New York Excess Line Brokers Must Renew Licenses Online for 2014-2016
Oct 10, 2014
The Excess Line Association of New York (“ELANY”) issued Bulletin No. 2014-20 on October 10, 2014 as a reminder to excess line brokers that the New York State Department of Financial Services will not be mailing any renewal license applications for the 2014-2016 licensing period. Instead, brokers must apply online for license renewals at the following hyperlink: http://www.dfs.ny.gov/insurance/licrenewal.htm.
All current excess line broker business entity licenses (corporation, LLC or partnership) expire on October 31, 2014. To avoid delays in the processing of affidavits and excess line documentation after November 1, 2014, the ELANY suggests that brokers renew their licenses immediately.
For individuals born in even-numbered years, excess line broker licenses will expire during even-numbered years on the licensee’s birthday. Licenses of those born in odd-numbered years will expire in odd-numbered years.
In its Bulletin, the ELANY also cautioned that, if any individual excess line broker licensees are operating their own businesses as corporations, partnerships or LLCs, the incorporated entity must be the licensee.
It was also explained that individual excess line broker licenses must not be used to place business when an entity is selling, soliciting or negotiating insurance contracts, is paid commissions and holds premium trust funds in its name. The entity must be licensed in order to be in compliance with New York law.
If the incorporated entity that employs an individual broker fails to obtain a business entity license and instead operates under the individual excess line broker license, the individual has violated the law because it is illegal to pay commission to an unlicensed person or entity. Rather, the licensee must hold the premiums received in a premium trust account in its name and under its control.
Recently, the New York State Department of Financial Services fined an individually licensed excess line broker $1,000 for acting as an insurance producer in the name of an unlicensed corporation.
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