State RegulationsNY specificDifficulty 1/5
Under New York law, what is required before a corporation or limited liability company may act as an insurance agent for an insurer in this state?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §2101(p) and §2103(j)(2), a business entity such as a corporation or LLC may be licensed as an insurance agent or broker, and the entity itself must hold a license issued by the Superintendent before transacting insurance business. In practice, DFS can examine and discipline the entity separately from its individual producers, so unlicensed entity operation exposes both the firm and its insurers to penalties.
Why the other options are wrong
- A) Individual officers being licensed does not replace the entity's own license - New York requires both the business entity and the natural persons who transact insurance to be licensed.
- B) An appointment is a separate arrangement authorizing a licensee to represent an insurer; it does not substitute for the entity's own agent license from the Superintendent.
- D) County clerk registration has no effect under the Insurance Law; authority to transact insurance comes only from a license issued by the Superintendent.
Memory hook
No entity license, no entity business - DFS licenses the firm AND its producers.