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

                                11268--A

                          I N  A S S E M B L Y

                              May 25, 2010
                               ___________

Introduced by M. of A. CUSICK, MORELLE, MILLMAN -- Multi-Sponsored by --
  M.  of  A.    FIELDS,  KOON,  PHEFFER, REILLY, TITONE -- read once and
  referred to the Committee on Insurance -- committee  discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

AN ACT to amend the  insurance  law,  in  relation  to  sponsored  group
  personal excess insurance

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

  Section 1. Section 3445 of the insurance law, as added by chapter  528
of  the laws of 1998, is renumbered section 3453 and paragraphs 3, 6 and
7 of subsection (a) and subsections (c) and  (d)  of  such  section  are
amended to read as follows:
  (3)  "Employee"  means A DIRECTOR OF THE EMPLOYER, OR an individual or
partner who receives or has received income, wages or salaries from  the
employer.
  (6)  "Group  member"  means  a  designated  ACTIVE OR RETIRED employee
insured under this section AND ALSO MAY INCLUDE THE EMPLOYEE'S  DOMESTIC
PARTNER  OR  ANY  PERSON  RELATED  TO  THE  EMPLOYEE BY BLOOD, MARRIAGE,
ADOPTION, OR OPERATION  OF  LAW,  WHO  RESIDES  IN  THE  SAME  HOUSEHOLD
(INCLUDING  A  WARD OR FOSTER CHILD) OR WHO IS A DEPENDENT CHILD AWAY AT
SCHOOL.
  (7) "Group policy" means  employer  sponsored  group  personal  excess
insurance  written  for the designated employees of an employer OR OTHER
GROUP MEMBERS AS DEFINED IN THIS SECTION.
  (c) The premium for the group policy may be paid by the employer  from
funds contributed:
  (1) wholly by the employer;
  (2) wholly by the employees OR GROUP MEMBERS; or
  (3) jointly by the employer and employees OR GROUP MEMBERS.
  (d)  An employee OR GROUP MEMBER shall have the right to refuse cover-
age offered by an employer under this section.
  S 2. The insurance law is amended by adding a new section 3454 to read
as follows:

