STATE OF NEW YORK
Cal. No. 755
May 7, 2010
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance -- reported
favorably from said committee, ordered to first and second report,
amended on second report, ordered to a third reading, and to be
reprinted as amended, retaining its place in the order of third read-
AN ACT to amend the insurance law, in relation to sponsored group
personal excess insurance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 3445 of the insurance law, as added by chapter 528
2 of the laws of 1998, is renumbered section 3453 and paragraphs 3, 6 and
3 7 of subsection (a) and subsections (c) and (d) of such section are
4 amended to read as follows:
5 (3) "Employee" means a director of the employer, or an individual or
6 partner who receives or has received income, wages or salaries from the
8 (6) "Group member" means a designated active or retired employee
9 insured under this section and also may include the employee's domestic
10 partner or any person related to the employee by blood, marriage,
11 adoption, or operation of law, who resides in the same household
12 (including a ward or foster child) or who is a dependent child away at
14 (7) "Group policy" means employer sponsored group personal excess
15 insurance written for the designated employees of an employer or other
16 group members as defined in this section.
17 (c) The premium for the group policy may be paid by the employer from
18 funds contributed:
19 (1) wholly by the employer;
20 (2) wholly by the employees or group members; or
21 (3) jointly by the employer and employees or group members.
22 (d) An employee or group member shall have the right to refuse cover-
23 age offered by an employer under this section.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
S. 7773--A 2
1 § 2. The insurance law is amended by adding a new section 3454 to read
2 as follows:
3 § 3454. Sponsored group personal insurance. (a) For purposes of this
4 section, the following definitions shall apply:
5 (1) "Certificate" or "certificate of insurance" means any policy,
6 contract or other evidence of insurance, or rider or endorsement there-
7 to, issued to a group member under a group policy.
8 (2) "Conditional renewal" means any change of limits, change in type
9 of coverage, reduction or elimination of coverage, increased deductible
10 or addition of exclusion, or increased premiums in excess of ten percent
11 (exclusive of any premium increase generated as a result of experience
12 rating, loss rating or retrospective rating).
13 (3) "Personal excess insurance" means insurance as defined in para-
14 graph thirteen or fourteen of subsection (a) of section one thousand one
15 hundred thirteen of this chapter, written as an excess insurance policy.
16 (4) "Personal property floater insurance" means insurance as defined
17 in subparagraph (C) of paragraph seven of subsection (a) of section one
18 thousand one hundred thirteen of this chapter.
19 (5) "Group policy" means a group insurance policy providing personal
20 excess insurance, personal property floater insurance, renters' insur-
21 ance, and vintage vehicle insurance, or any combination thereof, insur-
22 ing sponsor group members.
23 (6) "Group policyholder" means a sponsor.
24 (7) "Renters' insurance" means insurance insuring residential property
25 tenants, housing cooperative shareholders, or condominium owners against
26 the contingencies described in subparagraphs (A), (B) and (C), or (B)
27 and (C) of paragraph two of subsection (a) of section three thousand
28 four hundred twenty-five of this article.
29 (8) "Vintage vehicle insurance" means insurance insuring against loss-
30 es or liabilities arising out of the ownership, operation, or use of a
31 motor vehicle, and covering a motor vehicle that is antique, classic, or
32 made from a kit. For the purposes of this paragraph:
33 (A) an "antique" motor vehicle means a private passenger motor vehicle
34 that is at least twenty-five years old, and is maintained primarily for
35 use in exhibitions, club activities, parades, or other functions of
36 public interest, and occasionally used for other purposes; and
37 (B) a "classic" motor vehicle is a private passenger motor vehicle
38 that is at least ten years old, may be used on a regular basis, and the
39 motor vehicle's value is significantly higher than the average value of
40 other motor vehicles of the same make and model year.
41 (9) "Sponsor" means:
42 (A) an association, organization, labor union, federation, fraternity,
43 club or similar entity:
44 (i) in which the members are engaged in a common pursuit or enter-
46 (ii) that was formed for purposes other than obtaining insurance;
47 (iii) that has been in existence for more than three years;
48 (iv) that has twenty-five or more members; and
49 (v) that has adopted by-laws or similar governance rules, and a method
50 to enroll or register members; or
51 (B) a bank, corporation, partnership, trust company, or trustee of a
52 trust that owns twenty-five or more residential properties or living
53 units or a tenants' association, condominium association, or similar
54 organization, with respect to renters' insurance sold to lessees or
55 occupants of residential properties or living units owned by the bank,
S. 7773--A 3
1 corporation, partnership or trust, or who are members of the tenants'
2 association, condominium association, or similar organization.
