Senate Bill S3623

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3623
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 11, 2019
                                ___________
 
 Introduced  by  Sens. BRESLIN, 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
 MAJOR MEDICAL OR ANY OTHER COMPREHENSIVE TYPE OF HEALTH INSURANCE COVER-
 AGE BY AN INSURANCE BROKER  UNDER  CONTRACTS  OR  AGREEMENTS  ISSUED  OR
 ENTERED  INTO  BY  A  HEALTH  PLAN 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 § 18001
 ET SEQ. (2010)).
   § 2. The insurance law is amended by adding a new  section  3224-d  to
 read as follows:
   §  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
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09804-01-9

 S. 3623                             2
 
 EQUITABLE  PAYMENTS  OF  INSURANCE  COMMISSIONS  OR  OTHER  COMPENSATION
 ARRANGEMENTS  TO  HEALTH  INSURANCE  PRODUCERS  FOR  PLACEMENT  OF MAJOR
 MEDICAL OR ANY OTHER COMPREHENSIVE TYPE  OF  HEALTH  INSURANCE  COVERAGE
 UNDER  CONTRACTS  OR  AGREEMENTS ISSUED OR ENTERED INTO BY A HEALTH PLAN
 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  MAJOR MEDICAL OR ANY OTHER COMPREHENSIVE TYPE OF HEALTH INSUR-
 ANCE 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  SUBMIT-
 TED  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 MAJOR
 MEDICAL OR ANY OTHER COMPREHENSIVE TYPE 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 COMPENSATION ARRANGEMENT DUE AND OWING THE
 GREATER  OF  THE RATE EQUAL TO THE RATE SET BY THE COMMISSIONER OF TAXA-
 TION 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 INTEREST 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
 MAJOR MEDICAL OR ANY OTHER COMPREHENSIVE TYPE OF HEALTH INSURANCE COVER-
 AGE  UNDER  CONTRACTS  OR  AGREEMENTS ISSUED OR ENTERED INTO BY A HEALTH
 PLAN 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 § 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.
   § 3. This act shall take effect immediately.