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

                                                           LBD17135-04-0

A. 11268--A                         2

  S 3454. SPONSORED GROUP PERSONAL INSURANCE. (A) FOR PURPOSES  OF  THIS
SECTION, THE FOLLOWING DEFINITIONS SHALL APPLY:
  (1)  "CERTIFICATE"  OR  "CERTIFICATE  OF  INSURANCE" MEANS ANY POLICY,
CONTRACT OR OTHER EVIDENCE OF INSURANCE, OR RIDER OR ENDORSEMENT  THERE-
TO, ISSUED TO A GROUP MEMBER UNDER A GROUP POLICY.
  (2)  "CONDITIONAL  RENEWAL" MEANS ANY CHANGE OF LIMITS, CHANGE IN TYPE
OF COVERAGE, REDUCTION OR ELIMINATION OF COVERAGE, INCREASED  DEDUCTIBLE
OR ADDITION OF EXCLUSION, OR INCREASED PREMIUMS IN EXCESS OF TEN PERCENT
(EXCLUSIVE  OF  ANY PREMIUM INCREASE GENERATED AS A RESULT OF EXPERIENCE
RATING, LOSS RATING OR RETROSPECTIVE RATING).
  (3) "PERSONAL EXCESS INSURANCE" MEANS INSURANCE AS  DEFINED  IN  PARA-
GRAPH THIRTEEN OR FOURTEEN OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE
HUNDRED THIRTEEN OF THIS CHAPTER, WRITTEN AS AN EXCESS INSURANCE POLICY.
  (4)  "PERSONAL  PROPERTY FLOATER INSURANCE" MEANS INSURANCE AS DEFINED
IN SUBPARAGRAPH (C) OF PARAGRAPH SEVEN OF SUBSECTION (A) OF SECTION  ONE
THOUSAND ONE HUNDRED THIRTEEN OF THIS CHAPTER.
  (5)  "GROUP  POLICY" MEANS A GROUP INSURANCE POLICY PROVIDING PERSONAL
EXCESS INSURANCE, PERSONAL PROPERTY FLOATER INSURANCE,  RENTERS'  INSUR-
ANCE,  AND VINTAGE VEHICLE INSURANCE, OR ANY COMBINATION THEREOF, INSUR-
ING SPONSOR GROUP MEMBERS.
  (6) "GROUP POLICYHOLDER" MEANS A SPONSOR.
  (7) "RENTERS' INSURANCE" MEANS INSURANCE INSURING RESIDENTIAL PROPERTY
TENANTS, HOUSING COOPERATIVE SHAREHOLDERS, OR CONDOMINIUM OWNERS AGAINST
THE CONTINGENCIES DESCRIBED IN SUBPARAGRAPHS (A), (B) AND  (C),  OR  (B)
AND  (C)  OF  PARAGRAPH  TWO OF SUBSECTION (A) OF SECTION THREE THOUSAND
FOUR HUNDRED TWENTY-FIVE OF THIS ARTICLE.
  (8) "VINTAGE VEHICLE INSURANCE" MEANS INSURANCE INSURING AGAINST LOSS-
ES OR LIABILITIES ARISING OUT OF THE OWNERSHIP, OPERATION, OR USE  OF  A
MOTOR VEHICLE, AND COVERING A MOTOR VEHICLE THAT IS ANTIQUE, CLASSIC, OR
MADE FROM A KIT. FOR THE PURPOSES OF THIS PARAGRAPH:
  (A) AN "ANTIQUE" MOTOR VEHICLE MEANS A PRIVATE PASSENGER MOTOR VEHICLE
THAT  IS AT LEAST TWENTY-FIVE YEARS OLD, AND IS MAINTAINED PRIMARILY FOR
USE IN EXHIBITIONS, CLUB ACTIVITIES,  PARADES,  OR  OTHER  FUNCTIONS  OF
PUBLIC INTEREST, AND OCCASIONALLY USED FOR OTHER PURPOSES; AND
  (B)  A  "CLASSIC"  MOTOR  VEHICLE IS A PRIVATE PASSENGER MOTOR VEHICLE
THAT IS AT LEAST TEN YEARS OLD, MAY BE USED ON A REGULAR BASIS, AND  THE
MOTOR  VEHICLE'S VALUE IS SIGNIFICANTLY HIGHER THAN THE AVERAGE VALUE OF
OTHER MOTOR VEHICLES OF THE SAME MAKE AND MODEL YEAR.
  (9) "SPONSOR" MEANS:
  (A) AN ASSOCIATION, ORGANIZATION, LABOR UNION, FEDERATION, FRATERNITY,
CLUB OR SIMILAR ENTITY:
  (I) IN WHICH THE MEMBERS ARE ENGAGED IN A  COMMON  PURSUIT  OR  ENTER-
PRISE;
  (II) THAT WAS FORMED FOR PURPOSES OTHER THAN OBTAINING INSURANCE;
  (III) THAT HAS BEEN IN EXISTENCE FOR MORE THAN THREE YEARS;
  (IV) THAT HAS TWENTY-FIVE OR MORE MEMBERS; AND
  (V) THAT HAS ADOPTED BY-LAWS OR SIMILAR GOVERNANCE RULES, AND A METHOD
TO ENROLL OR REGISTER MEMBERS; OR
  (B)  A  BANK, CORPORATION, PARTNERSHIP, TRUST COMPANY, OR TRUSTEE OF A
TRUST THAT OWNS TWENTY-FIVE OR MORE  RESIDENTIAL  PROPERTIES  OR  LIVING
UNITS  OR  A  TENANTS'  ASSOCIATION, CONDOMINIUM ASSOCIATION, OR SIMILAR
ORGANIZATION, WITH RESPECT TO RENTERS'  INSURANCE  SOLD  TO  LESSEES  OR
OCCUPANTS  OF  RESIDENTIAL PROPERTIES OR LIVING UNITS OWNED BY THE BANK,
CORPORATION, PARTNERSHIP OR TRUST, OR WHO ARE MEMBERS  OF  THE  TENANTS'
ASSOCIATION, CONDOMINIUM ASSOCIATION, OR SIMILAR ORGANIZATION.
  (10) "SPONSOR GROUP MEMBER" MEANS:

A. 11268--A                         3

  (A) AN ENROLLED MEMBER, OFFICER, OR DIRECTOR OF A SPONSOR;
  (B) ANY DOMESTIC PARTNER OF THE ENROLLED MEMBER, OFFICER, OR DIRECTOR;
  (C) ANY PERSON RELATED TO THE ENROLLED MEMBER, OFFICER, OR DIRECTOR BY
BLOOD,  MARRIAGE, ADOPTION, OR OPERATION OF LAW, WHO RESIDES IN THE SAME
HOUSEHOLD (INCLUDING A WARD OR FOSTER CHILD) OR WHO IS A DEPENDENT CHILD
AWAY AT SCHOOL; OR
  (D) A LESSEE OR OCCUPANT OF A  RESIDENTIAL  PROPERTY  OR  LIVING  UNIT
OWNED BY A BANK, CORPORATION, PARTNERSHIP OR TRUST WHEN THE BANK, CORPO-
RATION, PARTNERSHIP, TRUST COMPANY, OR TRUSTEE OF THE TRUST IS THE SPON-
SOR,  OR WHEN THE SPONSOR IS A TENANTS' ASSOCIATION, CONDOMINIUM ASSOCI-
ATION, OR SIMILAR ORGANIZATION.
  (B) A GROUP POLICY WRITTEN PURSUANT TO THIS SECTION MAY BE  ISSUED  OR
ISSUED FOR DELIVERY IN THIS STATE ONLY IN COMPLIANCE WITH THE PROVISIONS
OF THIS SECTION.
  (C) THE PREMIUM FOR THE GROUP POLICY, INCLUDING CERTIFICATES, SHALL BE
PAID BY THE SPONSOR GROUP MEMBERS. AN INSURER SHALL NOT PROVIDE COVERAGE
IN REGARD TO A GROUP POLICY THAT REQUIRES THE PURCHASE OF INSURANCE AS A
CONDITION  OF  SPONSOR  GROUP  MEMBERSHIP  OR IMPOSES ANY PENALTY UPON A
SPONSOR GROUP MEMBER IF THE  SPONSOR  GROUP  MEMBER  DOES  NOT  PURCHASE
INSURANCE. IF SO AUTHORIZED BY THE INSURER, THE SPONSOR GROUP MAY AGGRE-
GATE THE GROUP MEMBERS' PREMIUMS AND REMIT THEM TO THE INSURER OR TO THE
LICENSED INSURANCE AGENT OR BROKER REPRESENTING THE SPONSOR GROUP. IF AN
INSURER  AUTHORIZES  A SPONSOR GROUP TO AGGREGATE AND REMIT THE PREMIUMS
OF SPONSOR GROUP MEMBERS, THEN PAYMENT TO THE SPONSOR GROUP BY A SPONSOR
GROUP MEMBER SHALL BE DEEMED TO BE PAYMENT TO THE INSURER.
  (D) (1) ANY POLICY DIVIDEND, RETROSPECTIVE PREMIUM CREDIT,  OR  RETRO-
SPECTIVE PREMIUM REFUND NOT DISTRIBUTED SHALL BE:
  (A)  APPLIED  TO  REDUCE  FUTURE  PREMIUMS  AND,  ACCORDINGLY,  FUTURE
CONTRIBUTIONS, OF EXISTING OR FUTURE GROUP SPONSOR MEMBERS, OR BOTH; OR
  (B) PAID OR REFUNDED TO THOSE SPONSOR GROUP  MEMBERS  INSURED  ON  THE
DATE  THE  PAYMENT  OR  REFUND  IS  MADE  TO  THE GROUP POLICYHOLDER, IF
DISTRIBUTED BY THE GROUP POLICYHOLDER, OR ON THE  DATE  OF  MAILING,  IF
DISTRIBUTED  DIRECTLY  BY THE INSURER, SUBJECT TO THE FOLLOWING REQUIRE-
MENTS:
  (I) THE INSURER SHALL BE RESPONSIBLE FOR DETERMINING THE ALLOCATION OF
THE PAYMENT OR REFUND TO THE SPONSOR GROUP MEMBERS;
  (II) IF THE GROUP POLICYHOLDER DISTRIBUTES THE PAYMENT OR REFUND,  THE
INSURER  SHALL BE RESPONSIBLE FOR AUDIT TO ASCERTAIN THAT THE PAYMENT OR
REFUND IS ACTUALLY MADE IN ACCORDANCE WITH THE ALLOCATION PROCEDURE; AND
  (III) IF THE GROUP POLICYHOLDER FAILS TO MAKE THE PAYMENT  OR  REFUND,
THE  INSURER SHALL MAKE THE PAYMENT OR REFUND DIRECTLY OR USE THE METHOD
PROVIDED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH.
  (2) NOTWITHSTANDING PARAGRAPH ONE OF THIS SUBSECTION,  IF  A  DIVIDEND
ACCRUES  UPON  TERMINATION  OF  COVERAGE  UNDER A GROUP POLICY, THEN THE
GROUP POLICYHOLDER SHALL PAY OR REFUND THE DIVIDEND TO THE SPONSOR GROUP
MEMBERS INSURED ON THE DATE THE PAYMENT OR REFUND IS MADE TO  THE  GROUP
POLICYHOLDER.
  (E)  THE INSURER SHALL TREAT IN LIKE MANNER ALL ELIGIBLE SPONSOR GROUP
MEMBERS OF THE SAME CLASS AND SPONSOR STATUS.
  (F) A GROUP POLICY OR CERTIFICATE WRITTEN  PURSUANT  TO  THIS  SECTION
SHALL  NOT  BE  ELIGIBLE FOR PLACEMENT BY AN EXCESS LINE BROKER LICENSED
PURSUANT TO ARTICLE TWENTY-ONE OF THIS CHAPTER.
  (G) A GROUP POLICY WRITTEN PURSUANT  TO  THIS  SECTION  SHALL  PROVIDE
SEPARATE  LIMITS  OF  COVERAGE UNDER THE CERTIFICATE ISSUED TO A SPONSOR
GROUP MEMBER.

