S T A T E O F N E W Y O R K
________________________________________________________________________
7295
2013-2014 Regular Sessions
I N A S S E M B L Y
May 10, 2013
___________
Introduced by M. of A. CAHILL -- (at request of the Department of Finan-
cial Services) -- read once and referred to the Committee on Insurance
AN ACT to amend the insurance law, in relation to the discontinuance of
a class of group or blanket policy or contract of hospital, surgical
or medical expense insurance, and in relation to a marketplace with-
drawal
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The opening paragraph of subparagraph (A) of paragraph 3 of
subsection (p) of section 3221 of the insurance law, as amended by chap-
ter 398 of the laws of 2010, is amended to read as follows:
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 AT THE TIME OF COVERAGE
RENEWAL, UNLESS THE SUPERINTENDENT DETERMINES THAT CONTINUATION OF THE
POLICY WOULD JEOPARDIZE THE INSURER'S SOLVENCY, CONTINUATION OF THE
POLICY WOULD NOT BE IN THE BEST INTERESTS OF THE POLICYHOLDERS AND
MEMBER INSUREDS OF THE INSURER OR THE PUBLIC, DISCONTINUANCE IS NECES-
SARY TO PERMIT THE INSURER TO STANDARDIZE ITS POLICY FORMS, OR ANOTHER
DATE IS NECESSARY IN ORDER TO EFFECTUATE AN ORDERLY DISCONTINUANCE; AND
only if:
S 2. Items (iii) and (iv) of subparagraph (A) of paragraph 3 of
subsection (p) of section 3221 of the insurance law, as amended by chap-
ter 398 of the laws of 2010, are amended and a new item (v) is added to
read as follows:
(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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08858-01-3
A. 7295 2
to any 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, including the reason for the 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 [para-
graph] SUBPARAGRAPH. If such notice does not include the date or dates
that the insurer mailed or delivered the notice to all policyholders,
covered [employers] EMPLOYEES and member insureds, the insurer shall
notify the superintendent of such date within seven days of the
completion of the mailing or delivery[.]; AND
(V) AS PART OF THE NOTICE TO THE SUPERINTENDENT REFERRED TO IN ITEM
(IV) OF THIS SUBPARAGRAPH, THE INSURER SHALL PROVIDE A WRITTEN PLAN THAT
IS ACCEPTABLE TO THE SUPERINTENDENT TO MINIMIZE POTENTIAL DISRUPTION IN
THE MARKETPLACE OCCASIONED BY THE INSURER'S DISCONTINUANCE OF A CLASS OF
ONE OR MORE GROUP OR BLANKET POLICIES IN THE SMALL OR LARGE GROUP
MARKET.
S 3. The opening paragraph of subparagraph (E) of paragraph 3 of
subsection (p) of section 3221 of the insurance law, as amended by chap-
ter 398 of the laws of 2010, is amended to read as follows:
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 AT THE TIME
OF COVERAGE RENEWAL, UNLESS THE SUPERINTENDENT DETERMINES THAT CONTINUA-
TION OF THE POLICY WOULD JEOPARDIZE THE INSURER'S SOLVENCY, CONTINUATION
OF THE POLICY WOULD NOT BE IN THE BEST INTERESTS OF THE POLICYHOLDERS
AND MEMBER INSUREDS OF THE INSURER OR THE PUBLIC, OR ANOTHER DATE IS
NECESSARY IN ORDER TO EFFECTUATE AN ORDERLY DISCONTINUANCE; AND ONLY if:
S 4. Item (iii) of subparagraph (E) of paragraph 3 of subsection (p)
of section 3221 of the insurance law, as amended by chapter 398 of the
laws of 2010, is amended to read as follows:
(iii) in addition to the notice to the superintendent referred to in
item (i) of this subparagraph, the insurer shall provide [the super-
intendent with] a written plan THAT IS ACCEPTABLE TO THE SUPERINTENDENT
to minimize potential disruption in the marketplace occasioned by the
insurer's withdrawal from the market.
