By: Akanksha A. Panicker
The New York Department of Financial Services oversees and controls financial services and goods, including aspects relevant to New York insurance and banking laws. The Department has five different divisions: [A.] the Insurance Division, [B.] the Department of Banking, [C.] the Financial Fraud Division, [D.] the Real Estates Division, and the [E.] Capital Markets Division.
The insurance division comprises numerous bureaus regarding life, health, and property. The FFCPD was established by the Financial Services Law and sought to safeguard and inform customers of financial goods and services. It also aims to combat financial fraud. The FFCPD enacts civil and criminal investigations of actions that may constitute breaches of the Financial Services Law, Banking Law, Insurance Law, or other rules and brings compliance proceedings where applicable.
The Department also has an Office of General Counsel, which is the legal arm of the Department. It develops laws, rules, and circular letters, provide legal recommendations, and renders Department staff legal guidance.
[1.0] HOW TO SERVE PROCESS ON THE SUPERINTENDENT
Typically, the process’s service consists of the documents used to initiate a litigation suit (e.g., a warrant, notice of petition, order to show cause). The defendant receives written notice to appear or respond in court. The process should not require subpoenas, appeals, or other pleadings unrelated to the pendant suit’s claims included in the pleadings.
Service can be successful given that one has complied with all legislative and regulatory specifications for service commencement.
Two copies of the documents comprising the process must be delivered in person to the Superintendent’s office with a cheque for USD 2. This cheque is made payable and addressed to the ‘Superintendent of Financial Services of New York.’ The New York Superintendent of Financial Services is an appointed state executive position in the New York state government. The superintendent is key in administering the Department of Financial Services, which oversees and regulates insurance companies, banks, and other financial institutions in the state.
If there are additional papers in a case that inherently do not commence the proceeding against the bank, they should be served directly on the bank or its counsel thereafter.
Foreign banks that the Superintendent licenses to operate a branch, agency or representative office in New York have appointed the Superintendent to accept service in any action or proceeding against them on causes of action arising out of transactions with their New York Offices.
[1.1] HOW TO SERVE AN OUT OF STATE CORPORATION
To perform non-testamentary trust transactions in New York, a must-out-state trust corporation without a physical location in the state shall comply with the submission of records with the Department of Financial Services. It must be understood that a duly qualified out-of-state trust company can only act as a Trustee and exercise trust powers in New York State upon the filing of the relevant documents with the Superintendent.
On legislative criteria for a bank’s organization, Article XV of the Banking Law acts as the source. Incorporators need to provide information in a ‘Certificate of Merit’ enforcing an application. It is the applicant’s responsibility to offer full and correct documentation and provide information supporting the application. It might be important to evaluate the applicant during the application evaluation period, and additional information may be required.
Pending the outcome of a formal application, a succinct document detailing the proposed business strategy is necessary. The summary should provide the reason for the proposed organization, the category of consumers it represents, the identities and jobs of the incorporators, the name and background of the Chief Executive Officer, and the proposed capitalization. Additional details regarding financial forecasts can be provided as well.
Upon reviewing the schedule, a representative of the Department of Financial Resources may contact the person to arrange a suitable period to discuss the plan’s specifics.
Upon service of process, it is key to remember that whether operating under New York Charter or Federal Charter, US banks headquartered in New York State have not appointed the Superintendent their agent for service of process, requiring these institutions to be served directly.
[1.2] REQUIREMENTS OF PROOF
Proof of service may be obtained by affidavit of compliance filed with the process within thirty days after such service. The affidavit must be filed with the clerk of the court.
If a copy of the process is mailed, it is necessary to file with the affidavit of compliance either the return receipt signed by such foreign banking corporation or the other official proof of delivery: the original envelope with a notation by the postal authorities. This latter is used in non-service instances as proof that acceptance was refused. If acceptance was refused, a copy of the notice and process together with notice of the mailing by registered mail and refusal to accept should be promptly sent to such foreign banking corporation at the same address by ordinary mail, and the affidavit of compliance shall so state.