3 (10) "Sponsor group member" means:
4 (A) an enrolled member, officer, or director of a sponsor;
5 (B) any domestic partner of the enrolled member, officer, or director;
6 (C) any person related to the enrolled member, officer, or director by
7 blood, marriage, adoption, or operation of law, who resides in the same
8 household (including a ward or foster child) or who is a dependent child
9 away at school; or
10 (D) a lessee or occupant of a residential property or living unit
11 owned by a bank, corporation, partnership or trust when the bank, corpo-
12 ration, partnership, trust company, or trustee of the trust is the spon-
13 sor, or when the sponsor is a tenants' association, condominium associ-
14 ation, or similar organization.
15 (b) A group policy written pursuant to this section may be issued or
16 issued for delivery in this state only in compliance with the provisions
17 of this section.
18 (c) The premium for the group policy, including certificates, shall be
19 paid by the sponsor group members. An insurer shall not provide coverage
20 in regard to a group policy that requires the purchase of insurance as a
21 condition of sponsor group membership or imposes any penalty upon a
22 sponsor group member if the sponsor group member does not purchase
23 insurance. If so authorized by the insurer, the sponsor group may aggre-
24 gate the group members' premiums and remit them to the insurer or to the
25 licensed insurance agent or broker representing the sponsor group. If an
26 insurer authorizes a sponsor group to aggregate and remit the premiums
27 of sponsor group members, then payment to the sponsor group by a sponsor
28 group member shall be deemed to be payment to the insurer.
29 (d) (1) Any policy dividend, retrospective premium credit, or retro-
30 spective premium refund not distributed shall be:
31 (A) applied to reduce future premiums and, accordingly, future
32 contributions, of existing or future group sponsor members, or both; or
33 (B) paid or refunded to those sponsor group members insured on the
34 date the payment or refund is made to the group policyholder, if
35 distributed by the group policyholder, or on the date of mailing, if
36 distributed directly by the insurer, subject to the following require-
38 (i) the insurer shall be responsible for determining the allocation of
39 the payment or refund to the sponsor group members;
40 (ii) if the group policyholder distributes the payment or refund, the
41 insurer shall be responsible for audit to ascertain that the payment or
42 refund is actually made in accordance with the allocation procedure; and
43 (iii) if the group policyholder fails to make the payment or refund,
44 the insurer shall make the payment or refund directly or use the method
45 provided in subparagraph (A) of this paragraph.
46 (2) Notwithstanding paragraph one of this subsection, if a dividend
47 accrues upon termination of coverage under a group policy, then the
48 group policyholder shall pay or refund the dividend to the sponsor group
49 members insured on the date the payment or refund is made to the group
51 (e) The insurer shall treat in like manner all eligible sponsor group
52 members of the same class and sponsor status.
53 (f) A group policy or certificate written pursuant to this section
54 shall not be eligible for placement by an excess line broker licensed
55 pursuant to article twenty-one of this chapter.
S. 7773--A 4
1 (g) A group policy written pursuant to this section shall provide
2 separate limits of coverage under the certificate issued to a sponsor
3 group member.
4 (h)(1) The insurer shall be responsible for the mailing or delivery of
5 a certificate of insurance to each sponsor group member insured under
6 the group policy. The insurer also shall be responsible for the mailing
7 or delivery to each sponsor group member of any amended certificate of
8 insurance, or endorsement to the certificate, whenever there is a change
9 of limits; change in type of coverage; addition, reduction, or elimi-
10 nation of coverage; or addition of an exclusion, under the group policy
11 or certificate. If so authorized by the insurer, the sponsor group may
12 mail or deliver certificates, endorsements and other coverage notices to
13 the sponsor group members on behalf of the insurer.
14 (2) The certificate shall contain in substance all material terms and
15 conditions of coverage afforded to the sponsor group member, unless the
16 group policy is incorporated by reference and a copy of the group policy
17 accompanies the certificate.
