senate Bill S6812A

Relates to anti-rebating provisions for insurers

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 23 / Mar / 2012
    • REFERRED TO INSURANCE
  • 16 / May / 2012
    • AMEND AND RECOMMIT TO INSURANCE
  • 16 / May / 2012
    • PRINT NUMBER 6812A
  • 21 / May / 2012
    • 1ST REPORT CAL.841
  • 22 / May / 2012
    • 2ND REPORT CAL.
  • 23 / May / 2012
    • ADVANCED TO THIRD READING
  • 04 / Jun / 2012
    • SUBSTITUTED BY A9702A

Summary

Provides that an insurer may offer valuable consideration, including merchandise or periodical subscriptions of a value of $25 or less to an insured.

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Bill Details

See Assembly Version of this Bill:
A9702A
Versions:
S6812
S6812A
Legislative Cycle:
2011-2012
Law Section:
Insurance Law
Laws Affected:
Amd ยงยง2324 & 4224, Ins L

Votes

17
0
17
Aye
0
Nay
1
aye with reservations
0
absent
0
excused
0
abstained
show Insurance committee vote details

Sponsor Memo

BILL NUMBER:S6812A

TITLE OF BILL:
An act
to amend the insurance law, in relation to anti-rebating provisions for
insurers

PURPOSE:
The purpose of this bill is to permit property and casualty
companies, agents, and brokers to provide merchandise or other
considerations with a value not to exceed twenty five dollars during
the insurance sales process to an applicant for insurance. This bill
also removes a restriction that the merchandise be promotional in
nature.

SUMMARY OF PROVISIONS:
This bill amends subsection (a) of section 2324
of the insurance law as amended by chapter 482 of the laws of 2000,
and amends section 2324 of the insurance law by adding a new
subsection (g). This bill also amends subsection (c) of section 4224
of the insurance law as amended by chapter 592 of the laws of 2008.

JUSTIFICATION:
Sections 2324 and 4424 of the insurance law restrict
insurers and agents from providing anything of value to applicants
for insurance, beyond that which is provided for in the insurance
contract. These sections, referred to as the anti-rebating statutes,
were established to keep insurers and agents from offering valuable
items not related to the insurance contract as incentives for an
applicant to purchase a policy. Many years ago, the legislature
recognized the need for an exception to this section for items of
minimal value that insurers or agents might choose to offer to
potential customers during the sales process and amended the law to
provide for an exception for items with a value of fifteen dollars or
less. This bill would update that amount once again to reflect the
cost of inflation since 2000 and extend the exception to include the
life insurance sales process.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
None to State.

EFFECTIVE DATE:
This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 6812--A

                            I N  S E N A T E

                             March 23, 2012
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee  on  Insurance  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the  insurance  law,  in  relation  to anti-rebating
  provisions for insurers

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Subsection  (a)  of section 2324 of the insurance law, as
amended by chapter 482 of the laws  of  2000,  is  amended  to  read  as
follows:
  (a)  No  authorized  insurer, no licensed insurance agent, no licensed
insurance broker, and no employee or other representative  of  any  such
insurer,  agent  or broker shall make, procure or negotiate any contract
of insurance other than as plainly expressed  in  the  policy  or  other
written  contract  issued  or to be issued as evidence thereof, or shall
directly or indirectly, by giving or sharing  a  commission  or  in  any
manner  whatsoever, pay or allow or offer to pay or allow to the insured
or to any employee of the insured, either as an inducement to the making
of insurance or after insurance has been effected, any rebate  from  the
premium which is specified in the policy, or any special favor or advan-
tage  in the dividends or other benefit to accrue thereon, or shall give
or offer to give any valuable consideration or inducement of  any  kind,
directly  or  indirectly,  which  is  not  specified  in  such policy or
contract, other than any [article of] VALUABLE CONSIDERATION,  INCLUDING
BUT  NOT LIMITED TO merchandise OR PERIODICAL SUBSCRIPTIONS, not exceed-
ing [fifteen] TWENTY-FIVE dollars in value [which shall  have  conspicu-
ously stamped or printed thereon the advertisement of the insurer, agent
or  broker],  or shall give, sell or purchase, or offer to give, sell or
purchase, as an inducement  to  the  making  of  such  insurance  or  in
connection  therewith,  any stock, bond or other securities or any divi-
dends or profits accrued thereon, nor shall the insured,  his  agent  or
representative knowingly receive directly or indirectly, any such rebate
or  special  favor or advantage, provided, however, a licensed insurance

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15149-03-2

S. 6812--A                          2

agent or a licensed insurance broker may retain the usual commission  or
underwriting  fee  on  insurance placed on his own property or risks, if
the aggregate of such commissions or underwriting fees will  not  exceed
five  percent of the total net commissions or underwriting fees received
by such licensed insurance agent or insurance broker during the calendar
year.
  S 2.  Subsection (c) of section 4224 of the insurance law, as  amended
by chapter 592 of the laws of 2008, is amended to read as follows:
  (c)  Except as permitted by section three thousand two hundred thirty-
nine of this chapter, no such life insurance company and no such savings
and insurance bank and no officer, agent,  solicitor  or  representative
thereof and no such insurer doing in this state the business of accident
and  health insurance and no officer, agent, solicitor or representative
thereof, and no licensed insurance  broker  and  no  employee  or  other
representative of any such insurer, agent or broker, shall pay, allow or
give,  or  offer  to  pay,  allow or give, directly or indirectly, as an
inducement to any person to insure, or shall give, sell or purchase,  or
offer  to  give, sell or purchase, as such inducement, or interdependent
with any policy of life insurance or annuity contract or policy of acci-
dent and health insurance, any stocks, bonds, or  other  securities,  or
any  dividends or profits accruing or to accrue thereon, or any valuable
consideration or inducement whatever not specified  in  such  policy  or
contract OTHER THAN ANY VALUABLE CONSIDERATION, INCLUDING BUT NOT LIMIT-
ED TO MERCHANDISE OR PERIODICAL SUBSCRIPTIONS, NOT EXCEEDING TWENTY-FIVE
DOLLARS  IN  VALUE; nor shall any person in this state knowingly receive
as such inducement, any rebate of premium or policy fee or  any  special
favor  or  advantage in the dividends or other benefits to accrue on any
such policy or contract, or knowingly receive  any  paid  employment  or
contract  for  services  of  any  kind, or any valuable consideration or
inducement whatever which is not specified in such policy or contract.
  S 3. This act shall take effect immediately.

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