senate Bill S531

2013-2014 Legislative Session

Allows third party notification by insurance carriers in regard to long term care policies

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to insurance
Jan 09, 2013 referred to insurance

S531 - Bill Details

See Assembly Version of this Bill:
A1154
Current Committee:
Law Section:
Insurance Law
Laws Affected:
Amd ยงยง3111, 2324 & 4224, Ins L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S6935, A168
2009-2010: A683

S531 - Bill Texts

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Allows third party notification by insurance carriers in regard to long term care policies; further prohibits the inclusion of certain goods/services in the sale of insurance policies without consent and provides penalty for a violation of this prohibition.

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BILL NUMBER:S531

TITLE OF BILL:
An act
to amend the insurance law, in relation to third party notification 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

PURPOSE OR GENERAL IDEA OF BILL:
This bill would require a long-term
care insurance carrier to permit senior citizen policy holders to
designate a party to which the insurer would transmit notices of
premiums due and notices of cancellation. The bill would also
prohibit any insurer from including any other insurance policy or
product without obtaining the informed consent of the insured.
Penalty for such a practice would be one thousand dollars for each
violation.

SUMMARY OF SPECIFIC PROVISIONS:
Subsection (f) of section 3111 of the
insurance law is re-lettered subsection (g) and a new subsection (f)
is added to provide for third-party notification option for senior
citizens.

Subsection (a) of section 2324 and subsection (c) of section 4224 of
the insurance law are amended to prohibit any insurer from including
any other insurance policy or product without obtaining the informed
consent of the insured.

Subsection (f) of section 2324 is amended and a new subsection (f) is
added to section 4224 of the insurance law to provide the one
thousand dollar penalty for the above practice.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
Existing insurance
law does not require long-term care insurance carriers to allow
senior citizens the option of third-party notification, nor does it
prohibit the inclusion of additional policies or products in the sale
of a specific policy.

JUSTIFICATION:
Under certain circumstances
unascribable to their own
negligence, a senior may be unable to address his or her billings or
other notices in a timely fashion. Affording senior citizens the
option of selecting.a third party to receive such notices would
provide an adequate measure against certain notification procedures
and other practices allowed under existing insurance law.

LEGISLATIVE HISTORY:
2011-12: S.6935/A.168 Referred to Insurance

FISCAL IMPLICATIONS:


None.

EFFECTIVE DATE:
Immediately, except that section one of this act shall
take effect on the first 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.

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

                                   531

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen. KENNEDY -- 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 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
INSURED  DESIRE  TO  TERMINATE  THE THIRD PARTY DESIGNATION, THE INSURED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02431-01-3

S. 531                              2

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 291 of the laws of 2012, 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 valuable consideration, including but not
limited to merchandise or periodical subscriptions, not exceeding  twen-
ty-five  dollars  in value, 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 under-
writing 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

S. 531                              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 291 of the laws of 2012, 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 other than any valuable consideration, including
but not limited to merchandise or periodical subscriptions, not  exceed-
ing  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 consid-
eration 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.

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