New York State Gov. Andrew Cuomo signed a bill this month that allows property/casualty insurers, brokers and agents to give gifts worth up to $25 to insureds or prospective clients during the insurance sales process.
The new law amends the existing anti-rebating provisions. Rebating, lowering commission or offering any valuable consideration or inducement for insureds or prospective clients have traditionally been prohibited in the state — with the only exception being keepsake gifts valued at less than $15.
The new law also removes the previous restriction that such gifts must have “conspicuously stamped or printed thereon the advertisement of the insurer, agent or broker.” Under the new law, the merchandise need not be strictly promotional for the insurer, agent or broker.
The new, amended law is as follows. Newly added parts in the law are in capital letters. Portions that have been removed from the previous law are in brackets:
“No authorized insurer, no licensed insurance agent, no licensed insurance broker, and no employee or other representative of any such insurer, agent or broker shall make, procure or negotiate any contract of insurance other than as plainly expressed in the policy or other written contract issued or to be issued as evidence thereof, or shall directly or indirectly, by giving or sharing a commission or in any manner whatsoever, pay or allow or offer to pay or allow to the insured or to any employee of the insured, either as an inducement to the making of insurance or after insurance has been effected, any rebate from the premium which is specified in the policy, or any special favor or advantage in the dividends or other benefit to accrue thereon, or shall give or offer to give any valuable consideration or inducement of any kind, directly or indirectly, which is not specified in such policy or contract, other than any [article of] VALUABLE CONSIDERATION, INCLUDING BUT NOT LIMITED TO merchandise OR PERIODICAL SUBSCRIPTIONS, not exceeding [fifteen] TWENTY-FIVE dollars in value [which shall have conspicuously stamped or printed thereon the advertisement of the insurer, agent or broker], or shall give, sell or purchase, or offer to give, sell or purchase, as an inducement to the making of such insurance…”
Topics New York Agencies Legislation
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