Bill Text: NY A01051 | 2015-2016 | General Assembly | Introduced
Bill Title: Allows third party notification by insurance carriers in regard to long term care policies; further prohibits the inclusion of certain goods/services in the sale of insurance policies without consent and provides penalty for a violation of this prohibition.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced - Dead) 2016-01-06 - referred to insurance [A01051 Detail]
Download: New_York-2015-A01051-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
1051
2015-2016 Regular Sessions
I N A S S E M B L Y
January 8, 2015
___________
Introduced by M. of A. CAHILL -- Multi-Sponsored by -- M. of A. CLARK,
ENGLEBRIGHT, GOTTFRIED, HOOPER, PERRY -- read once and referred to the
Committee on Insurance
AN ACT to amend the insurance law, in relation to third party notifica-
tion by insurance carriers in certain instances in regard to long term
care policies; prohibiting the inclusion of certain goods and services
in the sale of certain insurance policies without the insured's
informed consent, and providing a specific penalty for violation of
such prohibition
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Subsection (f) of section 3111 of the insurance law, as
2 relettered by section 30 of part B of chapter 58 of the laws of 2004, is
3 relettered subsection (g) and a new subsection (f) is added to read as
4 follows:
5 (F) EVERY INSURER THAT HAS IN FORCE A LONG-TERM CARE INSURANCE POLICY
6 AS DEFINED IN SECTION ONE THOUSAND ONE HUNDRED SEVENTEEN OF THIS CHAPTER
7 THE PREMIUMS FOR WHICH ARE PAID DIRECTLY TO THE INSURER BY THE SENIOR
8 CITIZEN INSURED SHALL PERMIT THE INSURED TO DESIGNATE A PARTY TO WHOM
9 THE INSURER SHALL TRANSMIT NOTICES OF NONPAYMENT OF PREMIUMS DUE OR
10 NOTICE OF CANCELLATION FOR NONPAYMENT OF PREMIUMS, AS DETERMINED BY THE
11 INSURER. THE SENIOR CITIZEN SHALL NOTIFY THE INSURER THAT A THIRD PARTY
12 HAS BEEN SO DESIGNATED. SUCH NOTIFICATION SHALL BE DELIVERED TO THE
13 INSURER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND SHALL BE EFFEC-
14 TIVE NOT LATER THAN TEN BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE
15 INSURER. THE NOTIFICATION MUST CONTAIN, IN WRITING, AN ACCEPTANCE BY THE
16 THIRD PARTY DESIGNEE TO RECEIVE SUCH NOTICES OF CANCELLATION. SHOULD THE
17 THIRD PARTY DESIGNEE DESIRE TO TERMINATE HIS OR HER STATUS AS A THIRD
18 PARTY DESIGNEE, SUCH DESIGNEE SHALL PROVIDE WRITTEN NOTICE TO BOTH THE
19 INSURER AND THE SENIOR CITIZEN INSURED. SHOULD THE SENIOR CITIZEN
20 INSURED DESIRE TO TERMINATE THE THIRD PARTY DESIGNATION, THE INSURED
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03228-01-5
A. 1051 2
1 SHALL PROVIDE WRITTEN NOTICE TO THE INSURER. THE TRANSMISSION TO THE
2 THIRD PARTY DESIGNEE OF ANY SUCH NOTICE OF CANCELLATION SHALL BE IN
3 ADDITION TO A COPY OF SUCH DOCUMENT TRANSMITTED TO THE SENIOR CITIZEN
4 INSURED AND WHEN A THIRD PARTY IS SO DESIGNATED ALL SUCH NOTICES SHALL
5 BE MAILED IN AN ENVELOPE CLEARLY MARKED ON ITS FACE WITH THE FOLLOWING:
6 "IMPORTANT INSURANCE POLICY INFORMATION: OPEN IMMEDIATELY". DESIGNATION
7 AS A THIRD PARTY SHALL NOT CONSTITUTE ACCEPTANCE OF ANY LIABILITY ON THE
8 THIRD PARTY FOR SERVICES PROVIDED TO SUCH SENIOR CITIZEN. THE INSURER
9 SHALL NOTIFY ITS INSURED SENIOR CITIZEN ANNUALLY IN WRITING OF THE
10 AVAILABILITY OF THE THIRD PARTY DESIGNEE NOTICE PROCEDURE AND PROVIDE
11 INFORMATION ON HOW THE INSURED CAN COMMENCE THIS PROCEDURE; HOWEVER,
12 SUCH NOTICE NEED NOT BE PROVIDED ONCE A SENIOR CITIZEN HAS MADE A DESIG-
13 NATION.
14 S 2. Subsection (a) of section 2324 of the insurance law, as amended
15 by chapter 291 of the laws of 2012, is amended to read as follows:
16 (a) (1) No authorized insurer, no licensed insurance agent, no
17 licensed insurance broker, and no employee or other representative of
18 any such insurer, agent or broker shall make, procure or negotiate any
19 contract of insurance other than as plainly expressed in the policy or
20 other written contract issued or to be issued as evidence thereof, or
21 shall directly or indirectly, by giving or sharing a commission or in
22 any manner whatsoever, pay or allow or offer to pay or allow to the
23 insured or to any employee of the insured, either as an inducement to
24 the making of insurance or after insurance has been effected, any rebate
25 from the premium which is specified in the policy, or any special favor
26 or advantage in the dividends or other benefit to accrue thereon, or
27 shall give or offer to give any valuable consideration or inducement of
28 any kind, directly or indirectly, which is not specified in such policy
29 or contract, other than any valuable consideration, including but not
30 limited to merchandise or periodical subscriptions, not exceeding twen-
