S T A T E   O F   N E W   Y O R K
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                                   7478
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              April 26, 2017
                                ___________
 
 Introduced  by  M. of A. CAHILL -- Multi-Sponsored by -- M. of A. ENGLE-
   BRIGHT, GOTTFRIED, HOOPER, PERRY -- read  once  and  referred  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:
 
   Section  1.  Subsection  (f)  of section 3111 of the insurance law, as
 relettered by section 30 of part B of chapter 58 of the laws of 2004, is
 relettered subsection (g) and a new subsection (f) is added to  read  as
 follows:
   (F)  EVERY INSURER THAT HAS IN FORCE A LONG-TERM CARE INSURANCE POLICY
 AS DEFINED IN SECTION ONE THOUSAND ONE HUNDRED SEVENTEEN OF THIS CHAPTER
 THE PREMIUMS FOR WHICH ARE PAID DIRECTLY TO THE INSURER  BY  THE  SENIOR
 CITIZEN  INSURED  SHALL  PERMIT THE INSURED TO DESIGNATE A PARTY TO WHOM
 THE INSURER SHALL TRANSMIT NOTICES OF  NONPAYMENT  OF  PREMIUMS  DUE  OR
 NOTICE  OF CANCELLATION FOR NONPAYMENT OF PREMIUMS, AS DETERMINED BY THE
 INSURER. THE SENIOR CITIZEN SHALL NOTIFY THE INSURER THAT A THIRD  PARTY
 HAS  BEEN  SO  DESIGNATED.  SUCH  NOTIFICATION SHALL BE DELIVERED TO THE
 INSURER BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND SHALL BE EFFEC-
 TIVE NOT LATER THAN TEN BUSINESS DAYS FROM THE DATE OF  RECEIPT  BY  THE
 INSURER. THE NOTIFICATION MUST CONTAIN, IN WRITING, AN ACCEPTANCE BY THE
 THIRD PARTY DESIGNEE TO RECEIVE SUCH NOTICES OF CANCELLATION. SHOULD THE
 THIRD  PARTY  DESIGNEE  DESIRE TO TERMINATE HIS OR HER STATUS AS A THIRD
 PARTY DESIGNEE, SUCH DESIGNEE SHALL PROVIDE WRITTEN NOTICE TO  BOTH  THE
 INSURER  AND  THE  SENIOR  CITIZEN  INSURED.  SHOULD  THE SENIOR CITIZEN
 INSURED DESIRE TO TERMINATE THE THIRD  PARTY  DESIGNATION,  THE  INSURED
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD00671-01-7