18 (3) If the coverage afforded to a sponsor group member is excess of
19 other applicable insurance coverage, then the certificate shall contain
20 a notice advising the sponsor group member that, if the member has other
21 insurance coverage, specified coverages under the group policy shall be
22 excess over the other insurance.
23 (i) A group policyholder shall comply with the provisions of section
24 two thousand one hundred twenty-two of this chapter, in the same manner
25 as an insurance producer, in any advertisement, sign, pamphlet, circu-
26 lar, card, or other public announcement referring to coverage under a
27 group policy or certificate.
28 (j) A group policy or certificate shall not be subject to section
29 three thousand four hundred twenty-five or section three thousand four
30 hundred twenty-six of this article. The following requirements shall
31 apply in regard to termination of coverage:
32 (1) An insurer may cancel a group policy or certificate only if
33 cancellation is based on one or more of the reasons set forth in para-
34 graph one of subsection (c) of section three thousand four hundred twen-
35 ty-six of this article; provided, however, that an act or omission by a
36 sponsor group member that would constitute the basis for cancellation of
37 an individual certificate shall not constitute the basis for cancella-
38 tion of the group policy.
39 (2)(A) An insurer's cancellation of a group policy, including all
40 certificates, shall not become effective until forty-five days, or twen-
41 ty days if based upon non-payment of premium, after the insurer mails or
42 delivers written notice of cancellation to the group policyholder at the
43 mailing address shown in the policy, and to the sponsor group member at
44 the sponsor group member's mailing address.
45 (B) An insurer's cancellation of an individual certificate shall not
46 become effective until forty-five days after the insurer mails or deliv-
47 ers written notice of cancellation to the sponsor group member at the
48 sponsor group member's mailing address and to the group policyholder at
49 the mailing address shown in the group policy.
50 (C) (i) A group policyholder may cancel a group policy, including all
51 certificates, or any individual certificate, for any reason, upon ninety
52 days written notice to the insurer and each sponsor group member.
53 (ii) The group policyholder shall mail or deliver written notice to
54 each affected group member of the group policyholder's cancellation of
55 the group policy or certificate and the effective date of cancellation.
56 The group policyholder shall mail or deliver the written notice to the
S. 7773--A 5
1 sponsor group member's mailing address at least ninety days prior to the
2 effective date of the cancellation.
3 (3)(A) Unless the group policy provides for a longer policy period,
4 the policy and all certificates shall be issued or renewed for a one-
5 year policy period.
6 (B) The sponsor group member shall be entitled to renew the certif-
7 icate upon timely payment of the premium billed to the sponsor group
8 member for the renewal, unless:
9 (i) the insurer mails or delivers to the sponsor group member written
10 notice of nonrenewal or conditional renewal; and
11 (ii) the insurer mails or delivers written notice at least ninety, but
12 not more than two hundred forty days prior to the expiration date speci-
13 fied in the policy or, if the policy does not specify a date, then the
14 next anniversary date of the policy.
15 (4) Where the group policyholder nonrenews the group policy, the group
16 policyholder shall mail or deliver written notice to each sponsor group
17 member advising the sponsor group member of nonrenewal of the group
18 policy and the effective date of nonrenewal. The group policy holder
19 shall mail or deliver the written notice at least ninety days prior to
20 the nonrenewal.
21 (5) Every notice of cancellation, nonrenewal, or conditional renewal
22 shall contain the specific reason or reasons for cancellation, nonrene-
23 wal, or conditional renewal.
24 (6)(A) An insurer shall not be required under this subsection to give
25 notice to a sponsor group member if the insurer has been advised by
26 either the group policyholder or another insurer that substantially
27 similar coverage has been obtained from the other insurer without lapse
28 of coverage.
29 (B) A group policyholder shall not be required under this subsection
30 to give notice to sponsor group member if substantially similar coverage
31 has been obtained from another insurer without lapse of coverage.
32 (k) If an insurer cancels or nonrenews a renters' insurance group
33 policy, then the insurer shall offer to convert a certificate to an
34 individual insurance policy, using the insurer's filed rates and forms
35 for individual policies, for any remaining part of the required policy
36 period set forth in section three thousand four hundred twenty-five of
37 this article.
38 § 3. This act shall take effect immediately.