senate Bill S6960

Signed by Governor

Allows for the use of an affiliate company to meet certain obligations of an insurer

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Sponsor

Bill Status


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

  • 09 / Apr / 2014
    • REFERRED TO INSURANCE
  • 05 / May / 2014
    • 1ST REPORT CAL.493
  • 06 / May / 2014
    • 2ND REPORT CAL.
  • 07 / May / 2014
    • ADVANCED TO THIRD READING
  • 21 / May / 2014
    • PASSED SENATE
  • 21 / May / 2014
    • DELIVERED TO ASSEMBLY
  • 21 / May / 2014
    • REFERRED TO INSURANCE
  • 17 / Jun / 2014
    • SUBSTITUTED FOR A9208
  • 17 / Jun / 2014
    • ORDERED TO THIRD READING CAL.584
  • 17 / Jun / 2014
    • PASSED ASSEMBLY
  • 17 / Jun / 2014
    • RETURNED TO SENATE
  • 11 / Sep / 2014
    • DELIVERED TO GOVERNOR
  • 23 / Sep / 2014
    • SIGNED CHAP.388

Summary

Allows for the use of an affiliate company to meet certain obligations of an insurer, including issuing replacement coverage in the case of a class discontinuance of individual coverage and issuing individual conversion coverage.

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Bill Details

See Assembly Version of this Bill:
A9208
Versions:
S6960
Legislative Cycle:
2013-2014
Law Section:
Insurance Law
Laws Affected:
Amd ยงยง3216, 3221, 4304 & 4305, Ins L

Sponsor Memo

BILL NUMBER:S6960 REVISED MEMO 05/06/2014

TITLE OF BILL: An act to amend the insurance law, in relation to
allowing for the use of an affiliate company to meet certain
obligations of an insurer

PURPOSE:

The purpose of this bill is to grant authority to the Superintendent
of Financial Services to allow an insurer to use an affiliate company
to meet certain obligations of the insurer.

SUMMARY OF PROVISIONS:

This legislation would allow the Superintendent of the Department of
Financial Services to, upon consideration of the public interest,
approve requests made by health insurers to satisfy the requirements
that they issue replacement coverage in the case of a class
discontinuance of individual coverage and issue individual conversion
coverage through another entity within the insurer's holding company
system.

JUSTIFICATION:

This bill would provide health insurers with greater flexibility when
offering policies while still ensuring that consumers are able to
access quality, affordable coverage that meets their needs. Currently,
insurers that discontinue a class of coverage in the individual market
are required to offer policyholders replacement coverage; in addition,
insurers are required to offer individuals a conversion policy when
they are no longer able to access group coverage in certain
circumstances. In last year's budget, we allowed the Department of
Financial Services (DFS) to exempt Health Maintenance Organizations
(HMOs) from these requirements, provided that another insurer within a
HMO's holding company offers the same policy with the same consumer
protections. However, due to a technical glitch this language only
works one way; DFS cannot exempt an insurer from these requirements,
even if the insurer has a HMO in its holding company system. This bill
would make technical changes to the Insurance Law to address this. All
policies would still have to be in compliance with the Affordable Care
Act and all applicable New York State laws.

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
________________________________________________________________________

                                  6960

                            I N  S E N A T E

                              April 9, 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 allowing for  the  use
  of an affiliate company to meet certain obligations of an insurer

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

  Section 1. Subparagraph (A)  of  paragraph  5  of  subsection  (c)  of
section  3216 of the insurance law, as amended by section 46-b of part D
of chapter 56 of the laws of 2013, is amended to read as follows:
  (A) Any family policy providing hospital or surgical expense insurance
(but not including such insurance against accidental injury only)  shall
provide  that, in the event such insurance on any person, other than the
policyholder, is terminated because the person is no longer  within  the
definition  of  the  family  as  set forth in the policy but before such
person has attained the limiting age, if any,  for  coverage  of  adults
specified in the policy, such person shall be entitled to have issued to
that  person  by  the  insurer,  without  evidence of insurability, upon
application therefor and payment of the first premium, within sixty days
after such insurance shall have  terminated,  an  individual  conversion
policy  that  contains  the  benefits  described  in  paragraph  one  of
subsection (b) of section four thousand three  hundred  twenty-eight  of
this chapter. The insurer shall offer one policy at each level of cover-
age  as defined in section 1302(d) of the affordable care act, 42 U.S.C.
S 18022(d). The individual may choose any such  policy  offered  by  the
insurer.    PROVIDED,  HOWEVER, THE SUPERINTENDENT MAY, AFTER GIVING DUE
CONSIDERATION TO THE PUBLIC INTEREST,  APPROVE  A  REQUEST  MADE  BY  AN
INSURER FOR THE INSURER TO SATISFY THE REQUIREMENTS OF THIS SUBPARAGRAPH
THROUGH  THE  OFFERING OF POLICIES THAT COMPLY WITH THIS SUBPARAGRAPH BY
ANOTHER INSURER, CORPORATION OR HEALTH MAINTENANCE  ORGANIZATION  WITHIN
THE  INSURER'S  HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF
THIS CHAPTER. The conversion privilege afforded  herein  shall  also  be
available  upon  the divorce or annulment of the marriage of the policy-
holder to the former spouse of such policyholder.
  S 2. Paragraph 2 of subsection (g) of section 3216  of  the  insurance
law is amended by adding a new subparagraph (E) to read as follows:
  (E)  THE  SUPERINTENDENT  MAY,  AFTER  GIVING DUE CONSIDERATION TO THE
PUBLIC INTEREST, APPROVE A REQUEST MADE BY AN INSURER FOR THE INSURER TO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14588-01-4

