S T A T E   O F   N E W   Y O R K
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                                 6949--A
    Cal. No. 682

                            I N  S E N A T E

                              March 1, 2010
                               ___________

Introduced by Sens. BRESLIN, THOMPSON -- read twice and ordered printed,
  and  when  printed  to  be  committed to the Committee on Insurance --
  reported favorably from said committee, ordered to  first  and  second
  report,  ordered  to  a  third reading, amended and ordered reprinted,
  retaining its place in the order of third reading

AN ACT to amend the insurance law, in relation to authorizing the  issu-
  ance  of  group  policies for service providers listed in a commercial
  directory

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

  Section  1.  The insurance law is amended by adding a new section 3453
to read as follows:
  S 3453. GROUP POLICY FOR SERVICE  PROVIDERS  LISTED  IN  A  COMMERCIAL
DIRECTORY.  (A)  FOR PURPOSES OF THIS SECTION, THE FOLLOWING DEFINITIONS
SHALL APPLY:
  (1) "COMMERCIAL DIRECTORY" MEANS ANY LISTING OF BUSINESSES IN PRINT OR
ELECTRONIC FORM THAT IS ISSUED BY AN ENTITY THAT  PUBLISHES  BOTH  WHITE
AND YELLOW PAGE DIRECTORIES.
  (2)  "GROUP MEMBER" MEANS A SERVICE PROVIDER THAT IS INSURED UNDER THE
GROUP POLICY.
  (3) "GROUP POLICYHOLDER" MEANS AN  ENTITY  THAT  PUBLISHES  COMMERCIAL
DIRECTORIES.
  (4)  "SERVICE PROVIDER" MEANS ANY INDIVIDUAL OR BUSINESS ENTITY WHO IS
LISTED IN A COMMERCIAL DIRECTORY; PURCHASES ADVERTISING SERVICES FROM  A
PUBLISHER  OF  A  COMMERCIAL  DIRECTORY;  AND  PROVIDES CERTAIN TYPES OF
SERVICES AS SPECIFIED BY THE PUBLISHER OF THE COMMERCIAL DIRECTORY.
  (B) A GROUP POLICY MAY BE ISSUED OR ISSUED FOR DELIVERY IN THIS  STATE
TO  A  GROUP POLICYHOLDER ONLY IN ACCORDANCE WITH THE PROVISIONS OF THIS
SECTION.
  (C) COVERAGE UNDER A GROUP POLICY SHALL EXTEND ONLY TO SERVICE PROVID-
ERS, AND SHALL BE ASSOCIATED WITH THE PERFORMANCE OF  CONTRACTS  ENTERED
INTO BY SERVICE PROVIDERS.
  (D)  A  GROUP  POLICY  MAY  PROVIDE COVERAGE FOR THE KIND OF INSURANCE
AUTHORIZED BY PARAGRAPH SIXTEEN OF SUBSECTION (A) OF SECTION  ONE  THOU-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD16197-03-0

