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Hello I will be assisting you.
These are excellent questions. Let me review New York Insurance law.
(a)(1) "Insurance contract" means any agreement or other transaction whereby one party, the "insurer", is obligated to confer benefit of pecuniary value upon another party, the "insured" or "beneficiary", dependent upon the happening of a fortuitous event in which the insured or beneficiary has, or is expected to have at the time of such happening, a material interest which will be adversely affected by the happening of such event. (2) "Fortuitous event" means any occurrence or failure to occur which is, or is assumed by the parties to be, to a substantial extent beyond the control of either party.
You have indicated that you will be reviewing certain information and then rendering an opinion. You then provide a guarantee to your client that if your review was not accurate that you will bear the consequences.
according to section (a)(2) since the review you are providing is within your control then it would be your contention that you do not meet the statutory qualification of a Fortuitous Event and therefor the contract you will have with your customers is not an insurance contract
Do you then a provider of a contract of warranty?
in accordance with an opinion published by the State of NY Insurance Dept (which can be found here: http://www.dfs.ny.gov/insurance/ogco2000/rg008091.htm) N.Y. Ins. Law 1101(b)(1)(B) provides that the making, or proposing to make, as warrantor, guarantor or surety, any contract of warranty, guaranty or suretyship as a vocation and not as merely incidental to any other legitimate business or activity of the warrantor, guarantor or surety, constitutes doing an insurance business.
In addition, where warranty coverage is provided without separate or additional consideration (beyond the price of the product/service), it may be a warranty. Where the warranty coverage is sold for separate or additional consideration, it is a service contract and the obligor must be registered as a service contract provider.
It seems that your main business is to investigate/verify credit card orders conducted over the internet and give an online store an opinion if the credit card number is XXXXX or not. The warranty part is incidental to the main work therefore you can claim that the warranty is merely incidental to your other legitimate business of verifying cc numbers.
based on the above analysis you could claim that you are not an insurance company rather you are in the business of analyzing CC numbers and you merely warranty your analysis.'
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