FAQ’S

The insurance industry is policed by a number of different state and federal agencies.  These include, but are not necessarily limited to:  the Department of Insurance, the Department of State, the Department of Taxation, the Department of Banking as well as the Department of Financial Services, or their state named equivalent.  There is also federal agency oversight of some insurance related activities as is the case with regard to variable annuity products by the SEC.   Given the breadth of government agency oversight, maintaining compliance across the entire regulatory spectrum requires  consideration of a myriad of different laws as they may be applicable to each individual’s or entity’s specific insurance operations.

~Gary T. Harker, Esq., LL.M.

The position of insurance compliance manager necessitates understanding the applicable regulatory footprint of their organization’s business operations while continuously monitoring for new regulatory developments that may impact their organization, and assessing risks associated therewith.  They are also responsible for developing and executing policies, procedures, and internal controls to keep risk at levels acceptable to senior management with the aim of mitigating exposure to regulatory censure.

~Gary T. Harker, Esq., LL.M.

Compliance with insurance laws and state and federal agency regulations is critical because failure to adhere to the applicable requirements defined therein could result in criminal sanctions (in the most serious cases) as well as loss of charter, license, registration or eligibility to transact insurance and/or significant fines.  Additional repercussions would, in most cases, include increased administrative burden where an individual or entity has a multi-state footprint or intends to expand current footprint, and potentially damage an individual or entity’s reputation.

~Gary T. Harker, Esq., LL.M.

Yes, even if it happened 20 years ago.   As part of a state’s license due diligence process, states do take into account a licensee’s character and fitness to be licensed, and so prior felonies and misdemeanor’s may have a bearing on whether a state ultimately grants an insurance license. Disclosure typically requires submission of a copy of the court record, disposition documentation and a personal explanation relating to the felony and/or misdemeanor.

~Gary T. Harker, Esq., LL.M.

As a general rule, yes.  This is because part of the remit of the state agency overseeing the insurance market is to safeguard those seeking insurance coverage from unscrupulous individuals who would take advantage of their position.  Performing background checks into those serving in a position of authority at an entity licensee or having control over the licensee enables insurance regulators to eliminate prior to the issuance of an insurance license anyone it deems inappropriate, due to prior bad acts, from serving in a position of authority that may seek to take advantage of the unsuspecting insurance consumer.

~Gary T. Harker, Esq., LL.M.

Most states require DBA’s to be approved prior to use by an insurance licensee.  Accordingly, in most states DBA’s may not be used if they have not been approved by the state agency regulating insurance and additionally properly registered in accordance with state registration requirements, such as those enumerated under the state business corporation law or limited liability company law.

~ Darrell Belch, Esq., Vice President of Corporate Compliance

The answer to this question requires consideration of a multitude of different factors but in my experience the answer is most frequently no, a non resident insurance business entity does not need to be qualified to do business with the Department of State and Tax Department in every state it is conducting business if it is  licensed in every state nationally.  Laws speaking to whether a business entity operating in the insurance space needs a Certificate of Authority to do business with the Department of State and needs to register for income tax return and remittance purposes are promulgated under various state statutes.  These include some or all, depending upon the state, the following:  state Insurance Statutes as well as the Business Corporation and Limited Liability Company laws, state Employment laws and state Tax laws.  Other considerations as to whether a Certificate of Authority to do business should be obtained necessarily include such considerations as Intellectual Property as well as other legal considerations.  Needless to say, there is no single right answer for all insurance entities.  Each business entity should seek out guidance from appropriately qualified legal experts for a bespoke guidance.  To not do so, could cost your agency thousands and in some cases tens of thousands of dollars each year in administrative, professional, third party registered agent and state filing fees.  Should you have any questions about your agency, brokerage, producer agency, Adjuster firm, Reinsurance Intermediary, TPA, Premium Finance Company, MGU, MGA or other insurance business entity’s current footprint, or are contemplating forming any one of the foregoing, please don’t hesitate to reach out to our legal compliance experts for a free consultation.

~Gary T. Harker, Esq., LL.M.

The answer to this question requires consideration of a multitude of different factors but in my experience the answer is most frequently no, a non resident insurance business entity does not need to be qualified to do business with the Department of State and Tax Department in every state it is conducting business if it is  licensed in every state nationally.  Laws speaking to whether a business entity operating in the insurance space needs a Certificate of Authority to do business with the Department of State and needs to register for income tax return and remittance purposes are promulgated under various state statutes.  These include some or all, depending upon the state, the following:  state Insurance Statutes as well as the Business Corporation and Limited Liability Company laws, state Employment laws and state Tax laws.  Other considerations as to whether a Certificate of Authority to do business should be obtained necessarily include such considerations as Intellectual Property as well as other legal considerations.  Needless to say, there is no single right answer for all insurance entities.  Each business entity should seek out guidance from appropriately qualified legal experts for a bespoke guidance.  To not do so, could cost your agency thousands and in some cases tens of thousands of dollars each year in administrative, professional, third party registered agent and state filing fees each year.  Should you have any questions about your agency, brokerage, producer agency, Adjuster firm, Reinsurance Intermediary, TPA, Premium Finance Company, MGU, MGA or other insurance business entity’s current footprint, or are contemplating forming any one of the foregoing, please don’t hesitate to reach out to our legal compliance experts for a free consultation.

