Assembly Bill A9243B

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

                                  9243

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            November 9, 2009
                               ___________

Introduced  by  M.  of  A.  O'DONNELL  --  read once and referred to the
  Committee on Insurance

AN ACT to amend the insurance law, in  relation  to  providing  enhanced
  consumer  protections  in  the event of an insurer's discontinuance of
  coverage

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

  Section  1.  Short  title. This act shall be known and may be cited as
"Ian's law".
  S 2. Paragraph 3 of subsection (p) of section 3221  of  the  insurance
law,  as added by chapter 661 of the laws of 1997, is amended to read as
follows:
  (3)(A) In any case in which an insurer decides to discontinue offering
a particular class of group or blanket policy of hospital,  surgical  or
medical  expense  insurance  offered in the small or large group market,
the policy of such class may be discontinued by the insurer  in  accord-
ance with this chapter in such market only if:
  (i)  the insurer REQUESTS THAT THE SUPERINTENDENT APPROVE SUCH DISCON-
TINUANCE, IN SUCH FORM AS DESIGNATED BY THE SUPERINTENDENT, AND RECEIVES
SUCH APPROVAL; PROVIDED THAT:
  (I) THE SUPERINTENDENT SHALL, NO SOONER THAN SIXTY DAYS AFTER  RECEIPT
OF  SUCH  REQUEST, GRANT SUCH APPROVAL ONLY IF HE OR SHE DETERMINES THAT
THE DISCONTINUANCE OF THE COVERAGE OF THIS CLASS IN SUCH MARKET  BY  THE
INSURER IS NEITHER WITH THE INTENT NOR AS A PRETEXT TO DISCONTINUING THE
COVERAGE OF ANY POLICYHOLDER OR ANY INSURED DUE TO THE CLAIMS EXPERIENCE
OR  ANY  HEALTH  STATUS-RELATED  FACTOR  RELATING TO ANY POLICYHOLDER OR
INSURED COVERED BY ANY SUCH POLICY; AND
  (II) THE SUPERINTENDENT SHALL MAKE SUCH DETERMINATION ONLY AFTER EXAM-
INING AND TAKING INTO CONSIDERATION  THE  CLAIM  HISTORIES  AND  PREMIUM
RATES  FOR  EACH  POLICY IN THE CLASS, THE HISTORICAL PROFITS AND LOSSES
FOR THE CLASS OF POLICIES, COMMENTS FROM POLICYHOLDERS OR OTHERS SUBMIT-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14951-04-9
              

A. 9243                             2

TED TO THE SUPERINTENDENT WITHIN THIRTY DAYS AFTER RECEIPT OF  ANY  SUCH
REQUEST,  AND  ANY  OTHER  INFORMATION  OR  ANALYSIS  THE SUPERINTENDENT
DEMANDS OR DEEMS RELEVANT;
  (II)  THE  INSURER,  NO  LATER  THAN  THE DATE ANY SUCH REQUEST TO THE
SUPERINTENDENT IS MADE, PROVIDES WRITTEN  NOTICE  TO  EACH  POLICYHOLDER
PROVIDED  COVERAGE OF THIS CLASS IN SUCH MARKET (AND TO ALL PARTICIPANTS
AND BENEFICIARIES COVERED UNDER SUCH COVERAGE) OF  SUCH  REQUEST,  ALONG
WITH  NOTICE OF THE EARLIEST POSSIBLE DATE THAT THE SUPERINTENDENT MIGHT
APPROVE SUCH REQUEST, THE EARLIEST  POSSIBLE  DATE  THAT  SUCH  COVERAGE
COULD  BE  DISCONTINUED, AND A STATEMENT WRITTEN IN PLAIN ENGLISH OF THE
OBLIGATIONS OF THE INSURER AND THE RIGHTS OF POLICYHOLDERS  PURSUANT  TO
THIS SUBPARAGRAPH AND SUBPARAGRAPHS (A-1) AND (D) OF THIS PARAGRAPH;
 (III)  THE  INSURER,  UPON  APPROVAL  BY THE SUPERINTENDENT OF ANY SUCH
REQUEST:
  (I) provides written notice to each policyholder provided coverage  of
this  class  in  such  market (and to all participants and beneficiaries
covered under such coverage) of such discontinuance at least ninety days
prior to the date of discontinuance of such coverage;
  [(ii) the insurer] (II) offers to each policyholder provided  coverage
of  this  class  in  such market, the option to purchase all (or, in the
case of the large  group  market,  any)  other  hospital,  surgical  and
medical  expense  coverage  currently  being offered by the insurer to a
group in such market; and
  [(iii)] (III) in exercising the option to discontinue coverage of this
class and in offering the option of coverage under [item  (ii)]  SUBITEM
(II)  of  this  [subparagraph]  ITEM, the insurer acts uniformly without
regard to the claims experience of those  policyholders  or  any  health
status-related  factor  relating to any insureds covered or new insureds
who may become eligible for such coverage.
  (A-1) WHERE AN INSURER DISCONTINUES A PARTICULAR  CLASS  OF  GROUP  OR
BLANKET  POLICY  OF  HOSPITAL,  SURGICAL  OR  MEDICAL  EXPENSE INSURANCE
OFFERED IN THE SMALL OR LARGE GROUP MARKET, OTHER THAN WHERE THE  SUPER-
INTENDENT AUTHORIZES SUCH DISCONTINUANCE PURSUANT TO SUBPARAGRAPH (A) OF
THIS  PARAGRAPH,  SUCH  INSURER  SHALL BE LIABLE TO THE FORMER HOLDER OR
BENEFICIARY OF SUCH POLICY, OR TO HIS OR HER  ESTATE,  FOR  COMPENSATORY
DAMAGES  ARISING  FROM  SUCH  UNLAWFUL  DISCONTINUANCE,  PLUS  COSTS AND
REASONABLE ATTORNEYS' FEES, IN AN ACTION COMMENCED NO LATER  THAN  THREE
YEARS  AFTER  THE  DATE  OF SUCH DISCONTINUANCE. IN ANY SUCH ACTION, THE
COURT MAY GRANT SUCH INJUNCTIVE RELIEF AS THE  COURT  MAY  DEEM  PROPER.
ANY DETERMINATION BY THE SUPERINTENDENT, PURSUANT TO SUBPARAGRAPH (A) OF
THIS  PARAGRAPH,  SHALL BE REVIEWABLE IN THE MANNER SPECIFIED BY ARTICLE
SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
  (A-2) THE SUPERINTENDENT IS AUTHORIZED TO ADOPT SUCH RULES  AND  REGU-
LATIONS  AS  HE  OR SHE MAY DEEM NECESSARY TO EFFECTUATE THE PURPOSES OF
SUBPARAGRAPH (A) OF THIS PARAGRAPH, INCLUDING, BUT NOT LIMITED TO, IDEN-
TIFYING FACTORS THAT CREATE A PRESUMPTION THAT THE DISCONTINUANCE OF THE
COVERAGE OF ANY CLASS IS WITH THE INTENT OR AS A PRETEXT TO  DISCONTINU-
ING  THE  COVERAGE  OF ANY POLICYHOLDER OR ANY INSURED DUE TO THE CLAIMS
EXPERIENCE OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO  ANY  POLICY-
HOLDER OR INSURED COVERED BY ANY SUCH POLICY.
  (B) In any case in which an insurer elects to discontinue offering all
hospital,  surgical  and  medical  expense  coverage  in the small group
market or the large group market, or both markets, in this state, health
insurance coverage may be discontinued by the insurer only if:
  (i) the insurer provides written notice to the superintendent  and  to
each policyholder (and participants and beneficiaries covered under such