S. 6949--A                          2

SAND  ONE  HUNDRED  THIRTEEN OF THIS CHAPTER, AND THE AMOUNT OF COVERAGE
SHALL NOT EXCEED FIVE THOUSAND DOLLARS FOR EACH CONTRACT  GUARANTEED  BY
THE COVERAGE.
  (E)  THE  PREMIUM FOR THE GROUP POLICY, INCLUDING CERTIFICATES, MAY BE
PAID BY THE GROUP POLICYHOLDER FROM THE FUNDS CONTRIBUTED:
  (1) WHOLLY BY THE GROUP POLICYHOLDER;
  (2) WHOLLY BY THE GROUP MEMBERS; OR
  (3) JOINTLY BY THE GROUP POLICYHOLDER AND THE GROUP MEMBERS.
  (F)(1) A GROUP POLICY, INCLUDING CERTIFICATES, ON WHICH ALL OR PART OF
THE PREMIUM IS TO BE DERIVED FROM FUNDS CONTRIBUTED BY THE GROUP MEMBERS
SPECIFICALLY FOR THEIR INSURANCE MAY BE PLACED  IN  FORCE  ONLY  IF  THE
GROUP  POLICY  INSURES  NOT LESS THAN FIFTY PERCENT OF THE THEN ELIGIBLE
SERVICE PROVIDERS, OR, IF LESS, ONE HUNDRED OR  MORE  OF  SUCH  ELIGIBLE
SERVICE PROVIDERS EXCLUDING ANY AS TO WHOM EVIDENCE OF INDIVIDUAL INSUR-
ABILITY  IS  NOT  SATISFACTORY TO THE INSURER. A GROUP POLICY, INCLUDING
CERTIFICATES, ON WHICH NO PART OF THE PREMIUM  IS  TO  BE  DERIVED  FROM
FUNDS  CONTRIBUTED BY THE GROUP MEMBERS SPECIFICALLY FOR THEIR INSURANCE
MUST INSURE ALL ELIGIBLE SERVICE PROVIDERS, EXCLUDING  ANY  AS  TO  WHOM
EVIDENCE OF INDIVIDUAL INSURABILITY IS NOT SATISFACTORY TO THE INSURER.
  (2) THE GROUP POLICY SHALL INSURE AT LEAST ONE HUNDRED SERVICE PROVID-
ERS  AT  DATE  OF  ISSUE,  EXCEPT  THAT  IF PART OF THE PREMIUM IS TO BE
DERIVED FROM FUNDS TO BE CONTRIBUTED BY THE GROUP  MEMBERS  SPECIFICALLY
FOR  THEIR  INSURANCE,  THEN  THE GROUP POLICY SHALL INSURE AT LEAST TWO
HUNDRED SERVICE PROVIDERS AT DATE OF ISSUE.
  (G) (1) ANY POLICY DIVIDEND, RETROSPECTIVE PREMIUM CREDIT,  OR  RETRO-
SPECTIVE PREMIUM REFUND IN RESPECT OF PREMIUMS PAID BY THE GROUP POLICY-
HOLDER MAY:
  (A) BE APPLIED TO REDUCE THE PREMIUM CONTRIBUTION OF THE GROUP POLICY-
HOLDER, BUT NOT IN EXCESS OF THE PROPORTION TO ITS CONTRIBUTION; OR
  (B) BE RETAINED BY THE GROUP POLICYHOLDER.
  (2)  ANY  POLICY DIVIDEND, RETROSPECTIVE PREMIUM CREDIT, OR RETROSPEC-
TIVE  PREMIUM  REFUND  NOT  DISTRIBUTED  UNDER  PARAGRAPH  ONE  OF  THIS
SUBSECTION SHALL BE:
  (A)  APPLIED  TO  REDUCE  FUTURE  PREMIUMS  AND,  ACCORDINGLY,  FUTURE
CONTRIBUTIONS, OF EXISTING OR FUTURE GROUP MEMBERS, OR BOTH; OR
  (B) PAID OR REFUNDED TO THOSE 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 REQUIREMENTS:
  (I) THE INSURER SHALL BE RESPONSIBLE FOR DETERMINING THE ALLOCATION OF
THE PAYMENT OR REFUND TO THE 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.
  (3)  NOTWITHSTANDING  PARAGRAPHS  ONE AND TWO OF THIS SUBSECTION, IF A
DIVIDEND ACCRUES UPON TERMINATION OF COVERAGE UNDER A GROUP POLICY,  THE
PREMIUM  FOR  WHICH  WAS  PAID OUT OF FUNDS CONTRIBUTED BY GROUP MEMBERS
SPECIFICALLY FOR THE COVERAGE,  THEN  THE  DIVIDEND  SHALL  BE  PAID  OR
REFUNDED  BY  THE GROUP POLICYHOLDER TO THE GROUP MEMBERS INSURED ON THE
DATE THE PAYMENT OR REFUND IS MADE TO  THE  GROUP  POLICYHOLDER  NET  OF
REASONABLE  EXPENSES  INCURRED  BY  THE  GROUP POLICYHOLDER IN PAYING OR
REFUNDING THE DIVIDEND TO SUCH GROUP MEMBERS.

