Insurance Regulation

Reciprocity

When the state in which the person resides accords the same privilege to residents of New York

Rebating

defined as any inducement offered in the sale of insurance products that is not specified in the policy. It is illegal to offer an inducement to a person to encourage the purchase of an insurance policy. Rebates include money, sharing of commissions, promises, inducements and personal services. Offer and acceptance of a rebate is illegal. Articles of merchandise with a conspicuously stamped or printed advertisement of the insurer, agent or broker, are not considered rebates if they are valued at $25 or less.

Insurers must keep records of claims

for 6 years

Guaranty Association

formed to protect policyowners, insureds, beneficiaries, and anyone entitled to payment under an insurance policy from the incompetence and insolvency of insurers. The association will pay covered claims up to certain limits set by state law. It is illegal for insurers to state that their policies are guaranteed by the existence of a Guaranty Association funded by its members - authorized insurers

Insurance Frauds Prevention Act

intended to permit the superintendent and the department to utilize their expertise to investigate and discover insurance frauds, halt fraudulent activities more effectively, and receive assistance from federal and state law enforcement agencies

Agent

producer who owns his own field office

Public Adjuster

represents the insured in the investigating a claim

Insurers must keep policy records for

6 years

Appointment of agents

A notice of appointment within 15 days from the date the agency contract is executed or the first insurance application is submitted

Reasons to terminate an agent's certificate of appointment

Agent's license expires and is not renewed Appointment is terminated by the insurer under the terms of agent's contract Agent's license is suspended or revoked

Superintendent

Appointed by the governor, and continues in office until the end of the governor's term. Has the power and authority to recommend, withdraw, or amend regulations for following purposes: - regulate the internal affairs of the department of insurance, including governing the procedures used in the practice of the department - to prescribe forms and regulations - to interpret state insurance laws and provisions

Civil penalties

If a person has been charged with 5 separate civil penalties within 5 years, the superintendent may levy an additional penalty of uup to $50,000.

Revoked license

If license has been revoked, cannot obtain any license for a period of 1 year after revocation.

Cease and desist order

Superintendent will issue a cease and desist order if they are in violation, and the person must stop doing whatever the superintendent suspects is in violation of the insurance laws.

Independent adjuster

Any person, firm, association or corporation, who for a commission, acts on behalf of an insurer in the work of investigating and adjusting claims

Purpose of a license

To write business other than controlled business

If a licensed individual becomes a resident of NY, he/she must apply for a license:

within 90 days of becoming a legal resident, but does not have to fulfill prelicensing or examination requirements for lines of authority held in the previous state, unless the superintendent determines otherwise

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce:

without receiving written consent from an insurance regulatory authority

Temporary license

May only be used to service existing business. May issue a temporary license to an agent or broker or born without requiring an examination, in the following cases: To the surviving spouse, next of kin or court appointed personal representative of an agent who dies, or becomes mentally or physically disabled To a member or employee of a business entity licensed as an insurance agent upon death, disability or termination of a designated individual in the business entity To the designee of an agent entering active military service. Not issued for a term of more than 90 days unless the superintendent renews additional 90-day terms not to exceed an aggregate of 15 months.

Hearings

If superintendent suspects that an insurer or its agent has committed a violation or is engaged in an unfair trade practice. Hearing will be held at least 10 days after notice is served. Once it has been determined that a person is liable for a civil penalty, that determination may be entered 120 days later as a judgement and enforced without court proceedings.

Solvent

Insurer is considered solvent if it has the assets to meet its financial obligations. If at any time an insurer becomes unable to meet financial obligations, it is considered insolvent.

Renewal

Inusrance agent's or broker's license must be renewed every 2 years. The licenses of insurance agents born in odd-numbered years will expire on their birthdays in odd-numbered years. Same for even year people. Must file application for renewal of license with superintendent at least 60 days before the license expires. 10 dollar late filing fee. To renew a license, any resident or nonresident agent must complete 15 hours of instruction by an approved provider of continuing educatino biennially (every 2 years). Each licensee must pay a fee of $10 per license for continuing education certificate filing and recording charges.

Controlled business

any coverage written on a producer's own life, health or property, and/or that of the producer's immediate family or business associates. A licensee is not allowed to collect commissions on controlled business above the state-specified limit. when an agent receives more than 10% of the aggregate commissions during a 12-month period from insurance business sold to family, or business associates and their family members

Insurance producer

any person required to be licensed to sell, solicit, or negotiate insurance - including agents brokers and intermediaries. Officers are not required to be licensed A salaried employee who advertises and solicits insurance

Public adjuster:

for commission acts on behalf of the insured in negotiating a settlement of a claim for loss or damage to property. All adjusters must file and pay a surety bond of $1000 to the Superintendent before a license is issued or renewed. A requirement of 15 hours continuing education must be completed before an adjuster's license may be renewed.