The New York State Department of Financial Services has a stern warning for out-of-state group annuity issuers: Don’t try to sell pension risk transfer arrangements in New York without getting licensed in New York state.
Out-of-state insurers should not even try to sell group annuities to customers located outside of New York state from offices in New York state.
Kevin Bishop, the department’s acting general counsel, gave that message today, in a circular letter sent to all life insurers and insurance producers doing business in New York.
The letter has the title, “Re: Soliciting, Negotiating, Selling, and Servicing Group Annuity Contracts Issued by Unauthorized Insurers.”
In the text, Bishop says the department has heard that “one or more unauthorized life insurers have been soliciting, negotiating, selling, and servicing group annuity terminal funding or close-out contracts from their New York offices through in-person meetings, telephone calls, mail, emails, and other communications.”
Engaging in those activities as an unauthorized insurer violates state law, Bishop.
New York state law also prohibits unauthorized insurers from collecting or receiving any premiums or other fees in New York, Bishop says.
State law imposes a penalty of $1,000 for the first violation of the law and $2,500 for each subsequent violation on any insurer doing an insurance business in New York state without a license, Bishop says.