A. 11268--A                         4

  (H)(1) THE INSURER SHALL BE RESPONSIBLE FOR THE MAILING OR DELIVERY OF
A CERTIFICATE OF INSURANCE TO EACH SPONSOR GROUP  MEMBER  INSURED  UNDER
THE  GROUP POLICY. THE INSURER ALSO SHALL BE RESPONSIBLE FOR THE MAILING
OR DELIVERY TO EACH SPONSOR GROUP MEMBER OF ANY AMENDED  CERTIFICATE  OF
INSURANCE, OR ENDORSEMENT TO THE CERTIFICATE, WHENEVER THERE IS A CHANGE
OF  LIMITS;  CHANGE  IN TYPE OF COVERAGE; ADDITION, REDUCTION, OR ELIMI-
NATION OF COVERAGE; OR ADDITION OF AN EXCLUSION, UNDER THE GROUP  POLICY
OR  CERTIFICATE.  IF SO AUTHORIZED BY THE INSURER, THE SPONSOR GROUP MAY
MAIL OR DELIVER CERTIFICATES, ENDORSEMENTS AND OTHER COVERAGE NOTICES TO
THE SPONSOR GROUP MEMBERS ON BEHALF OF THE INSURER.
  (2) THE CERTIFICATE SHALL CONTAIN IN SUBSTANCE ALL MATERIAL TERMS  AND
CONDITIONS  OF COVERAGE AFFORDED TO THE SPONSOR GROUP MEMBER, UNLESS THE
GROUP POLICY IS INCORPORATED BY REFERENCE AND A COPY OF THE GROUP POLICY
ACCOMPANIES THE CERTIFICATE.
  (3) IF THE COVERAGE AFFORDED TO A SPONSOR GROUP MEMBER  IS  EXCESS  OF
OTHER  APPLICABLE INSURANCE COVERAGE, THEN THE CERTIFICATE SHALL CONTAIN
A NOTICE ADVISING THE SPONSOR GROUP MEMBER THAT, IF THE MEMBER HAS OTHER
INSURANCE COVERAGE, SPECIFIED COVERAGES UNDER THE GROUP POLICY SHALL  BE
EXCESS OVER THE OTHER INSURANCE.
  (I)  A  GROUP POLICYHOLDER SHALL COMPLY WITH THE PROVISIONS OF SECTION
TWO THOUSAND ONE HUNDRED TWENTY-TWO OF THIS CHAPTER, IN THE SAME  MANNER
AS  AN  INSURANCE PRODUCER, IN ANY ADVERTISEMENT, SIGN, PAMPHLET, CIRCU-
LAR, CARD, OR OTHER PUBLIC ANNOUNCEMENT REFERRING TO  COVERAGE  UNDER  A
GROUP POLICY OR CERTIFICATE.
  (J)  A  GROUP  POLICY  OR  CERTIFICATE SHALL NOT BE SUBJECT TO SECTION
THREE THOUSAND FOUR HUNDRED TWENTY-FIVE OR SECTION THREE  THOUSAND  FOUR
HUNDRED  TWENTY-SIX  OF  THIS  ARTICLE. THE FOLLOWING REQUIREMENTS SHALL
