning renewals of existing such policies or contracts issued by the
alien insurer; and (6) manage the employee benefits program of the
multinational entity.
A multinational entity means an institution (as defined in Insurance Law
Section 107(a)(24)) that is a member of a multinational group of insti-
tutions operating globally where: (i) at least one institution in the
group is formed under the laws of the United States or has significant
operations in the United States; and (ii) at least one institution in
the group has offices outside the United States. A "group of insti-
tutions" means a parent corporation and its subsidiaries (as such terms
are defined in Section 107(a)(40)).
Section 2 would amend Insurance Law Section 1101(b)(2)(H) to reference
new Insurance Law Section 2117(k).
Section 3 would set forth an immediate effective date.
EXISTING LAW:
Insurance Law Section 1101 defines the doing of an insurance business
and sets forth certain acts or transactions that, if effected by mail
from outside New York State by an unauthorized insurer licensed to tran-
sact the business of insurance in its domicile, will not constitute the
doing of an insurance business in New York State. Insurance Law Section
1102 prohibits any individual or business entity from doing an insurance
business in New York State unless authorized by a license in force
pursuant to the Insurance Law or exempted from licensing by the Insur-
ance Law.
Insurance Law Section 2102 prohibits any individual or business entity
from acting as an insurance agent or broker in New York State without
having authority to do so by virtue of a license issued and in force
pursuant to the Insurance Law.
Insurance Law Section 2117 generally prohibits any individual or busi-
ness entity from acting as an agent for any insurer or health mainte-
nance organization ("HMO") that is not licensed in New York State in the
doing of an insurance or HMO business in New York State or in solicit-
ing, negotiating, or effectuating any insurance policy or contract.
Section 2117 also generally prohibits such an individual or business
entity from acting as an insurance broker in soliciting, negotiating, or
in any way effectuating any insurance policy or contract of or placing
risks with, any such insurer or HMO, and also prohibits in any way or
manner the aiding of any such insurer or HMO in effecting any insurance
policy or contract. Section 2117 provides certain limited exemptions
from this general prohibition.
JUSTIFICATION:
New York State is a hub of international business, and many multina-
tional institutions, including corporations, partnerships, and limited
liability companies, have offices in or near New York State. These
offices of the multinational entities often have an interest in securing
life insurance, accident and health insurance, and annuity contracts for
employees who reside outside the United States,including employees who
may be in the United States temporarily.
Under Insurance Law Section 2117, among other things, a licensed insur-
ance broker generally may not solicit, negotiate, or in any way effectu-
ate any insurance policy or contract of or place risks with, any insurer
that is not licensed or authorized to do an insurance business in New
York State, nor shall any person in any way or manner aid any such
insurer in effectuating any insurance in this state. However, Insurance
Law Section 2117 provides certain exemptions from the general prohibi-
tion if specific conditions are satisfied.
This bill would add a new limited exemption from the general prohibition
set forth in Insurance Law Section 2117. The new exemption would permit
a licensed insurance broker to engage in certain specified activities in
New York State related to group life, group annuity, or group accident
and health insurance policies or contracts provided that an alien insur-
er issued or delivered the policy or contract to a policyholder or
proposed policyholder that is a multinational entity resident outside
the United States.
In addition, the insurance policy or contract may cover only the insti-
tution's employees and their dependents provided that the employees
reside outside the United States, except that the policy or contract may
cover those employees who are temporarily in the United States. The
exemption would set forth additional conditions that must be met by the
alien insurer and would limit the activities of the licensed insurance
broker.
This bill would continue to protect policyholders and certificate hold-
ers while allowing insurers to best meet the needs of their New York
customers with a global presence, thereby allowing New York to continue
functioning as a center of international business.
LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
7789
2015-2016 Regular Sessions
IN ASSEMBLY
May 27, 2015
___________
Introduced by M. of A. CAHILL -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to permitting brokers to
engage in certain activities in New York
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 2117 of the insurance law is amended by adding a
2 new subsection (k) to read as follows:
3 (k)(1) Notwithstanding subsection (a) of this section, any insurance
4 broker licensed under subparagraph (A) of paragraph one of subsection
5 (b) of section two thousand one hundred four of this article with
6 respect to life insurance or annuities, or subparagraph (A) or (B) of
7 paragraph one of subsection (b) of such section with respect to accident
8 and health insurance may engage in the activities specified in paragraph
9 two of this subsection with respect to an alien insurer not authorized
10 to do an insurance business in this state, provided that:
11 (A) the activities relate to a policy or contract of group life, group
12 annuity, or group accident and health insurance where the policyholder
13 or proposed policyholder is a multinational entity resident outside the
14 United States, the policy or contract covers the multinational entity's
15 employees and their dependents, and the employees reside outside of the
16 United States, except that the policy or contract may provide coverage
17 to employees who are temporarily inside the United States;
18 (B) the policy or contract shall not be underwritten or negotiated in
19 this state or issued or delivered in the United States;
20 (C) the alien insurer is authorized to transact the kinds of insurance
21 business in the jurisdictions where the policies or contracts will be
22 issued or delivered and the policies or contracts are issued in conform-
23 ance with the laws of such jurisdictions;
24 (D) before engaging in any of the activities specified in paragraph
25 two of this subsection, the licensed insurance broker provides written
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11241-02-5
A. 7789 2
1 notice to the multinational entity that the alien insurer is not
2 licensed in or authorized to do business in this state; the policy or
3 contract is not protected by the New York state guaranty funds; the
4 policy or contract has not been approved by the superintendent; and the
5 policy or contract may not be subject to all of the laws of this state;
6 (E) the alien insurer shall not maintain any office in this state; and
7 (F) except as specifically provided in this section, the licensed
8 insurance broker shall not call attention to the alien insurer by any
9 advertisement or public announcement in this state.
10 (2) Subject to paragraph one of this subsection, the licensed insur-
11 ance broker may engage in this state in only the following activities
12 with respect to the alien insurer:
13 (A) provide information to the multinational entity with respect to a
14 policy or contract of group life, group annuity, or group accident and
15 health insurance issued or delivered or that will be issued or delivered
16 by the alien insurer;
17 (B) meet and discuss insurance needs with the multinational entity,
18 including providing information directly to the entity in person or
19 otherwise about the policies or contracts offered by the alien insurer;
20 and facilitating introductions with the multinational entity's human
21 resources and benefits manager in each country in which the multina-
22 tional entity has employee benefit needs;
23 (C) refer the multinational entity to the alien insurer and provide
24 information to the multinational entity about the alien insurer;
25 (D) respond to requests for information by representatives of the
26 multinational entity concerning quotes and any other specific terms and
27 conditions of a group life, group annuity, or group accident and health
28 insurance policy or contract being negotiated in the jurisdiction where
29 the policy or contract will be issued or delivered by the alien insurer;
30 (E) provide information concerning renewals of existing policies or
31 contracts of group life, group annuity, or group accident and health
32 insurance issued by the alien insurer; and
33 (F) manage the employee benefits program of the multinational entity,
34 including aggregating and reporting employee benefits and financial
35 information about the program.
36 (3) Any activity in which a licensed insurance broker engages with
37 respect to an alien insurer pursuant to this subsection shall be deemed
38 to be included within the meaning of "any other transaction of business"
39 for the purposes of section one thousand two hundred thirteen of this
40 article.
41 (4) For purposes of this subsection:
42 (A) "multinational entity" shall mean an institution that is a member
43 of a multinational group of institutions operating globally where: (i)
44 at least one institution in the group is formed under the laws of the
45 United States or has significant operations in the United States; and
46 (ii) at least one institution in the group has offices outside the
47 United States; and
48 (B) "group of institutions" shall mean a parent corporation and its
49 subsidiaries.
50 § 2. Subparagraph (H) of paragraph 2 of subsection (b) of section 1101
51 of the insurance law, as amended by section 2 of part I of chapter 61 of
52 the laws of 2011, is amended to read as follows:
53 (H) transactions with respect to insurance contracts negotiated or
54 placed pursuant or otherwise subject to subsection (b), (c), [or] (j) or
55 (k) of section two thousand one hundred seventeen of this chapter;
56 § 3. This act shall take effect immediately.