A. 9243                             3

coverage)  of such discontinuance at least one hundred eighty days prior
to the date of the discontinuance of such coverage;
  (ii)  all  hospital,  surgical  and medical expense coverage issued or
delivered for issuance in this state in  such  market  (or  markets)  is
discontinued  and  coverage  under  such  policies  in  such  market (or
markets) is not renewed; and
  (iii) in addition to the notice to the superintendent referred  to  in
item  (i) of this subparagraph, the insurer must provide the superinten-
dent with a written plan to minimize potential disruption in the market-
place occasioned by its withdrawal from the market.
  (C) In the case of a discontinuance under  subparagraph  (B)  of  this
paragraph  in  a market, the insurer may not provide for the issuance of
any group or blanket policy of hospital,  surgical  or  medical  expense
insurance  in  that  market  in  this  state during the five year period
beginning on the date of the discontinuance of the last health insurance
policy not so renewed.
  (D) THE SUPERINTENDENT SHALL, WHERE MAJOR MEDICAL INSURANCE OR  INSUR-
ANCE  PROVIDING  MAJOR MEDICAL TYPE BENEFITS IS DISCONTINUED PURSUANT TO
SUBPARAGRAPH (A) OR (B) OF THIS PARAGRAPH, ORDER THAT AN EXTENDED  BENE-
FIT SHALL BE PROVIDED DURING TOTAL DISABILITY, WITH RESPECT TO THE SICK-
NESS, INJURY OR PREGNANCY WHICH CAUSED THE DISABILITY, OF AT LEAST EIGH-
TEEN  MONTHS  SUBSEQUENT  TO  DISCONTINUANCE OF INSURANCE UNLESS SIMILAR
COVERAGE IS AFFORDED FOR THE TOTAL DISABILITY UNDER ANOTHER GROUP PLAN.
  S 3. Paragraph 3 of subsection (j) of section 4305  of  the  insurance
law,  as added by chapter 661 of the laws of 1997, is amended to read as
follows:
  (3)(A) In any case in  which  a  corporation  decides  to  discontinue
offering  a  particular  class of group or blanket contract of hospital,
surgical or medical expense insurance offered  in  the  small  or  large
group  market,  the  contract  of  such class may be discontinued by the
corporation in accordance with this chapter in such market only if:
  (i) the corporation REQUESTS  THAT  THE  SUPERINTENDENT  APPROVE  SUCH
DISCONTINUANCE,  IN  SUCH  FORM AS DESIGNATED BY THE SUPERINTENDENT, AND
RECEIVES SUCH APPROVAL; PROVIDED THAT:
  (I) THE SUPERINTENDENT SHALL, NO SOONER THAN SIXTY DAYS AFTER  RECEIPT
OF  SUCH  REQUEST, GRANT SUCH APPROVAL ONLY IF HE OR SHE DETERMINES THAT
THE DISCONTINUANCE OF THE COVERAGE OF THIS CLASS IN SUCH MARKET  BY  THE
INSURER  IS  NEITHER  WITH THE INTENT NOR AS A PRETEXT TO, DISCONTINUING
THE COVERAGE OF ANY CONTACT HOLDER OR ANY SUBSCRIBER DUE TO  THE  CLAIMS
EXPERIENCE  OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY CONTRACT
HOLDER OR SUBSCRIBER COVERED BY ANY SUCH CONTRACT; AND
  (II) THE SUPERINTENDENT SHALL MAKE SUCH DETERMINATION ONLY AFTER EXAM-
INING AND TAKING INTO CONSIDERATION  THE  CLAIM  HISTORIES  AND  PREMIUM
RATES  FOR EACH CONTRACT IN THE CLASS, THE HISTORICAL PROFITS AND LOSSES
FOR THE CLASS OF CONTRACTS, COMMENTS FROM  CONTRACT  HOLDERS  OR  OTHERS
SUBMITTED  TO THE SUPERINTENDENT WITHIN THIRTY DAYS AFTER RECEIPT OF ANY
SUCH REQUEST, AND ANY OTHER INFORMATION OR ANALYSIS  THE  SUPERINTENDENT
DEMANDS OR DEEMS RELEVANT;
  (II)  THE  CORPORATION, NO LATER THAN THE DATE ANY SUCH REQUEST TO THE
SUPERINTENDENT IS MADE, PROVIDES WRITTEN NOTICE TO EACH CONTRACT  HOLDER
PROVIDED  COVERAGE OF THIS CLASS IN SUCH MARKET (AND TO ALL PARTICIPANTS
AND BENEFICIARIES COVERED UNDER SUCH COVERAGE) OF  SUCH  REQUEST,  ALONG
WITH  NOTICE OF THE EARLIEST POSSIBLE DATE THAT THE SUPERINTENDENT MIGHT
APPROVE SUCH REQUEST, AND THE EARLIEST POSSIBLE DATE THAT SUCH  COVERAGE
COULD  BE  DISCONTINUED, AND A STATEMENT WRITTEN IN PLAIN ENGLISH OF THE
OBLIGATIONS OF THE CORPORATION AND THE RIGHTS OF CONTRACT HOLDERS PURSU-

