S T A T E   O F   N E W   Y O R K
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                                  1051

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                             January 8, 2015
                               ___________

Introduced  by  M. of A. CAHILL -- Multi-Sponsored by -- M. of A. CLARK,
  ENGLEBRIGHT, GOTTFRIED, HOOPER, PERRY -- 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
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.
                                                           LBD03228-01-5
              

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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

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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 496 of the laws of 2013, is amended to read as follows:
  (c) (1) Except as permitted by  section  three  thousand  two  hundred
thirty-nine  of  this chapter or subsection (f) of this section, 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 accident and health insur-
ance, 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 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 what-
ever 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 (g) to read as follows:
  (G) 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.