Service of process is usually complete ten days after such papers are filed with the court’s clerk. The refusal to accept the registered mail delivery or to sign the return receipt shall not affect the service’s validity. Such foreign banking corporation refusing to accept such registered mail shall be charged with knowledge of its contents.
[2.0] SERVICE under THE INSURANCE LAW
The sound legal process can be performed upon the Superintendent on the behest of an insurance corporation or fraternal benefit society approved in New York, or risk retention party registered in New York, in respect of a contract delivered or released for delivery, or in consideration of an action occurring in New York. Service of process upon an insurer in any proceeding in any court of competent jurisdiction may be made by serving the superintendent, and deputy superintendent, or any salaried employee of the department whom the superintendent designates for such purpose, all of whom shall have authority to accept such service under any such power of attorney.
The service of process upon a domestic fraternal benefit society shall only be made by serving the superintendent, and deputy superintendent, any salaried employee of the department whom the superintendent designates for such purpose, or by serving the process at the home office of such society. The service of process upon any foreign or alien fraternal benefit society can be deemed to have been made within the territorial jurisdiction of any court in this state if shall be made only by serving the superintendent, and deputy superintendent, or any salaried employee of the department whom the superintendent designates for such purpose. The legal process may be executed on behalf of an unauthorized or unlicensed corporation by the Superintendent.
If the superintendent forwards a copy of the process by registered or certified mail to the defendant at its last known principal place of business, as designated by the issuer of such process and keeps a record of the process so served upon them, the service is deemed sufficient. The only caveat is that the notice of such service and a copy of the process are sent within ten days thereafter by or on behalf of the plaintiff to the defendant at its last known principal place of business by registered or certified mail with return receipt requested.
Documents and processes can be served upon the Superintendent on the part of a certified buying group or a licensed life settlement provider.
The Department of Financial Resources does not recognize service of process under the Insurance Law of action against insurance groups or fleets, the Motor Vehicle Collision Indemnity Company, the State Insurance Agency, insurance dealers and vendors, insurance adjusters, and health maintenance associations.
[2.1] SERVICE FEES
If the action is being brought against a licensed insurance company or fraternal benefit society, one copy of the papers and a USD 40 cheque or money order is mandatory. This cheque must be addressed or made payable to the ‘Superintendent of Financial Services.’
However, an action against an unlicensed insurance company would require two copies of the papers with the name and last known address of the principal place of business of the insurance company being served. These specifications would also require a USD 40 cheque or money order made payable to the ‘Superintendent of Financial Services.’ A similar process is required for an action against a licensed life settlement provider. Two copies of the papers and a USD 40 cheque or money order must be made payable to the ‘Superintendent of Financial Services.’
If the action is being brought against a registered risk retention group or a registered purchasing group, two copies of the papers and a USD 20 cheque or money order should be made payable to the ‘Superintendent of Financial Services.’
[2.2] SERVICE FEES FOR MORE THAN ONE DEFENDANT-COMPANY
The Department of Insurance will approve one cheque or money order for insurance plans for several entities. However, if payment is rendered by a single cheque or money order and the papers are improper as to any one of the parties being handled (for example, if the name of the insurance firm is incorrect), any of the papers sought to serve will be returned, showing the service of process will not have been effected upon any of the entities. The introduction of a written plan, as well as a corporate strategy, must be included.
After this analysis, an official from the Department of Financial Services will inform the individual about arranging a mutually agreeable time to discuss the plan’s details. The overview should include the justification for the organization’s formation and organization, the Chief Executive Officer’s name and job, and the amount of money that the institution is planning to earn. Additional references to the numbers from the projection will be used.
