New York Considers Approval for Insurance Agents to Use Out-of-State Banks

New York insurance regulators are floating a proposal that would allow agents in the state to use banks that have no physical location inside of the Empire State.

If approved, the move would allow producers to hold money for their clients in Internet banks or financial institutions that are based elsewhere.

The change loosens the rules regarding monies that agents hold, such as some types of premium payments or refunds that are not immediately sent out.

The Independent Insurance Agents and Brokers of New York lauded the proposal, a regulation change which the group has been seeking for several years.

“This regulation will make it much easier for New York resident agents and brokers, as well as non-residents with New York licenses, to use out-of-state and electronic banks in their businesses,” said David M. Gelia. IIABNY’s chairman. “Clearly, the New York Insurance Department recognizes that technology has changed how banks and producers do business. IIABNY has worked long and hard to bring this regulation into line with technology, and we are very pleased that the department has taken this step.”