New York’s “Must Accept Cash” Law Doesn’t Apply to Insurance Agencies
New York has a new law that requires retail stores to accept cash payments from customers. It does not appear to apply to insurance agencies and brokerages.
The New York State Senate and Assembly approved the bill last May, and Gov. Kathy Hochul signed it into law in November. It took effect on March 21. Several Big I New York members have inquired as to whether it requires them to accept cash payments. The law’s text indicates that it does not.
- It defines “consumer commodity” as “any article, good, merchandise, product or commodity of any kind or class produced, distributed or offered for retail sale for consumption by individuals, or for personal, household or family purposes.” It does not mention services.
- It defines “retail establishment” as “an establishment wherein consumer commodities are sold, displayed or offered for sale, or where services are provided to consumers at retail.” It goes on to say that “This definition does not include banks or trust companies as such terms are defined in section two of the banking law.” This definition does not appear to describe an insurance agency.
- It prohibits a retail establishment from refusing to accept cash from consumers.
Since insurance agencies do not appear to fit within the definition of “retail establishment,” we do not believe the prohibition applies to an insurance agency.
Versions of this bill have been introduced in the legislature every year since 2019. During that time, no concerns have been raised from the industry about its applicability to carriers or producers. There does not appear to have been any effort to explicitly exclude them from the bill. It mirrors a 2020 New York City ordinance. If that ordinance has been enforced against an insurance agency, we have not heard about it.
Based on this, we believe that insurance agencies retain the option to reject cash payments in most circumstances. However, the New York State Department of Financial Services did publish an advisory legal opinion on December 29, 2009, stating:
“However, an insurance producer should fully explain to an insured or potential insured any refusal to accept cash payments, preferably in writing. Of course, an insurer may impose its own contractual requirements on insurance producers that do business with the insurer and insist that the insurance producer accept cash. …
There may be circumstances where an insurance producer’s refusal to accept a cash premium payment may result in cancellation, non-renewal or non-issuance of the insurance policy. Accordingly, an insurance producer should not refuse a cash payment if the insured may be adversely impacted by imminent cancellation, non-renewal or non-issuance of the policy.”
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