senate Bill S6812A

Signed By Governor
2011-2012 Legislative Session

Relates to anti-rebating provisions for insurers

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Archive: Last Bill Status Via A9702 - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Aug 01, 2012 signed chap.291
Jul 20, 2012 delivered to governor
Jun 04, 2012 returned to assembly
passed senate
3rd reading cal.841
substituted for s6812a
Jun 04, 2012 substituted by a9702a
May 23, 2012 advanced to third reading
May 22, 2012 2nd report cal.
May 21, 2012 1st report cal.841
May 16, 2012 print number 6812a
amend and recommit to insurance
Mar 23, 2012 referred to insurance

Votes

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Bill Amendments

Original
A (Active)
Original
A (Active)

S6812 - Bill Details

See Assembly Version of this Bill:
A9702A
Law Section:
Insurance Law
Laws Affected:
Amd §§2324 & 4224, Ins L

S6812 - Bill Texts

view summary

Provides that an insurer may offer valuable consideration, including merchandise or periodical subscriptions of a value of $25 or less to an insured.

view sponsor memo
BILL NUMBER:S6812

TITLE OF BILL:
An act
to amend the insurance law, in relation to anti-rebating provisions for
insurers

PURPOSE:
The purpose of this bill is to permit property and casualty companies,
agents, and brokers to provide merchandise or other considerations
with a value not to exceed twenty five dollars during the insurance
sales process to an applicant for insurance. This bill also removes a
restriction that the merchandise be promotional in nature and would
create a cost of living inflation provision that would allow for the
periodic adjustment of the monetary amount for the allowable gift of
merchandise. This adjustment would be tied to the rate of inflation.

SUMMARY OF PROVISIONS:
This bill amends subsection (a) of section 2324 of the insurance law
as amended by chapter 482 of the laws of 2000, and amends section
2324 of the insurance law by adding a new subsection (g). This bill
also amends subsection (c) of section 4224 of the insurance law as
amended by chapter 592 of the laws of 2008.

JUSTIFICATION:
Sections 2324 and 4424 of the insurance law restrict insurers and
agents from providing anything of value to applicants for insurance,
beyond that which is provided for in the insurance contract. These
sections, referred to as the anti-rebating statutes, were established
to keep insurers and agents from offering valuable items not related
to the insurance contract as incentives for an applicant to purchase
a policy. Many years ago, the legislature recognized the need for an
exception to this section for items of minimal value that insurers or
agents might choose to offer to potential customers during the sales
process and amended the law to provide for an exception for items
with a value of fifteen dollars or less.

This bill would update that amount once again to reflect the cost of
inflation since 2000, extend the exception to include the life
insurance sales process, and provide for an automatic escalation in
the permissible gift amount to reflect future inflation in the value
of the permissible exceptions to the statute. In addition, this
legislation would incentivize the establishment and active operation
of safety committees for insureds by authorizing a property/casualty
insurer to offer recognition awards or incentives, which would
include plaques, gift cards, or donations toward purchase of new
equipment, as a means of rewarding the safety committee for
improvements.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
This act shall take effect immediately.

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

                                  6812

                            I N  S E N A T E

                             March 23, 2012
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT  to  amend  the  insurance  law,  in  relation  to  anti-rebating
  provisions for insurers

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

  Section 1. 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) 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 advan-
tage 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] VALUABLE CONSIDERATION, INCLUDING
BUT NOT LIMITED TO merchandise OR PERIODICAL SUBSCRIPTIONS, not  exceed-
ing  [fifteen]  TWENTY-FIVE dollars in value [which shall have conspicu-
ously stamped or printed thereon 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  divi-
dends  or  profits  accrued thereon, nor shall the insured, his 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 own property  or  risks,  if

