S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    595
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  M. of A. CAHILL -- Multi-Sponsored by -- M. of A. ENGLE-
   BRIGHT, GOTTFRIED, 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD01575-01-1

 A. 595                              2
 
 INSURED  DESIRE  TO  TERMINATE  THE THIRD PARTY DESIGNATION, THE INSURED
 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. 595                              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.