Appropriate service on the Department of Financial Services is imperative. The Department’s mission is to foster the financial industry’s growth in New York and spur state economic development through judicious regulation and vigilant supervision. To ensure the continued solvency and protect users of financial products and services from financially impaired or insolvent providers of such services, the service of process must be fast and accurate. The service of documents is a key portion to elevating standards of honesty and transparency. It can be a cornerstone in eliminating financial fraud and other criminal abuses and unethical conduct in the industry.
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1. The current General Counsel is Richard Weber since May 1, 2020.
2. One State Street, New York, NY 10004
3. New York State Department of Financial Services, Office of General Counsel, One State Street, New York, NY 10004, or to One Commerce Plaza, Albany, NY 12257
4. The current officeholder is Linda Lacewell
5. Articles 1 and 2 of the Financial Services Law chapter of the New York Laws. Justia, ‘NY Fin Serv L § 102 (2019),’
FIS Articles 1 & 2:
[T]he purpose of this chapter is to consolidate the department of insurance and banking, and provide for the enforcement of the insurance, banking, and financial services laws, under the auspices of a single state agency to be known as the ‘department of financial services’ … The head of the department shall be the superintendent of financial services.
6. Duties of the office include but are not limited to
- Encouraging, promoting, and assisting financial services institutions in operating, remaining, and expanding in the state;
- Providing for the effective enforcement of banking and insurance laws;
- Ensuring the safety and soundness of the state’s financial services industries;
- Protecting the public interest and the interests of shareholders; and
- Promoting the reduction and elimination of fraud, abuse, and unethical conduct regarding financial services institutions and their customers.
7. Section 131.3 of the New York Banking Law
8. Article 15, General Provisions Applicable to Banking Stock Corporations, Limited Liability Investment Companies, and Limited Liability Trust Companies, Banking (BNK)
9. Addressed to New York State Department of Financial Services, Office of General Counsel, One Commerce Plaza, Albany, NY 12257
10. New York Consolidated Laws, Insurance Law – ISC § 5904. Risk-retention groups not chartered in this state
A risk retention group not chartered and licensed as a property/casualty insurer in this state, seeking to do business or doing business as a risk retention group in this state, shall comply with the laws of this state, as follows:
(a) Notice of operations and designation of the superintendent as an agent. Before offering insurance in this state, such risk retention group shall submit to the superintendent:
(1) a statement identifying the state or states in which the risk retention group is chartered and licensed as an insurance company to write liability insurance, the dates of chartering and licensing, and its principal place of business;
(2) a copy of its plan of operation or feasibility study and all revisions of such plan or study submitted to its chartering and licensing state; provided, however, that the provision relating to the submission of a plan of operation or feasibility study shall not apply concerning any kind or classification of liability insurance which was:
(A) defined in the federal Product Liability Risk Retention Act of 1981 1 before October twenty-seventh, nineteen hundred eighty-six; and
(B) offered before such date by any risk retention group which had been chartered and was operating for not less than three years before such date; and
(3) a statement of registration, for which a filing fee shall be imposed by a regulation to be promulgated by the superintendent, which statement of registration shall include a power of attorney designating the superintendent as its agent to receive service of process in any proceeding against it on a contract delivered or issued for delivery, or on a cause of action arising, in this state.
(A) … (B) Service of process upon a risk retention group under this paragraph shall be made by serving the superintendent, and deputy superintendent, or any salaried employee of the department whom the superintendent designates for such purpose with two copies thereof and the payment of a fee of twenty dollars. The superintendent shall forward a copy of such process by registered or certified mail to the risk retention group at the address given in its written certificate of designation and shall keep a record of all such process served. Service of the process so made shall be deemed made within any court’s territorial jurisdiction in this state.
11. as stated in Section 1213
12. Service may be made by mailing or delivering the papers to the Department as follows:
- By mail: addressed to New York State Department of Financial Services, Corporate Affairs Unit, One Commerce Plaza – 20th Floor, Albany, New York 12257.
- In-person: at New York State Department of Financial Services, Office of General Counsel, One State Street, New York, NY 10004, or One Commerce Plaza, Albany, NY 12257.