S. 6949--A                          3

  (4) FOR THE PURPOSES OF THIS SUBSECTION, "DIVIDEND" MEANS A RETURN  BY
AN INSURER TO A GROUP POLICYHOLDER OF EXCESS PREMIUMS PAID BY THAT GROUP
POLICYHOLDER IN LIGHT OF FAVORABLE LOSS EXPERIENCE, INCLUDING RETROSPEC-
TIVE  PREMIUM  CREDITS OR RETROSPECTIVE PREMIUM REFUNDS. THE TERM "DIVI-
DEND"  DOES NOT INCLUDE REIMBURSEMENTS OR FEES RECEIVED BY A GROUP POLI-
CYHOLDER IN CONNECTION WITH THE OPERATION OR ADMINISTRATION OF  A  GROUP
POLICY,  INCLUDING  ADMINISTRATIVE  REIMBURSEMENTS,  FEES  FOR  SERVICES
PROVIDED BY THE GROUP POLICYHOLDER, OR TRANSACTIONAL SERVICE FEES.
  (H) THE INSURER MUST TREAT IN LIKE MANNER ALL ELIGIBLE  GROUP  MEMBERS
OF THE SAME CLASS AND STATUS.
  (I)  A GROUP POLICY OR CERTIFICATE SHALL NOT BE ELIGIBLE FOR PLACEMENT
BY AN EXCESS LINE BROKER LICENSED PURSUANT TO ARTICLE TWENTY-ONE OF THIS
CHAPTER.
  (J)(1) THE INSURER SHALL BE RESPONSIBLE FOR THE MAILING OR DELIVERY OF
A CERTIFICATE OF INSURANCE TO EACH GROUP MEMBER. THE INSURER ALSO  SHALL
BE  RESPONSIBLE  FOR  THE MAILING OR DELIVERY TO EACH GROUP MEMBER OF AN
AMENDED CERTIFICATE OF INSURANCE, OR  ENDORSEMENT  TO  THE  CERTIFICATE,
WHENEVER  THERE IS A CHANGE OF LIMITS; CHANGE IN TYPE OF COVERAGE; ADDI-
TION, REDUCTION, OR ELIMINATION OF COVERAGE; OR ADDITION  OF  EXCLUSION,
UNDER THE GROUP POLICY OR CERTIFICATE.
  (2)  THE CERTIFICATE SHALL CONTAIN IN SUBSTANCE ALL MATERIAL TERMS AND
CONDITIONS OF COVERAGE AFFORDED TO THE GROUP MEMBER,  UNLESS  THE  GROUP
POLICY  IS  INCORPORATED  BY  REFERENCE  AND  A COPY OF THE GROUP POLICY
ACCOMPANIES THE CERTIFICATE.
  (3) IF COVERAGE AFFORDED TO THE GROUP MEMBER IS  IN  EXCESS  OF  OTHER
APPLICABLE  INSURANCE  COVERAGE,  THEN  THE  CERTIFICATE SHALL CONTAIN A
NOTICE ADVISING THE GROUP MEMBER THAT IF THE MEMBER HAS OTHER  INSURANCE
COVERAGE, SPECIFIED COVERAGES UNDER THE GROUP POLICY WILL BE EXCESS OVER
THE OTHER INSURANCE.
  (K)  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  AGENT OR BROKER, IN ANY ADVERTISEMENT, SIGN, PAMPHLET, CIRCULAR,
CARD, OR OTHER PUBLIC ANNOUNCEMENT REFERRING TO COVERAGE UNDER  A  GROUP
POLICY OR CERTIFICATE.
  (L)  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)(A) AN INSURER MAY TERMINATE A GROUP POLICY OR CERTIFICATE ONLY  IF
CANCELLATION IS BASED ON ONE OR MORE OF THE REASONS SET FORTH IN SUBPAR-
AGRAPHS  (A)  THROUGH  (D)  OR  (F)  THROUGH  (H)  OF  PARAGRAPH  ONE OF
SUBSECTION (C) OF SECTION THREE THOUSAND FOUR HUNDRED TWENTY-SIX OF THIS
ARTICLE; PROVIDED, HOWEVER, THAT AN ACT OR OMISSION BY  A  GROUP  MEMBER
THAT  WOULD  CONSTITUTE  THE  BASIS  FOR  CANCELLATION  OF AN INDIVIDUAL
CERTIFICATE SHALL NOT CONSTITUTE THE BASIS FOR CANCELLATION OF THE GROUP
POLICY.
  (B) WHERE THE PREMIUM IS DERIVED WHOLLY FROM FUNDS CONTRIBUTED BY  THE
GROUP POLICYHOLDER, AN INSURER MAY CANCEL AN INDIVIDUAL CERTIFICATE ONLY
IF  CANCELLATION  IS  BASED  ON  ONE OR MORE OF THE REASONS SET FORTH IN
SUBPARAGRAPH (B), (C) OR (H) OF  PARAGRAPH  ONE  OF  SUBSECTION  (C)  OF
SECTION THREE THOUSAND FOUR HUNDRED TWENTY-SIX OF THIS ARTICLE.
  (2)(A)  AN  INSURER'S  CANCELLATION  OF  A GROUP POLICY, INCLUDING ALL
CERTIFICATES, SHALL NOT BECOME EFFECTIVE UNTIL FIFTEEN  DAYS  AFTER  THE
INSURER  MAILS  OR  DELIVERS WRITTEN NOTICE OF CANCELLATION TO THE GROUP
POLICYHOLDER AT THE MAILING ADDRESS SHOWN IN THE POLICY.

