2012 New York Consolidated Laws
ISC - Insurance
Article 21 - (2101 - 2137) AGENTS, BROKERS, ADJUSTERS, CONSULTANTS AND INTERMEDIARIES
2117 - Acting for or aiding unlicensed or unauthorized insurers or health maintenance organizations.

 
    §  2117.  Acting  for or aiding unlicensed or unauthorized insurers or
  health maintenance organizations. (a) No person,  firm,  association  or
  corporation  shall  in this state act as agent for any insurer or health
  maintenance organization which is not licensed or authorized  to  do  an
  insurance  or health maintenance organization business in this state, in
  the doing of any insurance or health maintenance  organization  business
  in  this  state  or  in  soliciting,  negotiating  or  effectuating  any
  insurance, health maintenance organization or annuity contract or  shall
  in  this  state act as insurance broker in soliciting, negotiating or in
  any way effectuating any insurance, health maintenance  organization  or
  annuity  contract  of,  or  in  placing  risks with, any such insurer or
  health maintenance organization, or shall in this state in  any  way  or
  manner  aid  any  such  insurer  or  health  maintenance organization in
  effecting any insurance,  health  maintenance  organization  or  annuity
  contract.
    (b)  Notwithstanding  the  provisions  of  subsection  (a) hereof, any
  insurance broker licensed under subparagraph (B)  of  paragraph  one  of
  subsection  (b) of section two thousand one hundred four of this article
  may negotiate a contract of insurance, or place insurance, in an insurer
  not authorized to do business in this state, as follows:
    (1) a contract of reinsurance on risks produced by such broker;
    (2) insurance against loss of or damage to property having a permanent
  situs outside of this state; and
    (3) marine insurance of the following  kind  or  kinds,  where  it  is
  reasonable  so  to  do with due regard to the interests of all concerned
  and whether or not, at the time of such negotiation, the subject  matter
  of such insurance is within or without this state:
    (A)  insurance against perils of navigation, transit or transportation
  upon hulls, freights or disbursements,  or  other  shipowner  interests,
  goods,  wares, merchandise and all other personal property and interests
  therein, in course of exportation from or importation into any  country,
  or  transportation  coastwise, including transportation by land or water
  from point of origin to final destination and including  war  risks  and
  marine builders' risks; and
    (B)  insurance  in  connection with ocean going vessels against any of
  the risks specified in paragraph twenty-one of subsection (a) of section
  one thousand one hundred thirteen of this chapter.
    (c) Notwithstanding the  provisions  of  subsection  (a)  hereof,  any
  insurance  broker  licensed  under  subparagraph (B) of paragraph one of
  subsection (b) of section two thousand one hundred four of this  article
  may  negotiate  a  contract  of  insurance  or  place  insurance  in  an
  unauthorized insurer as follows:
    (1) insurance against legal liability arising out  of  the  ownership,
  operation  or  maintenance  of  any  motor  vehicle or aircraft which is
  neither principally garaged nor principally used in this state,  arising
  out  of  any activity carried on wholly outside of this state or arising
  out of the ownership, operation or maintenance of any property having  a
  permanent situs outside of this state, but in case such property or risk
  is  located in any other state, then only in an insurer authorized to do
  such business in such state  or  in  an  insurer  in  which  a  licensed
  insurance broker of such state may lawfully place such insurance; and
    (2)  fidelity  bonds  guaranteeing  the fidelity of persons holding or
  exercising positions of public or private trust wholly outside  of  this
  state,  and surety bonds guaranteeing or assuming the performance of any
  contract or other obligation of the kind  included  under  subparagraphs
  (B)  and  (C)  of  paragraph  sixteen  of  subsection (a) of section one
  thousand one hundred thirteen of this chapter, to  be  performed  wholly
  outside  of  this  state; but if such positions are held or exercised in

