Senate Bill S7300

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

                                  7300

                            I N  S E N A T E

                               May 9, 2014
                               ___________

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 standards for  prompt,
  fair  and equitable payments of insurance commissions or other compen-
  sation arrangements

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

  Section  1.  Subsection  (d)  of section 2119 of the insurance law, as
amended by chapter 687 of the laws  of  2003,  is  amended  to  read  as
follows:
  (d) (1) No insurance broker shall, in connection with the sale, solic-
itation  or negotiation, issuance, delivery or transfer in this state of
any contract of insurance made or negotiated in this state, directly  or
indirectly  charge,  or receive from, the insured or prospective insured
therein any greater sum than the rate of premium fixed therefor  by  the
insurer  obligated  as  such  therein, unless such broker has a right to
compensation for services created in the manner specified in  subsection
(c) of this section.
  (2)  THE  PROVISIONS  OF  THIS SECTION SHALL APPLY TO ANY PLACEMENT OF
HEALTH INSURANCE COVERAGE BY AN  INSURANCE  BROKER  UNDER  CONTRACTS  OR
AGREEMENTS  ISSUED OR ENTERED INTO PURSUANT TO THIS ARTICLE AND ARTICLES
FORTY-TWO, FORTY-THREE AND  FORTY-SEVEN  OF  THIS  CHAPTER  AND  ARTICLE
FORTY-FOUR  OF  THE  PUBLIC  HEALTH  LAW, INSIDE OR OUTSIDE THE NEW YORK
HEALTH BENEFIT EXCHANGE ESTABLISHED UNDER GOVERNOR'S EXECUTIVE ORDER NO.
42 (2012) TO IMPLEMENT APPLICABLE  PROVISIONS  OF  THE  FEDERAL  PATIENT
PROTECTION  AND  AFFORDABLE CARE ACT, PUBLIC LAW 111-148 (42 USC S 18001
ET SEQ. (2010)).
  S 2. The insurance law is amended by adding a new  section  3224-d  to
read as follows:
  S  3224-D. STANDARDS FOR PROMPT, FAIR AND EQUITABLE PAYMENTS OF INSUR-
ANCE COMMISSIONS OR OTHER COMPENSATION ARRANGEMENTS. NOTWITHSTANDING ANY
OTHER PROVISIONS OF THIS CHAPTER OR ANY OTHER GENERAL OR SPECIAL LAW  TO
THE  CONTRARY,  THIS SECTION IS INTENDED TO PROVIDE FOR PROMPT, FAIR AND
EQUITABLE  PAYMENTS  OF  INSURANCE  COMMISSIONS  OR  OTHER  COMPENSATION