S. 6949--A                          4

  (I) WHERE ALL OR PART OF THE PREMIUM IS DERIVED FROM FUNDS CONTRIBUTED
BY THE GROUP MEMBER SPECIFICALLY FOR  THE  COVERAGE,  THE  INSURER  ALSO
SHALL MAIL OR DELIVER WRITTEN NOTICE OF CANCELLATION OF THE GROUP POLICY
TO THE GROUP MEMBER AT THE GROUP MEMBER'S MAILING ADDRESS.
  (II)  WHERE NONE OF THE PREMIUM IS DERIVED FROM FUNDS CONTRIBUTED BY A
GROUP MEMBER SPECIFICALLY FOR THE COVERAGE, THE GROUP POLICYHOLDER SHALL
MAIL OR DELIVER WRITTEN NOTICE TO THE GROUP MEMBER  ADVISING  THE  GROUP
MEMBER OF THE CANCELLATION OF THE ACCOUNT GROUP POLICY AND THE EFFECTIVE
DATE  OF  CANCELLATION. THE GROUP POLICYHOLDER SHALL MAIL OR DELIVER THE
WRITTEN NOTICE WITHIN NINETY DAYS AFTER RECEIVING NOTICE OF CANCELLATION
FROM THE INSURER.
  (B) AN INSURER'S CANCELLATION OF AN INDIVIDUAL CERTIFICATE  SHALL  NOT
BECOME  EFFECTIVE UNTIL FIFTEEN DAYS AFTER THE INSURER MAILS OR DELIVERS
WRITTEN NOTICE OF CANCELLATION TO THE GROUP MEMBER AT THE 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  THIRTY
DAYS WRITTEN NOTICE TO THE INSURER AND EACH GROUP MEMBER; AND
  (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
GROUP  MEMBER'S MAILING ADDRESS AT LEAST THIRTY DAYS PRIOR TO THE EFFEC-
TIVE DATE OF CANCELLATION.
  (3)(A) UNLESS A 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 GROUP POLICYHOLDER SHALL BE ENTITLED TO RENEW THE GROUP POLICY
AND ALL CERTIFICATES UPON TIMELY PAYMENT OF THE PREMIUM  BILLED  TO  THE
GROUP POLICYHOLDER FOR THE RENEWAL, UNLESS:
  (I)  THE  INSURER  MAILS OR DELIVERS TO THE GROUP POLICYHOLDER AND ALL
GROUP MEMBERS WRITTEN NOTICE OF NONRENEWAL, OR CONDITIONAL RENEWAL; AND
  (II) THE INSURER MAILS OR DELIVERS THE WRITTEN NOTICE AT LEAST THIRTY,
BUT NOT MORE THAN ONE HUNDRED TWENTY DAYS PRIOR TO THE  EXPIRATION  DATE
SPECIFIED  IN  THE POLICY OR, IF NO DATE IS SPECIFIED, THE NEXT ANNIVER-
SARY DATE OF THE POLICY.
  (4) WHERE THE GROUP POLICYHOLDER NONRENEWS THE GROUP POLICY, THE GROUP