S. 6960                             2

SATISFY THE REQUIREMENTS OF SUBPARAGRAPH (C) OF THIS  PARAGRAPH  THROUGH
THE OFFERING OF POLICIES AT EACH LEVEL OF COVERAGE AS DEFINED IN SECTION
1302(D)  OF  THE AFFORDABLE CARE ACT, 42 U.S.C. S 18022(D) THAT CONTAINS
THE  BENEFITS  DESCRIBED  IN  PARAGRAPH ONE OF SUBSECTION (B) OF SECTION
FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT  OF  THIS  CHAPTER  BY  ANOTHER
INSURER,  CORPORATION  OR  HEALTH  MAINTENANCE  ORGANIZATION  WITHIN THE
INSURER'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN  OF
THIS CHAPTER.
  S  3. Subsection (g) of section 3221 of the insurance law, as added by
section 49 of part D of chapter 56 of the laws of 2013,  is  amended  to
read as follows:
  (g) For conversion purposes, an insurer shall offer to the employee or
member  a policy at each level of coverage as defined in section 1302(d)
of the affordable care act, 42 U.S.C. S 18022(d) that contains the bene-
fits described in paragraph one of subsection (b) of section four  thou-
sand three hundred twenty-eight of this chapter.  PROVIDED, HOWEVER, THE
SUPERINTENDENT  MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTER-
EST, APPROVE A REQUEST MADE BY AN INSURER FOR THE INSURER TO SATISFY THE
REQUIREMENTS OF THIS SUBSECTION AND SUBSECTIONS  (E)  AND  (F)  OF  THIS
SECTION   THROUGH  THE  OFFERING  OF  POLICIES  THAT  COMPLY  WITH  THIS
SUBSECTION BY ANOTHER INSURER, CORPORATION OR HEALTH MAINTENANCE  ORGAN-
IZATION WITHIN THE INSURER'S HOLDING COMPANY SYSTEM, AS DEFINED IN ARTI-
CLE FIFTEEN OF THIS CHAPTER.
  S  4. Item (i) of subparagraph (C) of paragraph 2 of subsection (c) of
section 4304 of the insurance law, as amended by section 43-a of part  D
of chapter 56 of the laws of 2013, is amended to read as follows:
  (i)  Discontinuance  of  a  class  of contract upon not less than five
months' prior written notice. In exercising the  option  to  discontinue
coverage pursuant to this item, the corporation must act uniformly with-
out  regard  to any health status-related factor of enrolled individuals
or individuals who may become eligible for such coverage and must  offer
to  subscribers  or  group  remitting agents, as may be appropriate, the
option to  purchase  all  other  individual  health  insurance  coverage
currently being offered by the corporation to applicants in that market.
PROVIDED,  HOWEVER,  THE  SUPERINTENDENT MAY, AFTER GIVING DUE CONSIDER-
ATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE  BY  A  CORPORATION
FOR THE CORPORATION TO SATISFY THE REQUIREMENTS OF THIS ITEM THROUGH THE
OFFERING  OF  CONTRACTS  AT EACH LEVEL OF COVERAGE AS DEFINED IN SECTION
1302(D) OF THE AFFORDABLE CARE ACT, 42 U.S.C. S 18022(D)  THAT  CONTAINS
THE  BENEFITS  DESCRIBED  IN  PARAGRAPH ONE OF SUBSECTION (B) OF SECTION
FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT  OF  THIS  CHAPTER  BY  ANOTHER
CORPORATION,  INSURER  OR  HEALTH  MAINTENANCE  ORGANIZATION  WITHIN THE
CORPORATION'S SAME HOLDING COMPANY SYSTEM, AS DEFINED IN ARTICLE FIFTEEN
OF THIS CHAPTER.
  S 5. Paragraph 1 of subsection (e) of section 4304  of  the  insurance
law,  as  amended  by  section 51 of part D of chapter 56 of the laws of
2013, is amended to read as follows:
  (1) If  any  such  contract  is  terminated  in  accordance  with  the
provisions  of  paragraph  one of subsection (c) of this section, or any
such contract is terminated because of a default by the remitting  agent
in  the  payment  of  premiums not cured within the grace period and the
remitting agent has not replaced the contract with similar  and  contin-
uous coverage for the same group whether insured or self-insured, or any
such contract is terminated in accordance with the provisions of subpar-
agraph  (E) of paragraph two of subsection (c) of this section, or if an
individual other than the contract holder is no longer covered  under  a