APPLY IN REGARD TO TERMINATION OF COVERAGE:
  (1) AN INSURER MAY CANCEL  A  GROUP  POLICY  OR  CERTIFICATE  ONLY  IF
CANCELLATION  IS  BASED ON ONE OR MORE OF THE REASONS SET FORTH IN PARA-
GRAPH ONE OF SUBSECTION (C) OF SECTION THREE THOUSAND FOUR HUNDRED TWEN-
TY-SIX OF THIS ARTICLE; PROVIDED, HOWEVER, THAT AN ACT OR OMISSION BY  A
SPONSOR GROUP MEMBER THAT WOULD CONSTITUTE THE BASIS FOR CANCELLATION OF
AN  INDIVIDUAL  CERTIFICATE SHALL NOT CONSTITUTE THE BASIS FOR CANCELLA-
TION OF THE GROUP POLICY.
  (2)(A) AN INSURER'S CANCELLATION OF  A  GROUP  POLICY,  INCLUDING  ALL
CERTIFICATES, SHALL NOT BECOME EFFECTIVE UNTIL FORTY-FIVE DAYS, OR TWEN-
TY DAYS IF BASED UPON NON-PAYMENT OF PREMIUM, AFTER THE INSURER MAILS OR
DELIVERS WRITTEN NOTICE OF CANCELLATION TO THE GROUP POLICYHOLDER AT THE
MAILING  ADDRESS SHOWN IN THE POLICY, AND TO THE SPONSOR GROUP MEMBER AT
THE SPONSOR GROUP MEMBER'S MAILING ADDRESS.
  (B) AN INSURER'S CANCELLATION OF AN INDIVIDUAL CERTIFICATE  SHALL  NOT
BECOME EFFECTIVE UNTIL FORTY-FIVE DAYS AFTER THE INSURER MAILS OR DELIV-
ERS  WRITTEN  NOTICE  OF CANCELLATION TO THE SPONSOR GROUP MEMBER AT THE
SPONSOR GROUP MEMBER'S MAILING ADDRESS AND TO THE GROUP POLICYHOLDER  AT
THE MAILING ADDRESS SHOWN IN THE GROUP POLICY.
  (C)  (I) A GROUP POLICYHOLDER MAY CANCEL A GROUP POLICY, INCLUDING ALL
CERTIFICATES, OR ANY INDIVIDUAL CERTIFICATE, FOR ANY REASON, UPON NINETY
DAYS WRITTEN NOTICE TO THE INSURER AND EACH SPONSOR GROUP MEMBER.
  (II) THE GROUP POLICYHOLDER SHALL MAIL OR DELIVER  WRITTEN  NOTICE  TO
EACH  AFFECTED  GROUP MEMBER OF THE GROUP POLICYHOLDER'S CANCELLATION OF
THE GROUP POLICY OR CERTIFICATE AND THE EFFECTIVE DATE OF  CANCELLATION.
THE  GROUP  POLICYHOLDER SHALL MAIL OR DELIVER THE WRITTEN NOTICE TO THE
SPONSOR GROUP MEMBER'S MAILING ADDRESS AT LEAST NINETY DAYS PRIOR TO THE
EFFECTIVE DATE OF THE CANCELLATION.

