Excess line broker licenses are available to New York residents licensed as brokers in New York and also to nonresidents from reciprocal states who 1) are licensed as excess or surplus lines brokers in their home states and 2) have or will obtain New York-nonresident broker licenses. New York treats all states as reciprocal for these purposes except Florida and Montana. All Montana- and Florida-resident surplus line licensees will be issued only a limited excess line license by New York according to the current New York nonresident excess line broker application form and the Department of Financial Services. A limited license allows that licensee to produce only purchasing group business under the federal Risk Retention Act. In addition, California surplus lines brokers can obtain full nonresident excess line licenses but are required to provide a $50,000 bond to the Department of Financial Services.
GENERAL LICENSING INFORMATION
Excess line licenses are issued pursuant to Insurance Law §2105. Broker licenses are issued pursuant to §2104.
All licenses issued to entities (corporation, LLCs and partnerships) expire on a common date. Insurance Law §2103 and §2104 were amended in 2018 to change the expiration dates of licenses issued to business entities under these sections from October 31 of even-numbered years to June 30 of odd-numbered years. Accordingly, Property and Casualty Broker (BR), Excess Line Broker (EX) and Life and Accident/Health and Variable Life/Variable Annuity Broker (LB) entities that renewed their licenses on November 1, 2020, (based on the prior October 31 of even-numbered years expiration date), were issued licenses with an expiration date of June 30, 2023.
All licenses issued to individuals expire on the individual’s birthday. Licenses will expire in even-numbered years for those born in even-numbered years and in odd-numbered years for those born in odd-numbered years. Licenses are issued for a two-year term.
For entity licensees, one or more individuals must become sublicensees of the entity that employs the sublicensee. For a sole proprietorship, where the licensee receives the commissions on placements and holds the premium trust account in their own name, being licensed exclusively as an individual is appropriate. An OGC Opinion of October 2, 2002, stated that a nonmember manager of an LLC may be a sublicensee of the LLC licensee provided that the nonmember meets all requirements to be a sublicensee for the type of license involved. For more on LLC licensing as a broker, see the OGC Opinion of May 13, 2002.
New York resident brokers must obtain 15 CE credits per licensing cycle to renew their broker licenses. Nonresident licensees must meet their home state requirements for CE.
License Applications: The Department of Financial Services maintains an online renewal application system. Initial applications for entity licensure can be obtained via the Department’s portal, and initial applications for individual licensure may be obtained here. Both may also be obtained by contacting the Department’s Insurance Licensing Unit at (518) 474-6600 or by email. Nonresident individual licensees may also apply for a nonresident excess line broker’s license via the National Insurance Producer Registry.
New York requires each separate office location from which a broker/excess line broker operates to have at least one licensee or sublicensee work out of that office and supervise its staff (see Insurance Law §2129 and Regulation 125 as well as the OGC Opinions of August 18, 2004, and August 10, 2001).
All excess line brokers must file a year-end tax report by March 15 of the following year even if the licensee placed no excess line insurance in that year. Penalties apply to those that fail to file. ELANY provides reports in early March to each licensee who placed excess line business in the immediately preceding year. The reports assist licensees in preparing the excess line tax return, provided the excess line broker filed transactions timely and accurately with ELANY.
ENTITY VERSUS INDIVIDUAL LICENSES
If a broker operates as a corporation, LLC or partnership in New York, the entity must be licensed with one or more individuals acting as sublicensee(s). The entity must maintain the premium trust account and receive commissions in the entity name. An unlicensed entity that operates as a broker in New York cannot rely on the license of an individual principal or employee of the firm. Doing so is a violation of New York law.
It is certainly legal for an individual to maintain a sole proprietorship with an individual license while maintaining the premium trust account and receiving commissions in the name of the individual or sole proprietorship. The problem that ELANY most often observes is when the premium trust account is maintained and commissions are received in an unlicensed entity’s name with only an individual license held by a principal or employee.
An entity that fails to obtain an entity license and instead attempts to operate under a principal or employee’s individual license has violated the law because it is illegal for an unlicensed entity or person to receive commissions. The licensee must hold the premiums received in a premium trust account in its name and under its control.
A licensed entity that maintains the premium trust account in the entity name and receives commission in that name should file the policy with ELANY under the entity license. The policy should not be filed under a principal or employee’s individual license.
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ELANY DISCLAIMER:
This is not intended to be nor should it be construed as legal advice. Consult with your own legal counsel.
Last Revised 04/29/2025