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Top 5 Technical Questions
Can an insurance agency raffle off an iPad or some other highly coveted gadget without violating the laws against rebating?
Answer: Yes, if the raffle is open to the general public (that is, not limited to agency clients) and if entry in the raffle is not tied to the sale of insurance.
Visit the Rebating & Discrimination page in the Member Answer Center on the IIABNY website for New York State Department of Financial Services opinions on this.
Do I need a license for another state if one of my commercial lines clients has an incidental exposure there, such as a salesperson?
Answer: It depends upon the state. Most states are like New York – an out-of-state producer does not need a New York license if he or she is licensed in the state where the insured has its main location, the policy insures risks in that state, and the New York exposure is not the majority of the risks insured under the policy.
However, there are some states that require a license if there is any exposure in that state. Examples include Texas and Washington State. Check with the insurance regulators in individual states to find out what is required.
Is it legal for an insurer to send a non-renewal notice and a conditional renewal notice on the same policy?
Answer: Generally, no. The DFS issued an opinion about a situation where an insurer did this on a commercial general liability policy. The department attorney wrote:
“The insurer failed to properly inform the insured as to what action the insurer intended. The insurer cannot both renew and nonrenew or conditionally renew and nonrenew a policy. The notice provisions and statutes must be literally complied with and any ambiguities in language are construed against the insurer.… Therefore, the notice is ineffective to nonrenew or conditionally renew the policy.”
Can someone without a producer’s license own an insurance agency?
Yes, but she cannot receive commissions. Rather, she may receive a share of the agency’s profits. For example, if the agency is a corporation and she is a shareholder, she may receive any dividends the corporation declares, but she may not receive any commissions. The DFS issued an opinion
about this in 2004.
Under the Affordable Care Act, can an employee buy individual health coverage through the state exchange if his employer offers him coverage? Does it matter how many employees the employer has?
Answer: Almost anyone may purchase coverage through the individual exchange, whether or not they can get coverage through work. The only people who cannot are those who are: 1) Residing in the U.S. in violation of its laws; or 2) incarcerated. Anyone else is free to buy (or not buy) through the exchange. However, if the employer’s plan covers at least 60 percent of the insurer’s allowed charges, and if the employee contribution for self-only coverage is less than 9.5 percent of that employee’s gross household income, the employee will not qualify for a premium tax credit. That’s a pretty strong incentive for employees to go with the employer’s plan.
Employer size does not affect an employee’s ability to buy coverage through the exchange. However, employers with more than 50 full-time equivalent employees face a tax penalty if one or more full-time employees get premium tax credits by purchasing coverage through the exchange. Employers with fewer than 50 full-time equivalents do not have to worry about that.