New York State Insurance Department officials have emphasized their opposition to the idea of agents and brokers even trying to explain what the Life Insurance Company Guaranty Corp. is.
States generally discourage references to insurance guaranty funds in marketing materials. New York has a law forbidding the making of a “statement which uses the existence of the corporation for the purpose of sales, solicitation or inducement to purchase any form of insurance covered,” officials in the New York department’s Office of General Counsel say in an opinion.
Someone asked the office:
1. Whether a licensed insurance agent or broker who solicits structured settlement annuities can speak or write about guaranty funds in general in connection with the solicitation of annuities to lawyers or their personal injury clients.
2. Whether a firm can discuss the guaranty fund in marketing materials if it also includes a disclaimer warning that the existence of guaranty funds is not a reason to buy insurance.
3. If there is an acceptable way for a licensed agent or broker to answer questions about guaranty funds.