S T A T E   O F   N E W   Y O R K
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                                  2799

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 21, 2009
                               ___________

Introduced by M. of A. O'DONNELL -- Multi-Sponsored by -- M. of A. ALFA-
  NO,  PHEFFER,  WALKER  --  read  once and referred to the Committee on
  Insurance

AN ACT to amend the insurance law, in relation to prohibiting misleading
  statements regarding benefit maximums  and  limitations  of  benefits,
  either  orally  or  in writing and requiring such benefit maximums and
  limitations to be stated in clear and plain language in the  insurance
  contract or certificate

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

  Section 1. Paragraph 1 of subsection (a) of section 2123 of the insur-
ance law, as amended by chapter 540 of the laws of 1996, is  amended  to
read as follows:
  (1)  No  agent  or representative of any insurer or health maintenance
organization authorized to transact life, accident or  health  insurance
or  health maintenance organization business in this state and no insur-
ance broker, and no other  person,  firm,  association  or  corporation,
shall  issue or circulate or cause or permit to be issued or circulated,
any illustration, circular, statement or memorandum misrepresenting  the
terms,  benefits  or advantages of any policy or contract of life, acci-
dent or health insurance, any annuity contract or any health maintenance
organization contract, delivered or issued for delivery or to be  deliv-
ered or issued for delivery, in this state, OR SHALL MAKE ANY MISLEADING
STATEMENT ORALLY OR IN WRITING AS TO THE TERMS OF COVERAGE OF SUCH POLI-
CY  INCLUDING  BUT  NOT  LIMITED  TO BENEFIT MAXIMUMS AND LIMITATIONS OF
BENEFITS, or shall make any misleading estimate as to the  dividends  or
share  of  surplus or additional amounts to be received in the future on
such policy or contract, or shall make any false or misleading statement
as to the dividends or share of surplus or additional amounts previously
paid by any such insurer or health maintenance organization  on  similar
policies  or  contracts, or shall make any misleading representation, or

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD00083-01-9
              

A. 2799                             2

any misrepresentation, as to the financial condition of any such insurer
or health maintenance organization, or as to the  legal  reserve  system
upon which such insurer or health maintenance organization operates.
  S  2. Paragraph 1 of subsection (a) of section 3217-a of the insurance
law, as added by chapter 705 of the laws of 1996, is amended to read  as
follows:
  (1)  a description of coverage provisions; health care benefits; bene-
fit maximums, including benefit limitations, AND ANY SUCH BENEFIT  MAXI-
MUMS  AND LIMITATIONS SHALL BE DESCRIBED IN CLEAR AND PLAIN LANGUAGE AND
PRINTED IN A FONT SIZE AND TYPE STYLE TO MAKE THEM  CLEARLY  VISIBLE  TO
THE  CONSUMER;  and  exclusions of coverage, including the definition of
medical necessity used in determining whether benefits will be covered;
  S 3. This act shall take effect immediately;  provided,  however  that
section  two  of this act shall take effect on the one hundred eightieth
day after it shall have become a law.