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

                                                           LBD15058-01-4

S. 7300                             2

ARRANGEMENTS  TO  HEALTH  INSURANCE  PRODUCERS  FOR  PLACEMENT OF HEALTH
INSURANCE COVERAGE UNDER CONTRACTS OR AGREEMENTS ISSUED OR ENTERED  INTO
PURSUANT  TO THIS ARTICLE AND ARTICLES FORTY-TWO, FORTY-THREE AND FORTY-
SEVEN  OF  THIS CHAPTER AND ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW,
WHICH SHALL ADHERE TO THE FOLLOWING STANDARDS:
  (A) EXCEPT IN A CASE WHERE THE OBLIGATION OF A HEALTH PLAN TO  PAY  AN
INSURANCE  COMMISSION  OR OTHER COMPENSATION ARRANGEMENT TO AN INSURANCE
PRODUCER UPON RECEIPT OF PAYMENT OF PREMIUM OR OTHER CHARGE  FOR  PLACE-
MENT OF HEALTH INSURANCE COVERAGE IS NOT REASONABLY CLEAR, OR WHEN THERE
IS  A  REASONABLE  BASIS SUPPORTED BY SPECIFIC INFORMATION AVAILABLE FOR
REVIEW BY THE SUPERINTENDENT THAT  SUCH  PAYMENT  OF  PREMIUM  OR  OTHER
CHARGE  WAS  SUBMITTED  FRAUDULENTLY,  SUCH  HEALTH  PLAN SHALL PAY SUCH
INSURANCE COMMISSION OR  OTHER  COMPENSATION  ARRANGEMENT  TO  ANY  SUCH
INSURANCE  PRODUCER WITHIN FORTY-FIVE DAYS OF RECEIPT OF SUCH PAYMENT OF
PREMIUM OR OTHER CHARGE.
  (B) EACH FAILURE TO  TIMELY  PAY  AN  INSURANCE  COMMISSION  OR  OTHER
COMPENSATION  ARRANGEMENT  TO  AN  INSURANCE  PRODUCER  FOR PLACEMENT OF
HEALTH INSURANCE COVERAGE IN VIOLATION OF THIS SECTION SHALL  CONSTITUTE
A  SEPARATE  VIOLATION.  IN  ADDITION  TO THE PENALTIES PROVIDED IN THIS
CHAPTER, ANY HEALTH PLAN THAT FAILS TO ADHERE TO THE STANDARDS CONTAINED
IN THIS SECTION SHALL BE OBLIGATED  TO  PAY  TO  AN  INSURANCE  PRODUCER
INTEREST  ON  THE  AMOUNT  OF SUCH INSURANCE COMMISSION OR OTHER COMPEN-
SATION ARRANGEMENT DUE AND OWING THE GREATER OF THE RATE  EQUAL  TO  THE
RATE SET BY THE COMMISSIONER OF TAXATION AND FINANCE FOR CORPORATE TAXES
PURSUANT  TO  PARAGRAPH  ONE  OF  SUBSECTION (E) OF SECTION ONE THOUSAND
NINETY-SIX OF THE TAX LAW OR TWELVE PERCENT PER ANNUM,  TO  BE  COMPUTED
FROM THE DATE PAYMENT WAS REQUIRED TO BE MADE. WHEN THE AMOUNT OF INTER-
EST  DUE  ON  ANY  SUCH  PAYMENT IS LESS THAN TWO DOLLARS, A HEALTH PLAN
SHALL NOT BE REQUIRED TO PAY INTEREST ON SUCH PAYMENT.
  (C) THE PROVISIONS OF THIS SECTION SHALL APPLY  TO  ANY  PLACEMENT  OF
HEALTH  INSURANCE  COVERAGE  UNDER  CONTRACTS  OR  AGREEMENTS  ISSUED OR
ENTERED  INTO  PURSUANT  TO  THIS  ARTICLE   AND   ARTICLES   FORTY-TWO,
FORTY-THREE  AND  FORTY-SEVEN  OF THIS CHAPTER AND ARTICLE FORTY-FOUR OF
THE PUBLIC HEALTH LAW, INSIDE OR OUTSIDE THE  NEW  YORK  HEALTH  BENEFIT
EXCHANGE  ESTABLISHED  UNDER GOVERNOR'S EXECUTIVE ORDER NO. 42 (2012) TO
IMPLEMENT APPLICABLE PROVISIONS OF THE FEDERAL  PATIENT  PROTECTION  AND
AFFORDABLE CARE ACT, PUBLIC LAW 111-148 (42 USC S 18001 ET SEQ. (2010)).
  (D)  ANY  CONTRACT OR AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE
DATE OF THIS SECTION BETWEEN A HEALTH PLAN  AND  AN  INSURANCE  PRODUCER
THAT  ATTEMPTS TO ABROGATE, ALTER OR AMEND ANY OF THE PROVISIONS OF THIS
SECTION, SHALL BE VOID AS AGAINST PUBLIC POLICY.
  (E) FOR PURPOSES OF THIS SECTION:
  (1) "HEALTH PLAN" SHALL MEAN AN INSURER OR ORGANIZATION OR CORPORATION
LICENSED OR CERTIFIED PURSUANT TO ARTICLE FORTY-THREE OR FORTY-SEVEN  OF
THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW; AND
  (2)  "INSURANCE  PRODUCER"  SHALL  MEAN  AN INSURANCE AGENT, INSURANCE
BROKER OR INSURANCE CONSULTANT LICENSED PURSUANT TO  ARTICLE  TWENTY-ONE
OF THIS CHAPTER.
  S 3. This act shall take effect immediately.