31 ty-five dollars in value, or shall give, sell or purchase, or offer to
32 give, sell or purchase, as an inducement to the making of such insurance
33 or in connection therewith, any stock, bond or other securities or any
34 dividends or profits accrued thereon, nor shall the insured, his OR HER
35 agent or representative knowingly receive directly or indirectly, any
36 such rebate or special favor or advantage, provided, however, a licensed
37 insurance agent or a licensed insurance broker may retain the usual
38 commission or underwriting fee on insurance placed on his OR HER own
39 property or risks, if the aggregate of such commissions or underwriting
40 fees will not exceed five percent of the total net commissions or under-
41 writing fees received by such licensed insurance agent or insurance
42 broker during the calendar year.
43 (2) NO AUTHORIZED INSURER, NO LICENSED INSURANCE AGENT, NO LICENSED
44 INSURANCE BROKER, AND NO EMPLOYEE OR OTHER REPRESENTATIVE OF ANY SUCH
45 INSURER, AGENT OR BROKER SHALL INCLUDE WITH THE SALE OF AN INSURANCE
46 POLICY ANY OTHER INSURANCE POLICY OR PRODUCT OR OTHER GOODS AND SERVICES
47 WITHOUT FIRST OBTAINING THE INFORMED CONSENT OF THE PROPOSED INSURED.
48 S 3. Subsection (f) of section 2324 of the insurance law is amended to
49 read as follows:
50 (f) (1) Any person or corporation violating the provisions of this
51 section shall, in addition to all other penalties provided by law, pay
52 to the people of this state as a penalty the sum of five hundred dollars
53 for each such violation.
54 (2) ANY PERSON OR CORPORATION VIOLATING THE PROVISIONS OF PARAGRAPH
55 TWO OF SUBSECTION (A) OF THIS SECTION SHALL, IN ADDITION TO ALL OTHER
A. 1051 3
1 PENALTIES PROVIDED BY LAW, PAY A FINE IN THE SUM OF ONE THOUSAND DOLLARS
2 FOR EACH SUCH VIOLATION.
3 S 4. Subsection (c) of section 4224 of the insurance law, as amended
4 by chapter 496 of the laws of 2013, is amended to read as follows:
5 (c) (1) Except as permitted by section three thousand two hundred
6 thirty-nine of this chapter or subsection (f) of this section, no such
7 life insurance company and no such savings and insurance bank and no
8 officer, agent, solicitor or representative thereof and no such insurer
9 doing in this state the business of accident and health insurance and no
10 officer, agent, solicitor or representative thereof, and no licensed
11 insurance broker and no employee or other representative of any such
12 insurer, agent or broker, shall pay, allow or give, or offer to pay,
13 allow or give, directly or indirectly, as an inducement to any person to
14 insure, or shall give, sell or purchase, or offer to give, sell or
15 purchase, as such inducement, or interdependent with any policy of life
16 insurance or annuity contract or policy of accident and health insur-
17 ance, any stocks, bonds, or other securities, or any dividends or
18 profits accruing or to accrue thereon, or any valuable consideration or
19 inducement whatever not specified in such policy or contract other than
20 any valuable consideration, including but not limited to merchandise or
21 periodical subscriptions, not exceeding twenty-five dollars in value;
22 nor shall any person in this state knowingly receive as such inducement,
23 any rebate of premium or policy fee or any special favor or advantage in
24 the dividends or other benefits to accrue on any such policy or
25 contract, or knowingly receive any paid employment or contract for
26 services of any kind, or any valuable consideration or inducement what-
27 ever which is not specified in such policy or contract.
28 (2) NO SUCH LIFE INSURANCE COMPANY AND NO SUCH SAVINGS AND INSURANCE
29 BANK AND NO SUCH INSURER DOING IN THIS STATE THE BUSINESS OF ACCIDENT
30 AND HEALTH INSURANCE AND NO OFFICER, AGENT, SOLICITOR OR REPRESENTATIVE
31 THEREOF AND NO LICENSED INSURANCE BROKER AND NO EMPLOYEE OR OTHER REPRE-
32 SENTATIVE OF ANY SUCH INSURER, AGENT OR BROKER SHALL INCLUDE WITH THE
33 SALE OF AN INSURANCE POLICY ANY OTHER INSURANCE POLICY OR PRODUCT OR
34 OTHER GOODS AND SERVICES WITHOUT FIRST OBTAINING THE INFORMED CONSENT OF
35 THE PROPOSED INSURED.
36 S 5. Section 4224 of the insurance law is amended by adding a new
37 subsection (g) to read as follows:
38 (G) ANY PERSON OR CORPORATION VIOLATING THE PROVISIONS OF PARAGRAPH
39 TWO OF SUBSECTION (C) OF THIS SECTION SHALL IN ADDITION TO ALL OTHER
40 PENALTIES PROVIDED BY LAW PAY A FINE IN THE SUM OF ONE THOUSAND DOLLARS
41 FOR EACH SUCH VIOLATION.
42 S 6. This act shall take effect immediately, except that section one
43 of this act shall take effect on the first of January next succeeding
44 the date on which it shall have become a law and shall apply to policies
45 issued or renewed on or after such date.