A. 11268--A                         5

  (3)(A) UNLESS THE GROUP POLICY PROVIDES FOR A  LONGER  POLICY  PERIOD,
THE  POLICY  AND  ALL  CERTIFICATES  SHALL  BE  ISSUED  OR RENEWED FOR A
ONE-YEAR POLICY PERIOD.
  (B)  THE  SPONSOR  GROUP MEMBER SHALL BE ENTITLED TO RENEW THE CERTIF-
ICATE UPON TIMELY PAYMENT OF THE PREMIUM BILLED  TO  THE  SPONSOR  GROUP
MEMBER FOR THE RENEWAL, UNLESS:
  (I)  THE INSURER MAILS OR DELIVERS TO THE SPONSOR GROUP MEMBER WRITTEN
NOTICE OF NONRENEWAL OR CONDITIONAL RENEWAL; AND
  (II) THE INSURER MAILS OR DELIVERS WRITTEN NOTICE AT LEAST NINETY, BUT
NOT MORE THAN TWO HUNDRED FORTY DAYS PRIOR TO THE EXPIRATION DATE SPECI-
FIED IN THE POLICY OR, IF THE POLICY DOES NOT SPECIFY A DATE,  THEN  THE
NEXT ANNIVERSARY DATE OF THE POLICY.
  (4) WHERE THE GROUP POLICYHOLDER NONRENEWS THE GROUP POLICY, THE GROUP
POLICYHOLDER  SHALL MAIL OR DELIVER WRITTEN NOTICE TO EACH SPONSOR GROUP
MEMBER ADVISING THE SPONSOR GROUP MEMBER  OF  NONRENEWAL  OF  THE  GROUP
POLICY  AND  THE  EFFECTIVE  DATE OF NONRENEWAL. THE GROUP POLICY HOLDER
SHALL MAIL OR DELIVER THE WRITTEN NOTICE AT LEAST NINETY DAYS  PRIOR  TO
THE NONRENEWAL.
  (5)  EVERY  NOTICE OF CANCELLATION, NONRENEWAL, OR CONDITIONAL RENEWAL
SHALL CONTAIN THE SPECIFIC REASON OR REASONS FOR CANCELLATION,  NONRENE-
WAL, OR CONDITIONAL RENEWAL.
  (6)(A)  AN INSURER SHALL NOT BE REQUIRED UNDER THIS SUBSECTION TO GIVE
NOTICE TO A SPONSOR GROUP MEMBER IF THE  INSURER  HAS  BEEN  ADVISED  BY
EITHER  THE  GROUP  POLICYHOLDER  OR  ANOTHER INSURER THAT SUBSTANTIALLY
SIMILAR COVERAGE HAS BEEN OBTAINED FROM THE OTHER INSURER WITHOUT  LAPSE
OF COVERAGE.
  (B)  A  GROUP POLICYHOLDER SHALL NOT BE REQUIRED UNDER THIS SUBSECTION
TO GIVE NOTICE TO SPONSOR GROUP MEMBER IF SUBSTANTIALLY SIMILAR COVERAGE
HAS BEEN OBTAINED FROM ANOTHER INSURER WITHOUT LAPSE OF COVERAGE.
  (K) IF AN INSURER CANCELS OR  NONRENEWS  A  RENTERS'  INSURANCE  GROUP
POLICY,  THEN  THE  INSURER  SHALL  OFFER TO CONVERT A CERTIFICATE TO AN
INDIVIDUAL INSURANCE POLICY, USING THE INSURER'S FILED RATES  AND  FORMS
FOR  INDIVIDUAL  POLICIES, FOR ANY REMAINING PART OF THE REQUIRED POLICY
PERIOD SET FORTH IN SECTION THREE THOUSAND FOUR HUNDRED  TWENTY-FIVE  OF
THIS ARTICLE.
  S 3. This act shall take effect immediately.