 A. 7478                             2
 
 SHALL  PROVIDE  WRITTEN  NOTICE  TO THE INSURER. THE TRANSMISSION TO THE
 THIRD PARTY DESIGNEE OF ANY SUCH NOTICE  OF  CANCELLATION  SHALL  BE  IN
 ADDITION  TO  A  COPY OF SUCH DOCUMENT TRANSMITTED TO THE SENIOR CITIZEN
 INSURED  AND  WHEN A THIRD PARTY IS SO DESIGNATED ALL SUCH NOTICES SHALL
 BE MAILED IN AN ENVELOPE CLEARLY MARKED ON ITS FACE WITH THE  FOLLOWING:
 "IMPORTANT  INSURANCE POLICY INFORMATION: OPEN IMMEDIATELY". DESIGNATION
 AS A THIRD PARTY SHALL NOT CONSTITUTE ACCEPTANCE OF ANY LIABILITY ON THE
 THIRD PARTY FOR SERVICES PROVIDED TO SUCH SENIOR  CITIZEN.  THE  INSURER
 SHALL  NOTIFY  ITS  INSURED  SENIOR  CITIZEN  ANNUALLY IN WRITING OF THE
 AVAILABILITY OF THE THIRD PARTY DESIGNEE NOTICE  PROCEDURE  AND  PROVIDE
 INFORMATION  ON  HOW  THE  INSURED CAN COMMENCE THIS PROCEDURE; HOWEVER,
 SUCH NOTICE NEED NOT BE PROVIDED ONCE A SENIOR CITIZEN HAS MADE A DESIG-
 NATION.
   § 2. Subsection (a) of section 2324 of the insurance law,  as  amended
 by chapter 291 of the laws of 2012, is amended to read as follows:
   (a)  (1)  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 advantage 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 valuable consideration, including but not
 limited to merchandise or periodical subscriptions, not exceeding  twen-
 ty-five  dollars  in value, 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
 dividends  or profits accrued thereon, nor shall the insured, his OR HER
 agent or representative knowingly receive directly  or  indirectly,  any
 such rebate or special favor or advantage, provided, however, a licensed
 insurance  agent  or  a  licensed  insurance broker may retain the usual
 commission or underwriting fee on insurance placed on  his  OR  HER  own
 property  or risks, if the aggregate of such commissions or underwriting
 fees will not exceed five percent of the total net commissions or under-
 writing fees received by such  licensed  insurance  agent  or  insurance
 broker during the calendar year.
   (2)  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 INCLUDE WITH THE SALE OF AN INSURANCE
 POLICY ANY OTHER INSURANCE POLICY OR PRODUCT OR OTHER GOODS AND SERVICES
 WITHOUT FIRST OBTAINING THE INFORMED CONSENT OF THE PROPOSED INSURED.
   § 3. Subsection (f) of section 2324 of the insurance law is amended to
 read as follows:
   (f) (1) Any person or corporation violating  the  provisions  of  this
 section  shall,  in addition to all other penalties provided by law, pay
 to the people of this state as a penalty the sum of five hundred dollars
 for each such violation.
   (2) ANY PERSON OR CORPORATION VIOLATING THE  PROVISIONS  OF  PARAGRAPH
 TWO  OF  SUBSECTION  (A) OF THIS SECTION SHALL, IN ADDITION TO ALL OTHER

 A. 7478                             3
 
 PENALTIES PROVIDED BY LAW, PAY A FINE IN THE SUM OF ONE THOUSAND DOLLARS
 FOR EACH SUCH VIOLATION.
   §  4.  Subsection (c) of section 4224 of the insurance law, as amended
 by chapter 496 of the laws of 2013, is amended to read as follows:
   (c) (1) Except as permitted by  section  three  thousand  two  hundred
 thirty-nine  of  this chapter or subsection (f) of this section, 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 accident and health insur-
 ance, 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 limited 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 what-
 ever which is not specified in such policy or contract.
   (2) NO SUCH LIFE INSURANCE COMPANY AND NO SUCH SAVINGS  AND  INSURANCE
 BANK  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 REPRE-
 SENTATIVE  OF  ANY  SUCH INSURER, AGENT OR BROKER SHALL INCLUDE WITH THE
 SALE OF AN INSURANCE POLICY ANY OTHER INSURANCE  POLICY  OR  PRODUCT  OR
 OTHER GOODS AND SERVICES WITHOUT FIRST OBTAINING THE INFORMED CONSENT OF
 THE PROPOSED INSURED.
   §  5.  Section  4224  of  the insurance law is amended by adding a new
 subsection (g) to read as follows:
   (G) ANY PERSON OR CORPORATION VIOLATING THE  PROVISIONS  OF  PARAGRAPH
 TWO  OF  SUBSECTION  (C)  OF THIS SECTION SHALL IN ADDITION TO ALL OTHER
 PENALTIES PROVIDED BY LAW PAY A FINE IN THE SUM OF ONE THOUSAND  DOLLARS
 FOR EACH SUCH VIOLATION.
   §  6.  This act shall take effect immediately, except that section one
 of this act shall take effect on the first of  January  next  succeeding
 the date on which it shall have become a law and shall apply to policies
 issued or renewed on or after such date.