A. 9243                             4

ANT TO THIS SUBPARAGRAPH AND SUBPARAGRAPHS (A-1) AND (D) OF  THIS  PARA-
GRAPH;
  (III) THE CORPORATION, UPON APPROVAL BY THE SUPERINTENDENT OF ANY SUCH
REQUEST:
  (I)  provides written notice to each contract holder provided coverage
of this class in such market (and to all participants and  beneficiaries
covered under such coverage) of such discontinuance at least ninety days
prior to the date of discontinuance of such coverage;
  [(ii)  the  corporation]  (II) offers to each contract holder provided
coverage of this class in such market, the option to purchase  all  (or,
in the case of the large group market, any) other hospital, surgical and
medical expense coverage currently being offered by the corporation to a
group in such market; and
  [(iii)] (III) in exercising the option to discontinue coverage of this
class  and  in offering the option of coverage under [item (ii)] SUBITEM
(II) of this [subparagraph] ITEM, the corporation acts uniformly without
regard to the claims experience of those contract holders or any  health
status-related  factor  relating  to  any  subscribers  covered  or  new
subscribers who may become eligible for such coverage.
  (A-1) WHERE A CORPORATION DISCONTINUES A PARTICULAR CLASS OF GROUP  OR
BLANKET  CONTRACT  OF  HOSPITAL,  SURGICAL  OR MEDICAL EXPENSE INSURANCE
OFFERED IN THE SMALL OR LARGE GROUP MARKET, OTHER THAN WHERE THE  SUPER-
INTENDENT AUTHORIZES SUCH DISCONTINUANCE PURSUANT TO SUBPARAGRAPH (A) OF
THIS PARAGRAPH, SUCH CORPORATION SHALL BE LIABLE TO THE FORMER HOLDER OR
BENEFICIARY  OF SUCH CONTRACT, OR TO HIS OR HER ESTATE, FOR COMPENSATORY
DAMAGES ARISING  FROM  SUCH  UNLAWFUL  DISCONTINUANCE,  PLUS  COSTS  AND
REASONABLE  ATTORNEYS'  FEES, IN AN ACTION COMMENCED NO LATER THAN THREE
YEARS AFTER THE DATE OF SUCH DISCONTINUANCE. IN  ANY  SUCH  ACTION,  THE
COURT MAY GRANT SUCH INJUNCTIVE RELIEF AS THE COURT MAY DEEM PROPER. ANY
DETERMINATION  BY  THE  SUPERINTENDENT,  PURSUANT TO SUBPARAGRAPH (A) OF
THIS PARAGRAPH, SHALL BE REVIEWABLE IN THE MANNER SPECIFIED  BY  ARTICLE
SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
  (A-2)  THE  SUPERINTENDENT IS AUTHORIZED TO ADOPT SUCH RULES AND REGU-
LATIONS AS IS NECESSARY TO EFFECTUATE THE PURPOSES OF  SUBPARAGRAPH  (A)
OF  THIS  PARAGRAPH,  INCLUDING, BUT NOT LIMITED TO, IDENTIFYING FACTORS
THAT CREATE A PRESUMPTION THAT THE DISCONTINUANCE OF THE COVERAGE OF ANY
CLASS IS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING  THE  COVERAGE
OF ANY CONTRACT HOLDER OR ANY SUBSCRIBER DUE TO THE CLAIMS EXPERIENCE OR
ANY  HEALTH  STATUS-RELATED  FACTOR  RELATING  TO ANY CONTRACT HOLDER OR
SUBSCRIBER COVERED BY ANY SUCH CONTRACT.
  (B) In any case in which a corporation elects to discontinue  offering
all  hospital,  surgical and medical expense coverage in the small group
market or the large group market, or both markets, in this state, health
insurance coverage may be discontinued by the corporation only if:
  (i) the corporation provides written notice to the superintendent  and
to  each  contract  holder  (and  participants and beneficiaries covered
under such coverage) of such discontinuance at least one hundred  eighty
days prior to the date of the discontinuance of such coverage;
  (ii)  all  hospital,  surgical  and medical expense coverage issued or
delivered for issuance in this  state  in  such  market  or  markets  is
discontinued and coverage under such contracts in such market or markets
is not renewed; and
  (iii)  in  addition to the notice to the superintendent referred to in
item (i) of this subparagraph, the corporation must provide  the  super-
intendent  with  a  written plan to minimize potential disruption in the
marketplace occasioned by its withdrawal from the market.

