senate Bill S6505

Amended

Relates to what constitutes doing an insurance business in the state

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Sponsor

Bill Status


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

  • 31 / Jan / 2014
    • REFERRED TO INSURANCE
  • 25 / Feb / 2014
    • AMEND AND RECOMMIT TO INSURANCE
  • 25 / Feb / 2014
    • PRINT NUMBER 6505A
  • 10 / Mar / 2014
    • 1ST REPORT CAL.240
  • 11 / Mar / 2014
    • 2ND REPORT CAL.
  • 12 / Mar / 2014
    • ADVANCED TO THIRD READING
  • 12 / May / 2014
    • PASSED SENATE
  • 12 / May / 2014
    • DELIVERED TO ASSEMBLY
  • 12 / May / 2014
    • REFERRED TO INSURANCE
  • 30 / May / 2014
    • RECALLED FROM ASSEMBLY
  • 30 / May / 2014
    • RETURNED TO SENATE
  • 02 / Jun / 2014
    • VOTE RECONSIDERED - RESTORED TO THIRD READING
  • 02 / Jun / 2014
    • AMENDED ON THIRD READING 6505B
  • 11 / Jun / 2014
    • SUBSTITUTED BY A9175A

Summary

Relates to what constitutes doing an insurance business in the state.

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Bill Details

Versions:
S6505
S6505A
S6505B
Legislative Cycle:
2013-2014
Law Section:
Insurance Law
Laws Affected:
Amd §1101, Ins L

Sponsor Memo

BILL NUMBER:S6505

TITLE OF BILL: An act to amend the insurance law, in relation to inter-
net enrollment of employees

PURPOSE: This bill would amend § 1101(b) of the insurance law to facili-
tate internet enrollment of an employee who is a resident of this state
and who is applying to be covered under a group life, health or annuity
contract that has been issued to an out-of-state employer by an insurer
that is otherwise not authorized to transact business in this state.

SUMMARY OF PROVISIONS: This bill would amend § 1101(b) of the insurance
law by making a conforming amendment to paragraph (1) and adding a new
paragraph (8) which establishes the circumstances under which an insurer
otherwise not authorized to do business in this state may facilitate
internet enrollment by a resident employee of this state for a group
life or accident and health insurance policy or a group annuity
contract.

JUSTIFICATION: Section 1101 of the insurance law defines what consti-
tutes "doing an insurance business" in New York state. Current
subsection (b)(2)-(7) of this section describe the circumstances under
which certain transactions are considered exempt from the section and
would not be considered "doing an insurance business" in this state.

This legislation seeks to add a new subsection (b)(8) to such section to
provide that an unauthorized insurer will not be "doing an insurance
business" in the state, if they offer an option for internet enrollment
by New York residents who are employed by an out of state employer under
a group life or group accident and health insurance policy or a group
annuity contract that is being issued by such unauthorized insurer. The
legislation also requires: 1) that the group insurance contract being
issued to the New York resident by the unauthorized insurer must comply
with certain provisions of the New York insurance law relating to group
insurance coverage; 2) that the insurer has lawfully issued the policy
or contract in a jurisdiction where the insurer is authorized to do an
insurance business; 3) that the insurer's website clearly states that
the insurer is not authorized to transact the business of insurance in
this state; and 4) that the insurer does not have any other contact with
the employee, other than as specified in § 1101(b)(2) of the insurance
law.

Section 1101(b)(2) of the current law already allows/facilitates enroll-
ment by mail (snail or e-mail) of New York-based employees of out-of-
state employers covered under certain group insurance contracts issued
by unauthorized insurers. The new paragraph (8) established pursuant to
this bill will similarly allow internet enrollment under such circum-
stances, using largely the same standards as that which currently
applies pursuant to the mail exception of subsection (b)(2).

Enactment of this bill will make it easier for New York-based employees
to enroll under the group insurance contracts offered by their out-of-

state employer when such contracts are offered by an unauthorized insur-
er. This internet enrollment option will only be made available if the
appropriate group insurance standards in the current New York insurance
law apply, similarly to what is currently required when New York employ-
ees are enrolled under these circumstances via mail.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.

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

                                  6505

                            I N  S E N A T E

                            January 31, 2014
                               ___________

Introduced  by  Sen.  SEWARD -- 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 internet enrollment of
  employees

