Bill Text: NY S06935 | 2011-2012 | 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 1-0)
Status: (Introduced - Dead) 2012-04-13 - REFERRED TO INSURANCE [S06935 Detail]
Download: New_York-2011-S06935-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
6935
I N S E N A T E
April 13, 2012
___________
Introduced by Sen. KENNEDY -- read twice and ordered printed, and when
printed to be committed 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
21 SHALL PROVIDE WRITTEN NOTICE TO THE INSURER. THE TRANSMISSION TO THE
22 THIRD PARTY DESIGNEE OF ANY SUCH NOTICE OF CANCELLATION SHALL BE IN
23 ADDITION TO A COPY OF SUCH DOCUMENT TRANSMITTED TO THE SENIOR CITIZEN
24 INSURED AND WHEN A THIRD PARTY IS SO DESIGNATED ALL SUCH NOTICES SHALL
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01037-01-1
S. 6935 2
1 BE MAILED IN AN ENVELOPE CLEARLY MARKED ON ITS FACE WITH THE FOLLOWING:
2 "IMPORTANT INSURANCE POLICY INFORMATION: OPEN IMMEDIATELY". DESIGNATION
3 AS A THIRD PARTY SHALL NOT CONSTITUTE ACCEPTANCE OF ANY LIABILITY ON THE
4 THIRD PARTY FOR SERVICES PROVIDED TO SUCH SENIOR CITIZEN. THE INSURER
5 SHALL NOTIFY ITS INSURED SENIOR CITIZEN ANNUALLY IN WRITING OF THE
6 AVAILABILITY OF THE THIRD PARTY DESIGNEE NOTICE PROCEDURE AND PROVIDE
7 INFORMATION ON HOW THE INSURED CAN COMMENCE THIS PROCEDURE; HOWEVER,
8 SUCH NOTICE NEED NOT BE PROVIDED ONCE A SENIOR CITIZEN HAS MADE A DESIG-
9 NATION.
10 S 2. Subsection (a) of section 2324 of the insurance law, as amended
11 by chapter 482 of the laws of 2000, is amended to read as follows:
12 (a) (1) No authorized insurer, no licensed insurance agent, no
13 licensed insurance broker, and no employee or other representative of
14 any such insurer, agent or broker shall make, procure or negotiate any
15 contract of insurance other than as plainly expressed in the policy or
16 other written contract issued or to be issued as evidence thereof, or
17 shall directly or indirectly, by giving or sharing a commission or in
18 any manner whatsoever, pay or allow or offer to pay or allow to the
19 insured or to any employee of the insured, either as an inducement to
20 the making of insurance or after insurance has been effected, any rebate
21 from the premium which is specified in the policy, or any special favor
22 or advantage in the dividends or other benefit to accrue thereon, or
23 shall give or offer to give any valuable consideration or inducement of
24 any kind, directly or indirectly, which is not specified in such policy
25 or contract, other than any article of merchandise not exceeding fifteen
26 dollars in value which shall have conspicuously stamped or printed ther-
27 eon the advertisement of the insurer, agent or broker, or shall give,
28 sell or purchase, or offer to give, sell or purchase, as an inducement
29 to the making of such insurance or in connection therewith, any stock,
30 bond or other securities or any dividends or profits accrued thereon,
31 nor shall the insured, his OR HER agent or representative knowingly
32 receive directly or indirectly, any such rebate or special favor or
33 advantage, provided, however, a licensed insurance agent or a licensed
34 insurance broker may retain the usual commission or underwriting fee on
35 insurance placed on his OR HER own property or risks, if the aggregate
36 of such commissions or underwriting fees will not exceed five percent of
37 the total net commissions or underwriting fees received by such licensed
38 insurance agent or insurance broker during the calendar year.
