N.Y. Insurance Law § 1101: Definitions; doing an insurance business

§ 1101. Definitions; doing an insurance business. (a) In this article:

(1) "Insurance contract" means any agreement or other transaction

whereby one party, the "insurer", is obligated to confer benefit of

pecuniary value upon another party, the "insured" or "beneficiary",

dependent upon the happening of a fortuitous event in which the insured

or beneficiary has, or is expected to have at the time of such

happening, a material interest which will be adversely affected by the

happening of such event.

(2) "Fortuitous event" means any occurrence or failure to occur which

is, or is assumed by the parties to be, to a substantial extent beyond

the control of either party.

(3) "Contract of warranty, guaranty or suretyship" means an insurance

contract only if made by a warrantor, guarantor or surety who or which,

as such, is doing an insurance business.

(b) (1) Except as otherwise provided in this subsection, any of the

following acts in this state, effected by mail from outside this state

or otherwise, by any person, firm, association, corporation or

joint-stock company shall constitute doing an insurance business in this

state and shall constitute doing business in the state within the

meaning of section three hundred two of the civil practice law and

rules:

(A) making, or proposing to make, as insurer, any insurance contract,

including either issuance or delivery of a policy or contract of

insurance to a resident of this state or to any firm, association, or

corporation authorized to do business herein, or solicitation of

applications for any such policies or contracts;

(B) making, or proposing to make, as warrantor, guarantor or surety,

any contract of warranty, guaranty or suretyship as a vocation and not

as merely incidental to any other legitimate business or activity of the

warrantor, guarantor or surety;

(C) collecting any premium, membership fee, assessment or other

consideration for any policy or contract of insurance;

(D) doing any kind of business, including a reinsurance business,

specifically recognized as constituting the doing of an insurance

business within the meaning of this chapter; or

(E) doing or proposing to do any business in substance equivalent to

any of the foregoing in a manner designed to evade the provisions of

this chapter.

(2) Notwithstanding the foregoing, the following acts or transactions,

if effected by mail from outside this state by an unauthorized foreign

or alien insurer duly licensed to transact the business of insurance in

and by the laws of its domicile, shall not constitute doing an insurance

business in this state, but section one thousand two hundred thirteen of

this chapter shall nevertheless be applicable to such insurers:

(A) transactions by any life insurance company organized and operated,

without profit to any private shareholder or individual, exclusively for

the purpose of aiding any charitable, religious, educational or

scientific institution organized and operated, without profit to any

private shareholder or individual, by issuing insurance or annuity

contracts directly from its home office, without agents or

representatives in this state, only to or for the benefit of such

institutions and to individuals engaged in their service;

(B) transactions with respect to group life, group annuity, group

accident and health or blanket accident and health insurance (other than

any transaction with respect to a group annuity contract funding

individual retirement accounts or individual retirement annuities, as

defined in section four hundred eight of the Internal Revenue Code,

funding annuities in accordance with subdivision (b) of section four

hundred three of such code or providing a plan of retirement annuities

under which the payments are derived wholly from funds contributed by

the persons covered):

(i) where such groups conform to the definitions of eligibility

contained in;

(I) the following paragraphs of subsection (b) of section four

thousand two hundred sixteen of this chapter:

(aa) paragraph (1) or (2);

(bb) paragraph (3), if, with respect to those credit transactions

entered into in this state, the policy fully conforms with the

requirements of sections three thousand two hundred one, three thousand

two hundred twenty and four thousand two hundred sixteen of this

chapter;

(cc) paragraphs (4), (5), (6), (7), (8), (9) and (10).

(II) the following subparagraphs of paragraph (1) of subsection (c) of

section four thousand two hundred thirty-five of this chapter:

(aa) subparagraph (A), (B), (C) or (D);

(bb) subparagraph (E), if, with respect to those credit transactions

entered into in this state, the policy fully conforms with the

requirements of sections three thousand two hundred one, three thousand

two hundred twenty-one and four thousand two hundred thirty-five of this

chapter;

(cc) subparagraphs (F), (G) and (H).

(III) section four thousand two hundred thirty-seven (except

subparagraph (F) of paragraph three of subsection (a) thereof) or four

thousand two hundred thirty-eight (except paragraphs six and seven of

subsection (b) thereof) of this chapter; and

(ii) where the master policies or contracts were lawfully issued

without this state in a jurisdiction where the insurer was authorized to

do an insurance business;

(C) transactions involving the continuance or servicing of life or

accident and health insurance policies or annuity contracts lawfully

issued or delivered in this state by an authorized insurer and occurring

subsequent to the termination of such insurer's authority to do an

insurance business in this state. Notwithstanding the foregoing, the

superintendent's approval granted pursuant to section one thousand one

hundred five of this article may authorize transactions involving the

continuance or servicing of life insurance policies or annuity contracts

to be effected from outside this state by telephone, video call,

facsimile, web portal, electronic transfer of funds, or by any other

electronic means approved by the superintendent, provided that the

insurer shall not have any other contact or interaction with a person in

this state other than as specified and in the manner provided in this

paragraph;

(D) transactions with respect to policies or annuity contracts

lawfully issued without this state occurring subsequent to issue, if, at

the time of issue, such policies or contracts covered subjects of

insurance or risks not resident or located in this state.