  another state or if such contract or other obligation is to be performed
  wholly or partly in another state, then only if such insurance is placed
  in an insurer authorized to do such business in such state, or in  which
  a licensed broker of such state may lawfully place such insurance.
    (d)  Notwithstanding  the  provisions  of  subsection  (a) hereof, any
  licensed  reinsurance  intermediary  may   negotiate   a   contract   of
  reinsurance,  or  place  reinsurance, in an insurer not authorized to do
  business in this state.
    (e) This section shall not authorize any person, firm, association  or
  corporation to guarantee or otherwise validate or secure the performance
  or  legality  of  any  agreement,  instrument  or policy of insurance or
  annuity contract of any insurer not authorized to do  business  in  this
  state,   or   to  bind  risks,  validate,  effect  by  countersignature,
  endorsement or otherwise, any  binder,  memorandum,  cover  note,  slip,
  certificate,  policy or other instrument of insurance of any insurer not
  authorized or licensed to do business in this state, or to make  binding
  declarations  of risks thereunder, or permit any unauthorized insurer to
  do any insurance business by its agent acting  within  this  state;  but
  licensed  insurance  brokers  acting pursuant to subsections (b) and (c)
  hereof may  issue  to  their  clients,  the  insureds,  confirmation  of
  insurance so lawfully placed.
    (f)  This  chapter  shall  not  prohibit  or  prevent  an attorney and
  counsellor  at  law  from  representing  an  unauthorized   insurer   in
  litigation or settlement of claims in this state.
    (g)  Any  person,  firm,  association  or  corporation  violating  any
  provision of this section  shall,  in  addition  to  any  other  penalty
  provided  by  law,  forfeit  to  the people of the state the sum of five
  hundred dollars for each transaction.
    (h) (1) This section shall not prohibit any person, firm,  association
  or  corporation  from acting within the scope of the authority conferred
  by section two thousand one hundred five of this article.
    (2)  Notwithstanding  subsection  (a)  of  this  section,  a  licensed
  insurance  broker  may  deliver  to  the  insured an insurance policy or
  contract procured by any person, firm, association or corporation acting
  pursuant to the authority conferred by section two thousand one  hundred
  five of this article.
    (3)  Notwithstanding  subsection  (a)  of  this  section and any other
  provision of law to  the  contrary,  any  excess  line  broker  licensed
  pursuant  to  section  two thousand one hundred five of this article may
  exercise binding authority and execute an authority to bind coverage  on
  behalf  of  an insurer not licensed or authorized to do business in this
  state pursuant to the  provisions  of  subsection  (f)  of  section  two
  thousand one hundred eighteen of this article.
    (i) Notwithstanding subsection (a) of this section, a licensed insurer
  may  provide,  from  its  office  in  the state, services to support the
  insurance  business  of  an  unauthorized  insurer  with  which  it   is
  affiliated,  provided  that  the  unauthorized insurer has satisfied all
  applicable requirements for placements by excess  line  brokers  as  set
  forth in section two thousand one hundred eighteen of this article. Such
  services  may include, but shall not be limited to, computer operations,
  clerical and staffing support, underwriting, negotiating contract terms,
  quoting premiums, binding coverage, drafting and  issuing  policies  and
  claims  handling,  investigation  and  payment,  among  other incidental
  services. Services expressly prohibited under this section  include  the
  marketing,   soliciting  or  advertising  by  the  unauthorized  insurer
  directly to policyholders. Notwithstanding paragraph two  of  subsection
  (a) of section two thousand one hundred twenty-two of this article, such
  unauthorized insurers shall be permitted to advertise to, and market and

  solicit  through,  excess  line brokers licensed pursuant to section two
  thousand one hundred five of this article, from  an  office  within  the
  state.  All obligations of such licensee under this article shall remain
  in full force and effect. Any document issued by an unauthorized insurer
  that  indicates  any location within this state in which it conducts its
  operations shall include a prominent notice  that  the  insurer  is  not
  licensed  by the state of New York, in no smaller than 10 point type, in
  accordance with regulations as may be promulgated by the superintendent.
    (j) Nothing in this section shall prohibit  a  person  who  is  not  a
  resident  of  this  state  from  selling,  soliciting  or  negotiating a
  property/casualty insurance contract of an insurer not authorized to  do
  business in this state, provided that: (1) the insured's home state is a
  state  other  than  this  state; and (2) the person is licensed to sell,
  solicit or negotiate excess line insurance in the insured's home state.