A. 9243                             5

  (C) In the case of a discontinuance under  subparagraph  (B)  of  this
paragraph  in a market, the corporation may not provide for the issuance
of any group or  blanket  contract  of  hospital,  surgical  or  medical
expense  insurance  in  that  market  in this state during the five-year
period  beginning  on  the date of the discontinuance of the last health
insurance contract not so renewed.
  (D) THE SUPERINTENDENT SHALL, WHERE MAJOR MEDICAL INSURANCE OR  INSUR-
ANCE  PROVIDING  MAJOR MEDICAL TYPE BENEFITS IS DISCONTINUED PURSUANT TO
SUBPARAGRAPH (A) OR (B) OF THIS PARAGRAPH, ORDER THAT AN EXTENDED  BENE-
FIT SHALL BE PROVIDED DURING TOTAL DISABILITY, WITH RESPECT TO THE SICK-
NESS, INJURY OR PREGNANCY WHICH CAUSED THE DISABILITY, OF AT LEAST EIGH-
TEEN  MONTHS  SUBSEQUENT  TO  DISCONTINUANCE OF INSURANCE UNLESS SIMILAR
COVERAGE IS AFFORDED FOR THE TOTAL DISABILITY UNDER ANOTHER GROUP PLAN.
  S 4. This act shall take effect immediately.

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

                                 9243--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            November 9, 2009
                               ___________

Introduced  by  M.  of  A.  O'DONNELL  --  read once and referred to the
  Committee on Insurance -- recommitted to the Committee on Insurance in
  accordance with Assembly Rule 3, sec. 2 -- committee discharged,  bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

AN ACT to amend the insurance law, in  relation  to  providing  enhanced
  consumer  protections  in  the event of an insurer's discontinuance of
  coverage

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

  Section  1.  Short  title. This act shall be known and may be cited as
"Ian's law".
  S 2. Paragraph 3 of subsection (p) of section 3221  of  the  insurance
law,  as added by chapter 661 of the laws of 1997, is amended to read as
follows:
  (3)(A) In any case in which an insurer decides to discontinue offering
a particular class of group or blanket policy of hospital,  surgical  or
medical  expense  insurance  offered in the small or large group market,
the policy of such class may be discontinued by the insurer  in  accord-
ance with this chapter in such market only if:
  (i)  the insurer provides written notice to each policyholder provided
coverage of this class in such market (and to all [participants] EMPLOY-
EES and [beneficiaries] MEMBER INSUREDS covered under such coverage)  of
such discontinuance at least ninety days prior to the date of discontin-
uance of such coverage.  THE WRITTEN NOTICE SHALL CONSPICUOUSLY INCLUDE:
  (I)  AN  EXPLANATION,  IN  PLAIN  LANGUAGE,  OF THE POLICYHOLDER'S AND
COVERED EMPLOYEE'S OR MEMBER INSURED'S RIGHTS UNDER THIS PARAGRAPH;
  (II) AN EXPLANATION THAT THE INSURER, IN DISCONTINUING OFFERING COVER-
AGE, MUST ACT UNIFORMLY WITHOUT REGARD TO THE CLAIMS EXPERIENCE  OF  THE
POLICYHOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY PARTIC-
ULAR  COVERED  EMPLOYEE,  MEMBER  INSURED OR DEPENDENT OR PARTICULAR NEW

