State RegulationsNY specificDifficulty 2/5
A licensed New York agency wants its new employees to begin soliciting accident and health coverage on the agency's insurer appointments. Which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §2103(j)(2), business entities may be licensed, but the entity license authorizes the business - not unlicensed individuals - to transact insurance. Every natural person who solicits or sells coverage must qualify for and hold an individual license, and business written by unlicensed staff can jeopardize the agency's own standing with DFS.
Why the other options are wrong
- A) The entity license covers the firm's corporate capacity only; it confers no personal authority on employees to solicit or sell.
- C) New York has no concept of one officer's license covering other staff; licensing is personal to each producer who transacts insurance.
- D) Reporting names to the Superintendent does not license them; an individual license requires meeting the statutory qualification requirements.
Memory hook
The firm is licensed, and so is every seller - one license never covers a person.