S T A T E   O F   N E W   Y O R K
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                                   683

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced by M. of A. CAHILL, GOTTFRIED, CLARK -- Multi-Sponsored by --
  M. of A.  ENGLEBRIGHT, ESPAILLAT, GREENE, HOOPER, JACOBS, JOHN, McENE-
  NY, SWEENEY -- 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.
              

                                                           LBD00579-01-9

A. 683                              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.
  S  2.  Subsection (a) of section 2324 of the insurance law, as amended
by chapter 482 of the laws of 2000, 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 article of merchandise not exceeding fifteen
dollars in value which shall have conspicuously stamped or printed ther-
eon the advertisement of the insurer, agent or broker,  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 underwriting 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.
  S 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. 683                              3

PENALTIES PROVIDED BY LAW, PAY A FINE IN THE SUM OF ONE THOUSAND DOLLARS
FOR EACH SUCH VIOLATION.
  S  4.  Subsection (c) of section 4224 of the insurance law, as amended
by chapter 592 of the laws of 2008, is amended to read as follows:
  (c) (1) Except as permitted by  section  three  thousand  two  hundred
thirty-nine  of this chapter, no such life insurance company and no such
savings and insurance bank and no officer, agent, solicitor or represen-
tative thereof and no such insurer doing in this state the  business  of
accident and health insurance and no officer, agent, solicitor or repre-
sentative  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 insurance, 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; 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 whatever 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.
  S  5.  Section  4224  of  the insurance law is amended by adding a new
subsection (f) to read as follows:
  (F) 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.
  S  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.