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14951-09-0
              

A. 9243--A                          2

EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME  ELIGIBLE  FOR  THE
COVERAGE;  AND THAT THE INSURER MAY NOT DISCONTINUE THE COVERAGE OF THIS
CLASS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE  COVERAGE  OF
ANY SUCH EMPLOYEE, MEMBER INSURED OR DEPENDENT;
  (III)  AN  EXPLANATION  AS TO HOW TO CONTACT THE SUPERINTENDENT IF THE
POLICYHOLDER, COVERED EMPLOYEE  OR  MEMBER  INSURED  BELIEVES  THAT  THE
INSURER  IS  DISCONTINUING THE COVERAGE OF THIS CLASS WITH THE INTENT OR
AS A PRETEXT TO DISCONTINUING THE COVERAGE  OF  ANY  PARTICULAR  COVERED
EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER
INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR THE COVERAGE; AND
  (IV)  A  STATEMENT THAT, WITHIN NINETY DAYS AFTER THE INSURER MAILS OR
DELIVERS THE WRITTEN NOTICE OF DISCONTINUANCE REQUIRED BY THIS ITEM, THE
SUPERINTENDENT MAY ISSUE AN ORDER TO THE INSURER TO SUSPEND ITS  DISCON-
TINUANCE  OF THE CLASS OF POLICIES, PENDING A FINAL DETERMINATION OF THE
SUPERINTENDENT, IF THE SUPERINTENDENT RECEIVES EVIDENCE FROM  A  POLICY-
HOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE HAS REASON TO
BELIEVE,  THAT  THE  INSURER IS SEEKING TO DISCONTINUE COVERAGE WITH THE
INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF  ANY  PARTICULAR
COVERED  EMPLOYEE, MEMBER INSURED OR DEPENDENT DUE TO THE CLAIMS EXPERI-
ENCE OF THE POLICYHOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO
ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR  PARTIC-
ULAR  NEW  EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE
FOR SUCH COVERAGE;
  (ii) the insurer offers to each policyholder provided coverage of this
class in such market, the option to purchase all (or, in the case of the
large group market, any) other hospital, surgical  and  medical  expense
coverage  currently  being  offered  by  the  insurer to a group in such
market; [and]
  (iii) in exercising the option to discontinue coverage of  this  class
and  in offering the option of coverage under item (ii) of this subpara-
graph, the insurer acts uniformly without regard to the  claims  experi-
ence of those policyholders or any health status-related factor relating
to  any  [insureds covered or new insureds] PARTICULAR COVERED EMPLOYEE,
MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE,  MEMBER  INSURED
OR  DEPENDENT  who may become eligible for such coverage AND THE INSURER
IS NOT DISCONTINUING THE COVERAGE OF THIS CLASS WITH THE INTENT OR AS  A
PRETEXT  TO  DISCONTINUING  THE  COVERAGE  OF  ANY SUCH EMPLOYEE, MEMBER
INSURED OR DEPENDENT; AND
  (IV) AT LEAST NINETY DAYS PRIOR TO THE DATE OF DISCONTINUANCE OF  SUCH
COVERAGE,  THE  INSURER PROVIDES WRITTEN NOTICE TO THE SUPERINTENDENT OF
SUCH DISCONTINUANCE, AND AN OFFICER OR DIRECTOR OF THE INSURER CERTIFIES
TO THE SUPERINTENDENT THAT THE INSURER HAS COMPLIED WITH ITEMS (I), (II)
AND (III) OF THIS SUBPARAGRAPH. WITHIN SEVEN DAYS OF THE  COMPLETION  OF
THE  MAILING  OR  DELIVERY  OF  THE  NOTICE REQUIRED BY ITEM (I) OF THIS
SUBPARAGRAPH, THE INSURER SHALL NOTIFY THE SUPERINTENDENT OF THE DATE OR
DATES THAT THE INSURER MAILED OR DELIVERED THE NOTICE TO ALL POLICYHOLD-
ERS, COVERED EMPLOYEES, AND MEMBER INSUREDS.
  (B) IF, WITHIN NINETY DAYS AFTER THE INSURER  MAILS  OR  DELIVERS  THE
WRITTEN  NOTICE  OF  DISCONTINUANCE REQUIRED BY ITEM (I) OF SUBPARAGRAPH
(A) OF THIS PARAGRAPH, THE SUPERINTENDENT RECEIVES EVIDENCE FROM A POLI-
CYHOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE HAS  REASON
TO BELIEVE, THAT THE INSURER IS SEEKING TO DISCONTINUE COVERAGE WITH THE
INTENT  OR  AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR
COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT DUE TO THE CLAIMS  EXPERI-
ENCE OF THE POLICYHOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO
ANY  PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTIC-

