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February 24, 2009 at 07:00 PM
New York regulators have blocked producers from mentioning guaranty fund protection in ads and also blocked insurers from insuring couples’ retirement arrangements against marital discord.
The New York State Insurance Department general counsel’s office addresses the guaranty fund issue in Office of the General Counsel Opinion Number 09-01-12.
A member of the public asked the office, “May a life insurance agent or broker, in soliciting structured settlement annuities, lawfully use a brochure published by a trade association that states that ‘state insurance guaranty associations provide an additional level of protection for future structured settlement recipients’?”
A producer cannot use a brochure that refers to the Life Insurance Guaranty Corp. of New York, officials write in the opinion.
New York state insurance law “broadly prohibits any person from using the existence of the LIGCNY for the purpose of selling, soliciting, or inducing the purchase of annuity contracts,” officials write.
An insurer can respond directly to a policyholder upon written request and on a form prepared by the corporation and approved by the state insurance superintendent, officials write.
A copy of the guaranty fund reference opinion is available here.