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

  Section  1.  The opening paragraph and subparagraph (D) of paragraph 1
of subsection (b) of section 1101 of  the  insurance  law,  the  opening
paragraph as amended by section 1 of part I of chapter 61 of the laws of
2011, are amended to read as follows:
  Except  as  OTHERWISE  provided  in [paragraph two, three, three-a, or
seven of] this subsection, any of the  following  acts  in  this  state,
effected  by  mail  from outside this state or otherwise, by any person,
firm, association, corporation or joint-stock company  shall  constitute
doing  an  insurance  business  in this state and shall constitute doing
business in the state within the meaning of section three hundred two of
the civil practice law and rules:
  (D) doing any kind of  business,  including  a  reinsurance  business,
specifically  recognized as constituting the doing of an insurance busi-
ness within the meaning of this chapter; OR
  S 2. Subsection (b) of section 1101 of the insurance law is amended by
adding a new paragraph 8 to read as follows:
  (8) NOTWITHSTANDING  THE  FOREGOING,  THE  MAINTENANCE  OF  A  WEBSITE
OUTSIDE  THE  STATE  BY  AN  UNAUTHORIZED  FOREIGN OR ALIEN INSURER DULY
LICENSED TO TRANSACT THE BUSINESS OF INSURANCE IN AND BY THE LAWS OF ITS
DOMICILE, BY WHICH A MEMBER OF A GROUP MAY SELF-ENROLL, THROUGH AN AUTO-
MATED PROCESS, IN A GROUP LIFE, GROUP ANNUITY,  OR  GROUP  ACCIDENT  AND
HEALTH  INSURANCE POLICY OR CONTRACT, AS DEFINED IN PARAGRAPHS ONE, TWO,
AND THREE OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED THIRTEEN
OF THIS ARTICLE, SHALL NOT CONSTITUTE DOING  AN  INSURANCE  BUSINESS  IN
THIS  STATE, BUT SECTION ONE THOUSAND ONE HUNDRED THIRTEEN OF THIS ARTI-
CLE NEVERTHELESS SHALL APPLY TO THE INSURER; PROVIDED THAT:
  (A) THE GROUP CONFORMS TO THE DEFINITION OF ELIGIBILITY CONTAINED IN:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13607-01-4

S. 6505                             2

  (I) PARAGRAPH ONE, TWO, FOUR (WITH RESPECT TO A  POLICY  ISSUED  TO  A
TRUSTEE  OR  TRUSTEES OF A FUND ESTABLISHED OR PARTICIPATED IN BY TWO OR
MORE EMPLOYERS, ONE OR MORE LABOR UNIONS, OR BY ONE OR MORE EMPLOYERS OR
LABOR UNIONS, PROVIDED THAT ALL SUCH EMPLOYERS OR LABOR  UNIONS  ARE  IN
THE  SAME  INDUSTRY), OR FIVE OF SUBSECTION (B) OF SECTION FOUR THOUSAND
TWO HUNDRED SIXTEEN OF THIS CHAPTER;
  (II) SUBPARAGRAPH (A), (B), (C), OR (D)  (WITH  RESPECT  TO  A  POLICY
ISSUED TO A TRUSTEE OR TRUSTEES OF A FUND ESTABLISHED OR PARTICIPATED IN
BY  TWO  OR  MORE EMPLOYERS, ONE OR MORE LABOR UNIONS, OR BY ONE OR MORE
EMPLOYERS OR LABOR UNIONS, PROVIDED THAT ALL  SUCH  EMPLOYERS  OR  LABOR
UNIONS  ARE  IN THE SAME INDUSTRY) OF PARAGRAPH ONE OF SUBSECTION (C) OF
SECTION FOUR THOUSAND TWO HUNDRED THIRTY-FIVE OF THIS CHAPTER; OR
  (III) PARAGRAPHS ONE, TWO, THREE, FOUR OR ELEVEN OF SUBSECTION (B)  OF
SECTION  FOUR THOUSAND TWO HUNDRED THIRTY-EIGHT OF THIS CHAPTER, BUT NOT
INCLUDING A GROUP ANNUITY CONTRACT: (I)  FUNDING  INDIVIDUAL  RETIREMENT
ACCOUNTS  OR INDIVIDUAL RETIREMENT ANNUITIES, AS DEFINED IN SECTION FOUR
HUNDRED EIGHT OF THE INTERNAL REVENUE CODE; (II)  FUNDING  ANNUITIES  IN
ACCORDANCE  WITH  SUBDIVISION  (B) OF SECTION FOUR HUNDRED THREE OF SUCH
CODE; OR (III) PROVIDING A PLAN OF RETIREMENT ANNUITIES UNDER WHICH  THE
PAYMENTS  ARE  DERIVED  WHOLLY  FROM  FUNDS  CONTRIBUTED  BY THE PERSONS
COVERED.
  (B) THE INSURER LAWFULLY ISSUED THE MASTER POLICY OR CONTRACT  WITHOUT
THIS  STATE  IN A JURISDICTION WHERE THE INSURER WAS AUTHORIZED TO DO AN
INSURANCE BUSINESS;
  (C) THE INSURER'S WEBSITE CLEARLY  STATES  THAT  THE  INSURER  IS  NOT
AUTHORIZED TO TRANSACT THE BUSINESS OF INSURANCE IN THIS STATE; AND
  (D)  THE  INSURER  DOES NOT HAVE ANY OTHER CONTACT OR INTERACTION WITH
THE MEMBER OTHER THAN AS SPECIFIED AND IN THE MANNER PROVIDED  IN  PARA-
GRAPH TWO OF THIS SUBSECTION.
  S 3. This act shall take effect immediately.

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