A. 9243--A                          3

ULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY  BECOME  ELIGIBLE
FOR SUCH COVERAGE:
  (I)  THE  SUPERINTENDENT  MAY ISSUE AN ORDER TO THE INSURER TO SUSPEND
ITS DISCONTINUANCE OF THE CLASS OF POLICIES, PENDING  A  FINAL  DETERMI-
NATION  OF  THE SUPERINTENDENT. IF THE SUPERINTENDENT ISSUES AN ORDER TO
SUSPEND ITS DISCONTINUANCE OF THE CLASS OF POLICIES,  THEN  THE  INSURER
SHALL  PROMPTLY  NOTIFY  EVERY POLICYHOLDER, COVERED EMPLOYEE AND MEMBER
INSURED;
  (II) THE SUPERINTENDENT SHALL REVIEW AND CONSIDER SUCH INFORMATION  AS
THE  SUPERINTENDENT  DEEMS  NECESSARY, INCLUDING THE CLAIM HISTORIES AND
PREMIUM RATES FOR EACH POLICY IN THE CLASS, THE HISTORICAL  PROFITS  AND
LOSSES  FOR THE CLASS OF POLICIES, AND ANY OTHER INFORMATION OR ANALYSIS
THE SUPERINTENDENT DEMANDS OR DEEMS RELEVANT;
  (III) THE SUPERINTENDENT SHALL  ISSUE  A  FINAL  DETERMINATION  WITHIN
NINETY  DAYS  OF ISSUING THE ORDER OF SUSPENSION; PROVIDED, HOWEVER, THE
SUPERINTENDENT MAY EXTEND THE TIME TO ISSUE THE FINAL  DETERMINATION  IF
THE  SUPERINTENDENT EXTENDS THE ORDER OF SUSPENSION UPON GOOD CAUSE; AND
PROVIDED FURTHER THAT IF THE SUPERINTENDENT DETERMINES THAT  AN  INSURER
WAS SEEKING TO DISCONTINUE COVERAGE WITH THE INTENT OR PRETEXT DESCRIBED
IN  SUBPARAGRAPH  (A)  OF  THIS  PARAGRAPH,  THEN  THE INSURER SHALL NOT
DISCONTINUE THE CLASS OF POLICIES AND SHALL PROMPTLY NOTIFY EVERY  POLI-
CYHOLDER, COVERED EMPLOYEE AND MEMBER INSURED; AND
  (IV) THE SUPERINTENDENT MAY HOLD A HEARING IF THE SUPERINTENDENT DEEMS
IT  NECESSARY AND SHALL HOLD A HEARING IF THE INSURER REQUESTS A HEARING
AT ANY TIME BEFORE THE SUPERINTENDENT ISSUES THE FINAL DETERMINATION.
  (C) WHERE AN INSURER DISCONTINUES A PARTICULAR CLASS OF GROUP OR BLAN-
KET POLICY OF HOSPITAL, SURGICAL OR MEDICAL EXPENSE INSURANCE OFFERED IN
THE SMALL OR LARGE GROUP MARKET, OTHER THAN IN THE MANNER PRESCRIBED  BY
SUBPARAGRAPH  (A)  OF THIS PARAGRAPH, THE INSURER SHALL BE LIABLE TO THE
FORMER POLICYHOLDER OR TO THE COVERED EMPLOYEE, MEMBER INSURED,  DEPEND-
ENT OR TO THE ESTATE THEREOF, FOR COMPENSATORY DAMAGES ARISING FROM SUCH
UNLAWFUL  DISCONTINUANCE,  PLUS COSTS AND REASONABLE ATTORNEYS' FEES, IN
AN ACTION COMMENCED NO LATER THAN TWO  YEARS  AFTER  THE  DATE  OF  SUCH
DISCONTINUANCE.  IN ANY SUCH ACTION, THE COURT MAY GRANT SUCH INJUNCTIVE
RELIEF AS THE COURT MAY DEEM PROPER.
  (D) In any case in which an insurer elects to discontinue offering all
hospital, surgical and medical  expense  coverage  in  the  small  group
market or the large group market, or both markets, in this state, health
insurance coverage may be discontinued by the insurer only if:
  (i)  the  insurer provides written notice to the superintendent and to
each policyholder (and [participants and  beneficiaries]  ALL  EMPLOYEES
AND  MEMBER INSUREDS covered under such coverage) of such discontinuance
at least one hundred eighty days prior to the date of the discontinuance
of such coverage;
  (ii) all hospital, surgical and medical  expense  coverage  issued  or
delivered  for  issuance  in  this  state in such market (or markets) is
discontinued and  coverage  under  such  policies  in  such  market  (or
markets) is not renewed; and
  (iii)  in  addition to the notice to the superintendent referred to in
item (i) of this subparagraph, the insurer must provide the  superinten-
dent with a written plan to minimize potential disruption in the market-
place occasioned by its withdrawal from the market.
  [(C)] (E) In the case of a discontinuance under subparagraph [(B)] (D)
of this paragraph in a market, the insurer may not provide for the issu-
ance  of  any  group  or blanket policy of hospital, surgical or medical
expense insurance in that market in this  state  during  the  five  year

A. 9243--A                          4

period  beginning  on  the date of the discontinuance of the last health
insurance policy not so renewed.
  (F)  IF  AN INSURER DECIDES OR ELECTS TO DISCONTINUE OFFERING COVERAGE
PURSUANT TO SUBPARAGRAPH (A) OR (D) OF THIS PARAGRAPH, THEN THE  INSURER
SHALL  PROVIDE AN EXTENDED BENEFIT DURING TOTAL DISABILITY, WITH RESPECT
TO THE SICKNESS, INJURY OR PREGNANCY THAT CAUSED THE DISABILITY,  OF  AT
LEAST  EIGHTEEN  MONTHS SUBSEQUENT TO DISCONTINUANCE OF INSURANCE UNLESS
SIMILAR COVERAGE IS AFFORDED FOR  THE  TOTAL  DISABILITY  UNDER  ANOTHER
GROUP OR BLANKET POLICY.
  S  3.  Paragraph  3 of subsection (j) of section 4305 of the insurance
law, as added by chapter 661 of the laws of 1997, is amended to read  as
follows:
  (3)(A)  In  any  case  in  which  a corporation decides to discontinue
offering a particular class of group or blanket  contract  of  hospital,
surgical  or  medical  expense  insurance  offered in the small or large
group market, the contract of such class  may  be  discontinued  by  the
corporation in accordance with this chapter in such market only if:
  (i)  the  corporation  provides written notice to each contract holder
provided coverage of this class in such  market  (and  to  all  [partic-
ipants] EMPLOYEES and [beneficiaries] MEMBER INSUREDS covered under such
coverage)  of such discontinuance at least ninety days prior to the date
of discontinuance of such coverage. THE WRITTEN NOTICE  SHALL  CONSPICU-
OUSLY INCLUDE:
  (I)  AN  EXPLANATION,  IN PLAIN LANGUAGE, OF THE CONTRACT HOLDER'S AND
COVERED EMPLOYEE'S OR MEMBER INSURED'S RIGHTS UNDER THIS PARAGRAPH;
  (II) AN EXPLANATION THAT THE CORPORATION,  IN  DISCONTINUING  OFFERING
COVERAGE,  MUST ACT UNIFORMLY WITHOUT REGARD TO THE CLAIMS EXPERIENCE OF
THE CONTRACT HOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO  ANY
PARTICULAR  COVERED  EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR
NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY  BECOME  ELIGIBLE  FOR
THE  COVERAGE; AND THAT THE CORPORATION MAY NOT DISCONTINUE THE COVERAGE
OF THIS CLASS WITH THE INTENT OR  AS  A  PRETEXT  TO  DISCONTINUING  THE
COVERAGE OF ANY SUCH EMPLOYEE, MEMBER INSURED OR DEPENDENT;
  (III)  AN  EXPLANATION  AS TO HOW TO CONTACT THE SUPERINTENDENT IF THE
CONTRACT HOLDER, COVERED EMPLOYEE OR MEMBER INSURED  BELIEVES  THAT  THE
CORPORATION  IS DISCONTINUING THE COVERAGE OF THIS CLASS WITH THE INTENT
OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR  COVERED
EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER
INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR THE COVERAGE; AND
  (IV)  A STATEMENT THAT, WITHIN NINETY DAYS AFTER THE CORPORATION MAILS
OR DELIVERS THE WRITTEN NOTICE OF DISCONTINUANCE REQUIRED BY THIS  ITEM,
THE  SUPERINTENDENT MAY ISSUE AN ORDER TO THE CORPORATION TO SUSPEND ITS
DISCONTINUANCE OF THE CLASS OF CONTRACTS, PENDING A FINAL  DETERMINATION
OF  THE  SUPERINTENDENT,  IF THE SUPERINTENDENT RECEIVES EVIDENCE FROM A
CONTRACT HOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE  HAS
REASON TO BELIEVE, THAT THE CORPORATION IS SEEKING TO DISCONTINUE COVER-
AGE WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY
PARTICULAR  COVERED  EMPLOYEE,  MEMBER  INSURED  OR DEPENDENT DUE TO THE
CLAIMS EXPERIENCE OF THE CONTRACT HOLDER OR  ANY  HEALTH  STATUS-RELATED
FACTOR  RELATING  TO  ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR
DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED  OR  DEPENDENT  WHO
MAY BECOME ELIGIBLE FOR SUCH COVERAGE;
  (ii)  the corporation offers to each contract holder provided coverage
of this class in such market, the option to purchase  all  (or,  in  the
case  of  the  large  group  market,  any)  other hospital, surgical and