S 5. The opening paragraph of subparagraph (A) of paragraph 3 of
subsection (j) of section 4305 of the insurance law, as amended by chap-
ter 398 of the laws of 2010, is amended to read as follows:
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 AT THE TIME OF COVERAGE
RENEWAL, UNLESS THE SUPERINTENDENT DETERMINES THAT CONTINUATION OF THE
CONTRACT WOULD JEOPARDIZE THE CORPORATION'S SOLVENCY, CONTINUATION OF
THE CONTRACT WOULD NOT BE IN THE BEST INTERESTS OF THE CONTRACTHOLDERS
AND MEMBER INSUREDS OF THE CORPORATION OR THE PUBLIC, DISCONTINUANCE IS
NECESSARY TO PERMIT THE CORPORATION TO STANDARDIZE ITS CONTRACT FORMS,
OR ANOTHER DATE IS NECESSARY IN ORDER TO EFFECTUATE AN ORDERLY DISCON-
TINUANCE; AND only if:
A. 7295 3
S 6. Items (iii) and (iv) of subparagraph (A) of paragraph 3 of
subsection (j) of section 4305 of the insurance law, as amended by chap-
ter 398 of the laws of 2010, are amended and a new item (v) is added to
read as follows:
(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 particular covered employee, member insured or dependent
who may become eligible for such coverage, 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, including the reason for the discontinuance, and
an officer or director of the corporation certifies to the superinten-
dent that the corporation has complied with items (i), (ii) and (iii) of
this [paragraph] SUBPARAGRAPH. If such notice does not include the date
or dates that the corporation mailed or delivered the notice to all
contract holders, covered [employers] EMPLOYEES and member insureds, the
corporation shall notify the superintendent of such date within seven
days of the completion of the mailing or delivery[.]; AND
(V) AS PART OF THE NOTICE TO THE SUPERINTENDENT REFERRED TO IN ITEM
(IV) OF THIS SUBPARAGRAPH, THE CORPORATION SHALL PROVIDE A WRITTEN PLAN
THAT IS ACCEPTABLE TO THE SUPERINTENDENT TO MINIMIZE POTENTIAL
DISRUPTION IN THE MARKETPLACE OCCASIONED BY THE CORPORATION'S DISCONTIN-
UANCE OF A CLASS OF ONE OR MORE GROUP OR BLANKET CONTRACTS IN THE SMALL
OR LARGE GROUP MARKET.
S 7. The opening paragraph of subparagraph (E) of paragraph 3 of
subsection (j) of section 4305 of the insurance law, as amended by chap-
ter 398 of the laws of 2010, is amended to read as follows:
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 AT THE
TIME OF COVERAGE RENEWAL, UNLESS THE SUPERINTENDENT DETERMINES THAT
CONTINUATION OF THE CONTRACT WOULD JEOPARDIZE THE CORPORATION'S SOLVEN-
CY, CONTINUATION OF THE CONTRACT WOULD NOT BE IN THE BEST INTERESTS OF
THE CONTRACTHOLDERS AND MEMBER INSUREDS OF THE CORPORATION OR THE
PUBLIC, OR ANOTHER DATE IS NECESSARY IN ORDER TO EFFECTUATE AN ORDERLY
DISCONTINUANCE; AND only if:
S 8. Item (iii) of subparagraph (E) of paragraph 3 of subsection (j)
of section 4305 of the insurance law, as amended by chapter 398 of the
laws of 2010, is amended to read as follows:
(iii) in addition to the notice to the superintendent referred to in
item (i) of this subparagraph, the corporation shall provide [the super-
intendent with] a written plan THAT IS ACCEPTABLE TO THE SUPERINTENDENT
to minimize potential disruption in the marketplace occasioned by the
corporation's withdrawal from the market.
S 9. This act shall take effect immediately.