39 (2) NO AUTHORIZED INSURER, NO LICENSED INSURANCE AGENT, NO LICENSED
40 INSURANCE BROKER, AND NO EMPLOYEE OR OTHER REPRESENTATIVE OF ANY SUCH
41 INSURER, AGENT OR BROKER SHALL INCLUDE WITH THE SALE OF AN INSURANCE
42 POLICY ANY OTHER INSURANCE POLICY OR PRODUCT OR OTHER GOODS AND SERVICES
43 WITHOUT FIRST OBTAINING THE INFORMED CONSENT OF THE PROPOSED INSURED.
44 S 3. Subsection (f) of section 2324 of the insurance law is amended to
45 read as follows:
46 (f) (1) Any person or corporation violating the provisions of this
47 section shall, in addition to all other penalties provided by law, pay
48 to the people of this state as a penalty the sum of five hundred dollars
49 for each such violation.
50 (2) ANY PERSON OR CORPORATION VIOLATING THE PROVISIONS OF PARAGRAPH
51 TWO OF SUBSECTION (A) OF THIS SECTION SHALL, IN ADDITION TO ALL OTHER
52 PENALTIES PROVIDED BY LAW, PAY A FINE IN THE SUM OF ONE THOUSAND DOLLARS
53 FOR EACH SUCH VIOLATION.
54 S 4. Subsection (c) of section 4224 of the insurance law, as amended
55 by chapter 592 of the laws of 2008, is amended to read as follows:
S. 6935 3
1 (c) (1) Except as permitted by section three thousand two hundred
2 thirty-nine of this chapter, no such life insurance company and no such
3 savings and insurance bank and no officer, agent, solicitor or represen-
4 tative thereof and no such insurer doing in this state the business of
5 accident and health insurance and no officer, agent, solicitor or repre-
6 sentative thereof, and no licensed insurance broker and no employee or
7 other representative of any such insurer, agent or broker, shall pay,
8 allow or give, or offer to pay, allow or give, directly or indirectly,
9 as an inducement to any person to insure, or shall give, sell or
10 purchase, or offer to give, sell or purchase, as such inducement, or
11 interdependent with any policy of life insurance or annuity contract or
12 policy of accident and health insurance, any stocks, bonds, or other
13 securities, or any dividends or profits accruing or to accrue thereon,
14 or any valuable consideration or inducement whatever not specified in
15 such policy or contract; nor shall any person in this state knowingly
16 receive as such inducement, any rebate of premium or policy fee or any
17 special favor or advantage in the dividends or other benefits to accrue
18 on any such policy or contract, or knowingly receive any paid employment
19 or contract for services of any kind, or any valuable consideration or
20 inducement whatever which is not specified in such policy or contract.
21 (2) NO SUCH LIFE INSURANCE COMPANY AND NO SUCH SAVINGS AND INSURANCE
22 BANK AND NO SUCH INSURER DOING IN THIS STATE THE BUSINESS OF ACCIDENT
23 AND HEALTH INSURANCE AND NO OFFICER, AGENT, SOLICITOR OR REPRESENTATIVE
24 THEREOF AND NO LICENSED INSURANCE BROKER AND NO EMPLOYEE OR OTHER REPRE-
25 SENTATIVE OF ANY SUCH INSURER, AGENT OR BROKER SHALL INCLUDE WITH THE
26 SALE OF AN INSURANCE POLICY ANY OTHER INSURANCE POLICY OR PRODUCT OR
27 OTHER GOODS AND SERVICES WITHOUT FIRST OBTAINING THE INFORMED CONSENT OF
28 THE PROPOSED INSURED.
29 S 5. Section 4224 of the insurance law is amended by adding a new
30 subsection (f) to read as follows:
31 (F) ANY PERSON OR CORPORATION VIOLATING THE PROVISIONS OF PARAGRAPH
32 TWO OF SUBSECTION (C) OF THIS SECTION SHALL IN ADDITION TO ALL OTHER
33 PENALTIES PROVIDED BY LAW PAY A FINE IN THE SUM OF ONE THOUSAND DOLLARS
34 FOR EACH SUCH VIOLATION.
35 S 6. This act shall take effect immediately, except that section one
36 of this act shall take effect on the first of January next succeeding
37 the date on which it shall have become a law and shall apply to policies
38 issued or renewed on or after such date.