S. 6960                             3

"family  contract"  because the individual is no longer within the defi-
nition set forth in the contract, or a spouse is no longer covered under
the contract because of divorce from the contract holder or annulment of
the marriage, or any such contract is terminated because of the death of
the contract holder, then such individual, former spouse, or in the case
of the death of the contract holder the surviving spouse or other depen-
dents of the deceased contract holder covered under the contract, as the
case  may  be, shall be entitled to convert, without evidence of insura-
bility, upon application therefor and the making of  the  first  payment
thereunder  within  sixty  days  after  the  date of termination of such
contract, to a contract that contains the benefits  described  in  para-
graph one of subsection (b) of section four thousand three hundred twen-
ty-eight  of  this  chapter. The corporation shall offer one contract at
each level of coverage as defined in section 1302(d) of  the  affordable
care  act,  42  U.S.C.  S  18022(d).  The individual may choose any such
contract offered by the corporation.  PROVIDED, HOWEVER, THE SUPERINTEN-
DENT MAY, AFTER GIVING DUE CONSIDERATION TO THE PUBLIC INTEREST, APPROVE
A REQUEST MADE BY A CORPORATION  FOR  THE  CORPORATION  TO  SATISFY  THE
REQUIREMENTS  OF  THIS  PARAGRAPH THROUGH THE OFFERING OF CONTRACTS THAT
COMPLY WITH THIS PARAGRAPH BY ANOTHER  CORPORATION,  INSURER  OR  HEALTH
MAINTENANCE  ORGANIZATION  WITHIN THE CORPORATION'S SAME HOLDING COMPANY
SYSTEM, AS DEFINED IN ARTICLE FIFTEEN OF  THIS  CHAPTER.  The  effective
date  of  the coverage provided by the converted direct payment contract
shall be the date of the termination of coverage under the contract from
which conversion was made.
  S 6. Subparagraph (A) of paragraph 1 of subsection (d) of section 4305
of the insurance law, as amended by section 52 of part D of  chapter  56
of the laws of 2013, is amended to read as follows:
  (A)  A  group contract issued pursuant to this section shall contain a
provision to the effect that in case of a termination of coverage  under
such  contract of any member of the group because of (i) termination for
any reason whatsoever of the member's employment or membership, or  (ii)
termination  for  any  reason  whatsoever  of  the group contract itself
unless the group contract holder has replaced the  group  contract  with
similar  and  continuous  coverage for the same group whether insured or
self-insured, the member shall be entitled to have issued to the  member
by  the  corporation, without evidence of insurability, upon application
therefor and payment of the first premium made to the corporation within
sixty days after termination  of  the  coverage,  an  individual  direct
payment  contract, covering such member and the member's eligible depen-
dents who were covered by the group contract,  which  provides  coverage
that  contains the benefits described in paragraph one of subsection (b)
of section four thousand three hundred twenty-eight of this chapter. The
corporation shall offer one  contract  at  each  level  of  coverage  as
defined  in  section  1302(d)  of  the  affordable care act, 42 U.S.C. S
18022(d). The member may choose any such contract offered by the  corpo-
ration.    PROVIDED,  HOWEVER,  THE SUPERINTENDENT MAY, AFTER GIVING DUE
CONSIDERATION TO THE PUBLIC INTEREST, APPROVE A REQUEST MADE BY A CORPO-
RATION FOR THE CORPORATION TO SATISFY THE REQUIREMENTS OF THIS  SUBPARA-
GRAPH  THROUGH  THE OFFERING OF CONTRACTS THAT COMPLY WITH THIS SUBPARA-
GRAPH BY ANOTHER CORPORATION, INSURER OR HEALTH MAINTENANCE ORGANIZATION
WITHIN THE CORPORATION'S SAME HOLDING  COMPANY  SYSTEM,  AS  DEFINED  IN
ARTICLE FIFTEEN OF THIS CHAPTER.
  S 7. This act shall take effect immediately.

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