~Gary T. Harker, Esq., LL.M.

The 3 main reasons for insurance regulation are to: create and maintain a framework for the attainment of an orderly insurance marketplace by balancing the needs of consumers and carriers and regulating the conduct of all market participants; protect consumers; generate revenue for the state through the collection of application processing fees, premium taxes, and regulatory fines.

~Gary T. Harker, Esq., LL.M.

Corporate services are a range of activities that draw upon specialized knowledge and best practices to serve the needs of businesses. Examples of Corporate Services include:

• Examining and providing strategic guidance on the legal, tax, finance, market, and risks factors involved to start or make changes to a business.
• Serving as the Registered Agent for a business to receive legal filings and summonses in each state and provide them to the company on a timely basis.
• Providing Compliance Services to ensure that an organization maintains all appropriate licenses, submits state and federal filings on a timely basis, and adheres to all relevant regulatory policies that are applicable to a business’ geographic, operational and financial nexus.
• Providing Company Formation, Company Withdrawal and Company Dissolution services.
• Preparing and filing Doing Business As (DBA) documents.
• Responding to State Administrative Action inquiries.
• And more

~Gary T. Harker, Esq., LL.M.

A Corporate Kit is a binder that houses important governing documents of a corporation or limited liability company, frequently known by its acronym LLC. The contents of a Corporate Kit are state-specific, so it’s important to know the unique requirements of the business’ state of incorporation or formation.  Typically, a Corporate Kit includes corporate bylaws, shareholders agreement or operating agreement, in the case of an LLC, annual and special shareholder and director or member and manager meeting minutes, corporate resolutions, stock or membership certificates, stock or membership transfer records, and a corporate seal. While it isn’t mandatory, from a state law perspective, to have an attorney create the Corporate Kit documents the provisions within such documents do need to conform with state laws and are central to the manner in which the business is to operate. It is therefore best practice to engage an attorney to prepare the organizational or formation documents. Relying on non-tailored generic documents is not advisable because, while inexpensive to obtain, doing so could lead to issues in the event of internal disputes such as between shareholders or members and to the extent not adhered to result in the loss of limited legal liability such that the courts may pierce the corporate veil and hold individual shareholders and members liable for the acts and omissions of the business.   The Corporate Kit is often obtained, and governing documents therein created, as an element of a larger set of services and filings that are part of launching a new business.

~Gary T. Harker, Esq., LL.M.

A Corporate Seal is a tool used to make an impression on official documents, like contracts and forms, so that they can be certified as legitimate. This serves as proof that the document was agreed to or signed by a corporation or LLC. The Corporate Seal is often part of a Corporate Kit.

~Gary T. Harker, Esq., LL.M.

Yes! Our team has over 100 years of combined legal and compliance expertise. We have 100% confidence in the accuracy of the guidance and services we provide. If we make a mistake, we’ll pay for it – guaranteed!

~Gary T. Harker, Esq., LL.M.

3H Corporate Services was founded in 2003. At the time, 3H referred to the  founding members family surnames:  Harker, Hugill and Heller.   Today, the 3H name refers to  Health, History and Horses; the 3H’s Saratoga Springs, NY is known for which reflects the location of 3H’s principal office.

~Gary T. Harker, Esq., LL.M.

Outsourcing insurance license management is a great option for many insurance ’intermediary's, especially smaller firms (with fewer than X agents). Staying on top of constantly changing state regulations and making all the requisite filings on a timely basis requires significant time and expertise. Every agency is different, and their needs are unique to their geographic footprint, lines of business and other factors. Because we provide customized solutions and price our services to match the precise needs of each client it’s impossible to give a one-size-fits-all answer to the cost question. Based on the feedback from our clients, many of whom have been with us for 20 years, we know we deliver high value for the services we provide. Also, one has to consider that if the cost of compliance seems high, try paying for non-compliance or for a larger registration footprint than what is actually needed because the law firm or corporate service provider used is not an expert in the insurance arena! On a more serious note, we’d be delighted to speak to you about your needs and provide you with a proposal for helping you with our license and other filing needs. Just fill out the form here.

~Gary T. Harker, Esq., LL.M.