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15149-01-2

S. 6812                             2

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.    THE  EXCEPTION PROVIDED HEREIN FOR ITEMS OF VALUE NOT EXCEEDING
TWENTY-FIVE DOLLARS SHALL BE ADJUSTED ANNUALLY  BY  THE  SUPERINTENDENT,
BASED  ON THE INCREASE IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUM-
ERS, PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR  THE
MOST  RECENT  ONE-YEAR  PERIOD ENDING ON DECEMBER THIRTY-FIRST PRECEDING
THE ADJUSTMENT BEGINNING ON NOVEMBER FIRST, TWO THOUSAND THIRTEEN.
  S 2. Section 2324 of the insurance law is  amended  by  adding  a  new
subsection (g) to read as follows:
  (G)  THE  PROVISIONS  OF  SUBSECTION  (A)  OF  THIS  SECTION SHALL NOT
PRECLUDE AN INSURER FROM OFFERING RECOGNITION AWARDS OR INCENTIVES TO  A
SAFETY  COMMITTEE  OF  THE  INSURED.  THE AWARD OR INCENTIVE SHALL BE IN
RECOGNITION  OF  A  SAFETY  COMMITTEE'S  ACHIEVEMENT  IN  IMPROVING  THE
INSURED'S  SAFETY  RECORD  AND  SHALL NOT EXCEED FIVE HUNDRED DOLLARS IN
VALUE. A WRITTEN REPORT OF EVERY SUCH AWARD OR INCENTIVE SHALL  BE  MADE
AVAILABLE TO THE SUPERINTENDENT.
  S  3.  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) 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 representative
thereof 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
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 acci-
dent  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 OTHER THAN ANY VALUABLE CONSIDERATION, INCLUDING BUT NOT LIMIT-
ED TO MERCHANDISE OR PERIODICAL SUBSCRIPTIONS, NOT EXCEEDING TWENTY-FIVE
DOLLARS IN VALUE; 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.
THE  EXCEPTION  PROVIDED  HEREIN  FOR  ITEMS  OF  VALUE  NOT   EXCEEDING
TWENTY-FIVE  DOLLARS  SHALL  BE ADJUSTED ANNUALLY BY THE SUPERINTENDENT,
BASED ON THE INCREASE IN THE CONSUMER PRICE INDEX FOR ALL URBAN  CONSUM-
ERS,  PUBLISHED BY THE UNITED STATES BUREAU OF LABOR STATISTICS, FOR THE
MOST RECENT ONE-YEAR PERIOD ENDING ON  DECEMBER  THIRTY-FIRST  PRECEDING
THE ADJUSTMENT BEGINNING ON NOVEMBER FIRST, TWO THOUSAND THIRTEEN.
  S 4. This act shall take effect immediately.

S6812A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A9702A
Law Section:
Insurance Law
Laws Affected:
Amd §§2324 & 4224, Ins L

S6812A (ACTIVE) - Bill Texts

view summary

Provides that an insurer may offer valuable consideration, including merchandise or periodical subscriptions of a value of $25 or less to an insured.

view sponsor memo
BILL NUMBER:S6812A

TITLE OF BILL:
An act
to amend the insurance law, in relation to anti-rebating provisions for
insurers

PURPOSE:
The purpose of this bill is to permit property and casualty
companies, agents, and brokers to provide merchandise or other
considerations with a value not to exceed twenty five dollars during
the insurance sales process to an applicant for insurance. This bill
also removes a restriction that the merchandise be promotional in
nature.

SUMMARY OF PROVISIONS:
This bill amends subsection (a) of section 2324
of the insurance law as amended by chapter 482 of the laws of 2000,
and amends section 2324 of the insurance law by adding a new
subsection (g). This bill also amends subsection (c) of section 4224
of the insurance law as amended by chapter 592 of the laws of 2008.

JUSTIFICATION:
Sections 2324 and 4424 of the insurance law restrict
insurers and agents from providing anything of value to applicants
for insurance, beyond that which is provided for in the insurance
contract. These sections, referred to as the anti-rebating statutes,
were established to keep insurers and agents from offering valuable
items not related to the insurance contract as incentives for an
applicant to purchase a policy. Many years ago, the legislature
recognized the need for an exception to this section for items of
minimal value that insurers or agents might choose to offer to
potential customers during the sales process and amended the law to
provide for an exception for items with a value of fifteen dollars or
less. This bill would update that amount once again to reflect the
cost of inflation since 2000 and extend the exception to include the
life insurance sales process.

LEGISLATIVE HISTORY:
This is a new bill.

FISCAL IMPLICATIONS:
None to State.

EFFECTIVE DATE:
This act shall take effect immediately.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 6812--A

                            I N  S E N A T E

                             March 23, 2012
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee  on  Insurance  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the  insurance  law,  in  relation  to anti-rebating
  provisions for insurers

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

  Section  1.  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)  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 advan-
tage  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] VALUABLE CONSIDERATION,  INCLUDING
BUT  NOT LIMITED TO merchandise OR PERIODICAL SUBSCRIPTIONS, not exceed-
ing [fifteen] TWENTY-FIVE dollars in value [which shall  have  conspicu-
ously stamped or printed thereon 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 divi-
dends or profits accrued thereon, nor shall the insured,  his  agent  or
representative knowingly receive directly or indirectly, any such rebate
or  special  favor or advantage, provided, however, a licensed insurance

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15149-03-2

S. 6812--A                          2

agent or a licensed insurance broker may retain the usual commission  or
underwriting  fee  on  insurance placed on his 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.
  S 2.  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)  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  representative
thereof 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
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 acci-
dent 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 OTHER THAN ANY VALUABLE CONSIDERATION, INCLUDING BUT NOT LIMIT-
ED TO MERCHANDISE OR PERIODICAL SUBSCRIPTIONS, NOT EXCEEDING TWENTY-FIVE
DOLLARS  IN  VALUE; 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.
  S 3. This act shall take effect immediately.

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