A. 9243--A                          5

medical expense coverage currently being offered by the corporation to a
group in such market; [and]
  (iii)  in  exercising the option to discontinue coverage of this class
and in offering the option of coverage under item (ii) of this  subpara-
graph, the corporation acts uniformly without regard to the claims expe-
rience  of  those  contract  holders or any health status-related factor
relating to any [subscribers  covered  or  new  subscribers]  PARTICULAR
COVERED  EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOY-
EE, MEMBER INSURED OR DEPENDENT who may become eligible for such  cover-
age  AND THE CORPORATION IS NOT DISCONTINUING THE COVERAGE OF THIS CLASS
WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING  THE  COVERAGE  OF  ANY
SUCH EMPLOYEE, MEMBER INSURED OR DEPENDENT; AND
  (IV)  AT LEAST NINETY DAYS PRIOR TO THE DATE OF DISCONTINUANCE OF SUCH
COVERAGE, THE CORPORATION PROVIDES WRITTEN NOTICE TO THE  SUPERINTENDENT
OF  SUCH  DISCONTINUANCE,  AND AN OFFICER OR DIRECTOR OF THE CORPORATION
CERTIFIES TO THE SUPERINTENDENT THAT THE CORPORATION HAS  COMPLIED  WITH
ITEMS (I), (II) AND (III) OF THIS SUBPARAGRAPH. WITHIN SEVEN DAYS OF THE
COMPLETION OF THE MAILING OR DELIVERY OF THE NOTICE REQUIRED BY ITEM (I)
OF THIS SUBPARAGRAPH, THE CORPORATION SHALL NOTIFY THE SUPERINTENDENT OF
THE DATE OR DATES THAT THE CORPORATION MAILED OR DELIVERED THE NOTICE TO
ALL CONTRACT HOLDERS, COVERED EMPLOYEES, AND MEMBER INSUREDS.
  (B) IF, WITHIN NINETY DAYS AFTER THE CORPORATION MAILS OR DELIVERS THE
WRITTEN  NOTICE  OF  DISCONTINUANCE REQUIRED BY ITEM (I) OF SUBPARAGRAPH
(A) OF THIS PARAGRAPH,  THE  SUPERINTENDENT  RECEIVES  EVIDENCE  FROM  A
CONTRACT  HOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE HAS
REASON TO BELIEVE, THAT THE CORPORATION IS SEEKING TO DISCONTINUE COVER-
AGE WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY
PARTICULAR COVERED EMPLOYEE, MEMBER INSURED  OR  DEPENDENT  DUE  TO  THE
CLAIMS  EXPERIENCE  OF  THE CONTRACT HOLDER OR ANY HEALTH STATUS-RELATED
FACTOR RELATING TO ANY PARTICULAR COVERED EMPLOYEE,  MEMBER  INSURED  OR
DEPENDENT  OR  PARTICULAR  NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO
MAY BECOME ELIGIBLE FOR SUCH COVERAGE:
  (I) THE SUPERINTENDENT MAY  ISSUE  AN  ORDER  TO  THE  CORPORATION  TO
SUSPEND  ITS  DISCONTINUANCE  OF THE CLASS OF CONTRACTS, PENDING A FINAL
DETERMINATION OF THE SUPERINTENDENT. IF  THE  SUPERINTENDENT  ISSUES  AN
ORDER  TO SUSPEND ITS DISCONTINUANCE OF THE CLASS OF CONTRACTS, THEN THE
CORPORATION SHALL PROMPTLY NOTIFY EVERY CONTRACT HOLDER, COVERED EMPLOY-
EE AND MEMBER INSURED;
  (II) THE SUPERINTENDENT SHALL REVIEW AND CONSIDER SUCH INFORMATION  AS
THE  SUPERINTENDENT  DEEMS  NECESSARY, INCLUDING THE CLAIM HISTORIES AND
PREMIUM RATES FOR EACH CONTRACT IN THE CLASS, THE HISTORICAL PROFITS AND
LOSSES FOR THE CLASS OF CONTRACTS, AND ANY OTHER INFORMATION OR ANALYSIS
THE SUPERINTENDENT DEMANDS OR DEEMS RELEVANT;
  (III) THE SUPERINTENDENT SHALL  ISSUE  A  FINAL  DETERMINATION  WITHIN
NINETY  DAYS  OF ISSUING THE ORDER OF SUSPENSION; PROVIDED, HOWEVER, THE
SUPERINTENDENT MAY EXTEND THE TIME TO ISSUE THE FINAL  DETERMINATION  IF
THE  SUPERINTENDENT EXTENDS THE ORDER OF SUSPENSION UPON GOOD CAUSE; AND
PROVIDED FURTHER THAT IF THE SUPERINTENDENT  DETERMINES  THAT  A  CORPO-
RATION  WAS  SEEKING  TO DISCONTINUE COVERAGE WITH THE INTENT OR PRETEXT
DESCRIBED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH,  THEN  THE  CORPORATION
SHALL  NOT  DISCONTINUE THE CLASS OF CONTRACTS AND SHALL PROMPTLY NOTIFY
EVERY CONTRACT HOLDER, COVERED EMPLOYEE AND MEMBER INSURED; AND
  (IV) THE SUPERINTENDENT MAY HOLD A HEARING IF THE SUPERINTENDENT DEEMS
IT NECESSARY AND SHALL HOLD A HEARING  IF  THE  CORPORATION  REQUESTS  A
HEARING  AT ANY TIME BEFORE THE SUPERINTENDENT ISSUES THE FINAL DETERMI-
NATION.

