senate Bill S6505B

Relates to what constitutes doing an insurance business in the state

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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

  • 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

See Assembly Version of this Bill:
A9175A
Versions:
S6505
S6505A
S6505B
Legislative Cycle:
2013-2014
Law Section:
Insurance Law
Laws Affected:
Amd §1101, Ins L

Sponsor Memo

BILL NUMBER:S6505B

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

PURPOSE:

This bill would amend § 1101(b) of the insurance law to facilitate
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 constitutes "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
enrollment 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 circumstances, 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 insurer. 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 employees 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--B
    Cal. No. 240

                            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  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee -- reported favorably from said committee, ordered
  to first and second report, ordered to  a  third  reading,  passed  by
  Senate  and  delivered  to  the Assembly, recalled, vote reconsidered,
  restored to third reading, amended and  ordered  reprinted,  retaining
  its place in the order of third reading

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,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13607-07-4

S. 6505--B                          2

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 TWO HUNDRED THIRTEEN OF THIS  CHAP-
TER NEVERTHELESS SHALL APPLY TO THE INSURER; PROVIDED THAT:
  (A) THE GROUP CONFORMS TO THE DEFINITION OF ELIGIBILITY CONTAINED IN:
  (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 OR FOUR OF SUBSECTION (B) OF SECTION
FOUR THOUSAND TWO HUNDRED THIRTY-EIGHT OF THIS CHAPTER, BUT NOT  INCLUD-
ING 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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