POLICYHOLDER SHALL MAIL OR DELIVER WRITTEN NOTICE TO EACH  GROUP  MEMBER
ADVISING  THE  GROUP  MEMBER  OF  NONRENEWAL OF THE GROUP POLICY AND THE
EFFECTIVE DATE OF NONRENEWAL.  THE  GROUP  POLICYHOLDER  SHALL  MAIL  OR
DELIVER WRITTEN NOTICE AT LEAST THIRTY DAYS PRIOR TO THE NONRENEWAL.
  (5)  EVERY  NOTICE OF CANCELLATION, NONRENEWAL, OR CONDITIONAL RENEWAL
SHALL SET FORTH THE SPECIFIC REASON OR REASONS FOR CANCELLATION,  NONRE-
NEWAL, OR CONDITIONAL RENEWAL.
  (6)(A)  AN INSURER SHALL NOT BE REQUIRED UNDER THIS SUBSECTION TO GIVE
NOTICE TO A GROUP MEMBER IF THE INSURER HAS BEEN ADVISED BY  EITHER  THE
GROUP  POLICYHOLDER OR ANOTHER INSURER THAT SUBSTANTIALLY SIMILAR COVER-
AGE 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 A GROUP MEMBER IF SUBSTANTIALLY SIMILAR COVERAGE HAS
BEEN OBTAINED FROM ANOTHER INSURER WITHOUT LAPSE OF COVERAGE.
  (7)(A) IF, PRIOR TO THE EFFECTIVE DATE OF CANCELLATION, NONRENEWAL, OR
CONDITIONAL RENEWAL OF THE  GROUP  POLICY,  OR  A  CERTIFICATE,  WHETHER
INITIATED  BY  THE INSURER, GROUP POLICYHOLDER OR BY THE GROUP MEMBER IN
REGARD TO THE GROUP MEMBER'S CERTIFICATE, COVERAGE ATTACHES PURSUANT  TO

S. 6949--A                          5

THE  TERMS OF A GROUP POLICY, THEN THE COVERAGE SHALL BE EFFECTIVE UNTIL
EXPIRATION OF THE APPLICABLE PERIOD OF COVERAGE PROVIDED  IN  THE  GROUP
POLICY  NOTWITHSTANDING  THE  CANCELLATION,  NONRENEWAL  OR  CONDITIONAL
NONRENEWAL OF THE GROUP POLICY.
  (B) NOTWITHSTANDING SUBPARAGRAPH (A) OF THIS PARAGRAPH, AN INSURER MAY
TERMINATE COVERAGE UNDER AN INDIVIDUAL CERTIFICATE ON THE EFFECTIVE DATE
OF  CANCELLATION, IF THE CERTIFICATE IS CANCELLED IN ACCORDANCE WITH THE
PROVISIONS OF SUBPARAGRAPH (B) OF PARAGRAPH ONE OF THIS SUBSECTION.
  (M) NOTWITHSTANDING ANY REGULATION TO THE CONTRARY,  RATES  AND  FORMS
FOR  ANY GROUP POLICY ISSUED OR ISSUED FOR DELIVERY IN THIS STATE PURSU-
ANT TO THIS SECTION SHALL BE FILED WITH THE SUPERINTENDENT IN ACCORDANCE
WITH ARTICLE TWENTY-THREE OF THIS CHAPTER.
  S 2. This act shall take effect immediately.