A. 9243--A                          6

  (C) WHERE A CORPORATION DISCONTINUES A PARTICULAR CLASS  OF  GROUP  OR
BLANKET  CONTRACT  OF  HOSPITAL,  SURGICAL  OR MEDICAL EXPENSE INSURANCE
OFFERED IN THE SMALL OR LARGE GROUP MARKET, OTHER  THAN  IN  THE  MANNER
PRESCRIBED  BY SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE CORPORATION SHALL
BE  LIABLE  TO  THE  FORMER  CONTRACT HOLDER OR TO THE COVERED EMPLOYEE,
MEMBER INSURED, DEPENDENT OR TO THE  ESTATE  THEREOF,  FOR  COMPENSATORY
DAMAGES  ARISING  FROM  SUCH  UNLAWFUL  DISCONTINUANCE,  PLUS  COSTS AND
REASONABLE ATTORNEYS' FEES, IN AN ACTION COMMENCED  NO  LATER  THAN  TWO
YEARS  AFTER  THE  DATE  OF SUCH DISCONTINUANCE. IN ANY SUCH ACTION, THE
COURT MAY GRANT SUCH INJUNCTIVE RELIEF AS THE COURT MAY DEEM PROPER.
  (D) In any case in which a corporation elects to discontinue  offering
all  hospital,  surgical and medical expense coverage in the small group
market or the large group market, or both markets, in this state, health
insurance coverage may be discontinued by the corporation only if:
  (i) the corporation provides written notice to the superintendent  and
to  each  contract  holder  (and  [participants  and  beneficiaries] ALL
EMPLOYEES AND MEMBER INSUREDS  covered  under  such  coverage)  of  such
discontinuance at least one hundred eighty days prior to the date of the
discontinuance of such coverage;
  (ii)  all  hospital,  surgical  and medical expense coverage issued or
delivered for issuance in this  state  in  such  market  or  markets  is
discontinued and coverage under such contracts in such market or markets
is not renewed; and
  (iii)  in  addition to the notice to the superintendent referred to in
item (i) of this subparagraph, the corporation must provide  the  super-
intendent  with  a  written plan to minimize potential disruption in the
marketplace occasioned by its withdrawal from the market.
  [(C)] (E) In the case of a discontinuance under subparagraph [(B)] (D)
of this paragraph in a market, the corporation may not provide  for  the
issuance  of  any  group  or  blanket  contract of hospital, surgical or
medical expense insurance in that market in this state during the  five-
year  period  beginning  on  the  date of the discontinuance of the last
health insurance contract not so renewed.
  (F) IF A CORPORATION DECIDES OR ELECTS TO DISCONTINUE OFFERING  COVER-
AGE  PURSUANT  TO  SUBPARAGRAPH  (A)  OR (D) OF THIS PARAGRAPH, THEN THE
CORPORATION SHALL PROVIDE AN EXTENDED BENEFIT DURING  TOTAL  DISABILITY,
WITH  RESPECT TO THE SICKNESS, INJURY OR PREGNANCY THAT CAUSED THE DISA-
BILITY, OF AT LEAST EIGHTEEN  MONTHS  SUBSEQUENT  TO  DISCONTINUANCE  OF
INSURANCE  UNLESS  SIMILAR COVERAGE IS AFFORDED FOR THE TOTAL DISABILITY
UNDER ANOTHER GROUP OR BLANKET CONTRACT.
  S 4. This act shall take effect on the first of January next  succeed-
ing  the date on which it shall have become a law and shall apply to all
policies and contracts issued, renewed, modified, altered or amended  on
or after such effective date.