N.Y. Insurance Law § 2119: Insurance agents, brokers, consultants, life settlement brokers, and title insurance agents; written contract for compensation; excess ch...

§ 2119. Insurance agents, brokers, consultants, life settlement

brokers, and title insurance agents; written contract for compensation;

excess charges prohibited.

(a) (1) No person licensed as an insurance agent, broker or consultant

may receive any fee, commission or thing of value for examining,

appraising, reviewing or evaluating any insurance policy, bond, annuity

or pension or profit-sharing contract, plan or program or for making

recommendations or giving advice with regard to any of the above, unless

such compensation is based upon a written memorandum signed by the party

to be charged and specifying or clearly defining the amount or extent of

such compensation.

(2) A copy of every such memorandum or contract shall be retained by

the licensee for not less than three years after such services have been

fully performed.

(b) (1) No person licensed as an insurance agent, broker or a

consultant may receive any compensation, direct or indirect, as a result

of the sale of insurance or annuities to, or the use of securities or

trusts in connection with pensions for, any person to whom any such

licensee has performed any related consulting service for which he has

received a fee or contracted to receive a fee within the preceding

twelve months unless such compensation is provided for in the memorandum

or contract required pursuant to subsection (a) hereof.

(2) This chapter shall not prohibit the offset, in whole or in part,

of compensation payable under subsection (a) hereof by compensation

otherwise payable to such consultant as agent or broker as a result of

such sale of insurance or annuities or the use of securities or trusts

in connection with pensions, if any such offset is provided for in the

written memorandum or contract required under subsection (a) hereof.

(c) (1) No insurance broker may receive any compensation, other than

commissions deductible from premiums on insurance policies or contracts,

from any insured or prospective insured for or on account of the sale,

solicitation or negotiation of, or other services in connection with,

any contract of insurance made or negotiated in this state or for any

other services on account of such insurance policies or contracts,

including adjustment of claims arising therefrom, unless such

compensation is based upon a written memorandum, signed by the party to

be charged, and specifying or clearly defining the amount or extent of

such compensation.

(2) A copy of every such memorandum shall be retained by the broker

for not less than three years after such services have been fully

performed.

(3) This subsection shall not affect the right of any such broker to

recover from the insured the amount of any premium or premiums for

insurance effectuated by or through such broker.

(4) This subsection shall not affect the requirements of subsection

(a) or (b) hereof, subsection (g) of section two thousand one hundred

one or section two thousand one hundred eight of this article.

(d) No insurance broker shall, in connection with the sale,

solicitation or negotiation, issuance, delivery or transfer in this

state of any contract of insurance made or negotiated in this state,

directly or indirectly charge, or receive from, the insured or

prospective insured therein any greater sum than the rate of premium

fixed therefor by the insurer obligated as such therein, unless such

broker has a right to compensation for services created in the manner

specified in subsection (c) of this section.

(e)(1) No person licensed as a life settlement broker may receive any

compensation for examining, appraising, reviewing or evaluating any life

settlement contract or for making recommendations or giving advice with

regard to such contract; or receive any compensation from any owner or

proposed owner for or on account of the solicitation or negotiation of,

or other services in connection with, any life settlement contract

subject to this chapter or for any other services on account of such

contract; unless such compensation is based upon a written memorandum

signed by the party to be charged and specifying or clearly defining the

amount or extent of such compensation. A copy of every such memorandum

shall be retained by the licensee for not less than three years after

such services have been fully performed.

(2) No person licensed as a life settlement broker may receive any

compensation, direct or indirect, for or on account of the solicitation

or negotiation of, or other services in connection with a life

settlement contract subject to this chapter from any person for whom any

such licensee has performed any related consulting service for which the

licensee has received a fee or contracted to receive a fee within the

preceding twelve months unless such compensation is provided for in the

written memorandum required pursuant to paragraph one of this

subsection.

(3) No person licensed as a life settlement broker may receive any

compensation, direct or indirect, from a life settlement provider or any

other person with respect to any life settlement contract if the life

settlement broker has already received or will receive compensation,

direct or indirect from, or on behalf of, the owner with respect to that

life settlement contract.

(f) No title insurance agent may receive any compensation or fee,

direct or indirect, for or on account of services performed in

connection with the issuance of a title insurance policy, unless such

compensation is: (1) for ancillary services not encompassed in the rate

of premium approved by the superintendent; and (2) based upon a written

memorandum signed by the party to be charged, and specifying or clearly

defining the amount or extent of such compensation to be charged for

each ancillary service as well as the total amount or extent of the

compensation to be charged. A copy of every such memorandum shall be

retained by the licensee for not less than three years after such

services have been fully performed. For purposes of this subsection,

legal services performed by a New York state licensed attorney who is

also engaged as a title insurance agent shall not be considered

ancillary services.