Notwithstanding the foregoing, transactions described in this

subparagraph involving the continuance or servicing of life insurance

policies or annuity contracts may be effected from outside this state by

telephone, video call, facsimile, web portal, electronic transfer of

funds, or by any other electronic means approved by the superintendent,

provided that the insurer shall not have any other contact or

interaction with a person in this state other than as specified and in

the manner provided in this paragraph;

(E) transactions with respect to policies of insurance on risks

located or resident within or without this state (except master policies

or contracts of group insurance which are subject to the requirements of

subparagraph (B) hereof), which policies are principally negotiated,

issued and delivered without this state in a jurisdiction in which the

insurer is authorized to do an insurance business;

(F) transactions authorized by section two thousand one hundred five

of this chapter with respect to excess lines insurance;

(G) transactions with respect to the reinsurance of risks of

authorized insurers to the extent that such reinsurance is permitted by

this chapter;

(H) transactions with respect to insurance contracts negotiated or

placed pursuant or otherwise subject to subsection (b), (c), (j) or (k)

of section two thousand one hundred seventeen of this chapter;

(I) transactions with respect to any policy of insurance or annuity

contract issued prior to September first, nineteen hundred seventy.

(3) Notwithstanding the foregoing, the making of an agreement pursuant

to which a lessor of personal property, a creditor making a loan or

other credit transaction on personal property or, in the absence of a

waiver by the lessor or creditor, the lessor's or creditor's assignee

waives the obligation of the lessee or debtor for the gap amount, as

such term is defined in paragraph fifty-two of subsection (a) of section

one hundred seven of this chapter, shall not constitute, or be deemed to

constitute, the doing of an insurance business if:

(i) the lessor or creditor or, in the absence of a waiver by the

lessor or creditor, the assignee waives any and all obligations of the

lessee or debtor for the gap amount and the lessee or debtor is

discharged from any and all further obligation to pay the gap amount;

(ii) the waiver applies only in the event of a total loss of the

personal property occasioned by its theft or physical damage;

(iii) in the event the lessor, creditor or assignee purchases lessor

or creditor gap insurance, the charge to the lessee or debtor for the

waiver does not exceed the cost of the lessor or creditor gap insurance

coverage; provided, however, that nothing contained herein shall be

construed to prohibit the lessor from including the charge for the

waiver in the capitalized cost as that term is defined in subdivision

eleven of section three hundred thirty-one of the personal property law.

(3-a) Notwithstanding the foregoing, the marketing, sale, offer for

sale, issuance, making, proposing to make or administration of a service

contract pursuant to article seventy-nine of this chapter or warranty,

service contract or maintenance agreement conditioned upon or otherwise

associated with the sale or supply of heating fuel shall not constitute

doing an insurance business in this state.

(4) In the application of this chapter, the fact that no profit is

derived from the making of insurance contracts, agreements or

transactions, or that no separate or direct consideration is received

therefor, shall not be deemed conclusively to show that the making

thereof does not constitute the doing of an insurance business.

(5) Notwithstanding the foregoing, an unauthorized insurer, which (A)

is affiliated with an insurer licensed in this state, and (B) has

satisfied all applicable requirements for placements by excess line

brokers as set forth in section two thousand one hundred eighteen of

this chapter, may provide from an office within the state, services to

support its insurance business. Such services shall not be deemed under

this chapter as doing an insurance business in this state. For the

purposes of this section these services include, but are not 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. Such services shall not 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 chapter, 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 chapter. All obligations of such a

licensee under article twenty-one of this chapter shall remain in full

force and effect. Any document issued by the 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.

(6) Notwithstanding the foregoing, the election by the president of

the civil service commission to provide health benefits directly to New

York state health benefit plan participants shall not constitute the

doing of insurance business within the meaning of article eleven of the

insurance law.

(7)(A) Notwithstanding the foregoing, the making of a swap shall not

constitute doing an insurance business in this state.

(B) For the purposes of this paragraph, "swap" shall have the meaning

set forth in 7 U.S.C. § 1a.

(8) Notwithstanding the foregoing, the maintenance of a website

outside the state by an unauthorized foreign or alien insurer duly

licensed to transact the business of insurance in and by the laws of its

domicile, by which a member of a group may self-enroll, through an

automated process, in a group life, group annuity, or group accident and

health insurance policy or contract, as defined in paragraphs one, two,

and three of subsection (a) of section one thousand one hundred thirteen

of this article, shall not constitute doing an insurance business in

this state, but section one thousand two hundred thirteen of this

chapter nevertheless shall apply to the insurer; provided that:

(A) the group conforms to the definition of eligibility contained in:

(i) paragraph one, two, four (with respect to a policy issued to a

trustee or trustees of a fund established or participated in by two or

more employers, one or more labor unions, or by one or more employers or

labor unions, provided that all such employers or labor unions are in

the same industry), or five of subsection (b) of section four thousand

two hundred sixteen of this chapter;

(ii) subparagraph (A), (B), (C), or (D) (with respect to a policy

issued to a trustee or trustees of a fund established or participated in

by two or more employers, one or more labor unions, or by one or more

employers or labor unions, provided that all such employers or labor

unions are in the same industry) of paragraph one of subsection (c) of

section four thousand two hundred thirty-five of this chapter; or

(iii) paragraphs one, two, three or four of subsection (b) of section

four thousand two hundred thirty-eight of this chapter, but not

including a group annuity contract: (I) funding individual retirement

accounts or individual retirement annuities, as defined in section four

hundred eight of the Internal Revenue Code; (II) funding annuities in

accordance with subdivision (b) of section four hundred three of such

code; or (III) providing a plan of retirement annuities under which the

payments are derived wholly from funds contributed by the persons

covered.

(B) the insurer lawfully issued the master policy or contract without

this state in a jurisdiction where the insurer was authorized to do an

insurance business;

(C) the insurer's website clearly states that the insurer is not

authorized to transact the business of insurance in this state; and

(D) the insurer does not have any other contact or interaction with

the member other than as specified and in the manner provided in

paragraph two of this subsection.