Relates to authorizing non-insurance benefits or services to be offered as part of group life or group or blanket accident or health insurance policies.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4480
SPONSOR: Pretlow (MS) TITLE OF BILL:
An act to amend the insurance law, in relation to authorizing non-insu-
rance benefits or services to be offered as part of a group life or
group or blanket accident and health insurance policy
PURPOSE:
This bill will add a new § 3242 to the Insurance Law to expressly permit
life insurers to include as part of a group life or group or blanket
accident and health insurance policy certain non-insurance benefits such
as: financial and estate planning services; financial counseling for
beneficiaries; travel assistance services; grief counseling services'
funeral planning services; and identity theft services
SUMMARY OF PROVISIONS:
This bill will add a new § 3242 to the Insurance Law to expressly permit
life insurers to include as part of a group life or accident & health
insurance contract certain non-insurance benefits or services, as
expressly provided or any other benefit or service approved by the
Superintendent. This bill also creates an exception to § 4224 of the
Insurance Law for circumstances where the non-insurance benefits are
permitted under § 3242 of the Insurance Law.
JUSTIFICATION:
Section 4224 of the Insurance Law prohibits insurers and their producers
from so-called "rebating" where something of value is offered for no
charge for the purpose of inducing the purchase of a product. Although
this law was intended to prevent, for instance, insurance producers from
offering merchandise or prizes as an inducement to purchase an insurance
policy, it has been much more broadly interpreted and applied by state
insurance regulators during the policy form filing review process. This
broad interpretation of this section of law has had implications for
insurers which have attempted to have policy form filings approved that
proposed to include certain types of non-insurance benefits and
services, as outlined above, that are routinely offered free of charge
as part of group insurance policies in other states.
If enacted, this bill would expressly permit insurance customers in New
York to benefit from these types of non-insurance benefits & service
that are expressly authorized in•the bill and are routinely provided to
such group customers/employees in other states. It also authorizes the
Superintendent of Financial Services to approve any other such benefit
or services that he or she deems appropriate going forward In addition
to providing express authorization for these types of benefits &
services, this bill will also provide a specific exemption from § 4224
of the Insurance Law so that it is clear that these types of benefits
and services are not considered to be a rebate.
Enactment of this bill will facilitate life insurers to provide New York
employers and employees who are purchasing group life or accident &
health insurance coverage with these additional benefits for no charge
and will afford them with the opportunity to take advantage of the
services, similarly, to employees in other states.
LEGISLATIVE HISTORY:
2021-2022 A1697 referred to insurance
2019-2020 A3539 referred to insurance
01/03/18 A4024 referred to insurance
05/20/15 A7609 referred to insurance
01/06/16 A7069 referred to insurance
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
This act shall take effect Immediately.
STATE OF NEW YORK
________________________________________________________________________
4480
2023-2024 Regular Sessions
IN ASSEMBLY
February 16, 2023
___________
Introduced by M. of A. PRETLOW -- Multi-Sponsored by -- M. of A. LUPARDO
-- read once and referred to the Committee on Insurance
AN ACT to amend the insurance law, in relation to authorizing non-insu-
rance benefits or services to be offered as part of a group life or
group or blanket accident and health insurance policy
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 3245
2 to read as follows:
3 § 3245. Non-insurance benefits and services as part of a policy or
4 certificate of group life or group or blanket accident and health insur-
5 ance. (a) An insurer licensed to write life insurance and accident and
6 health insurance may include certain non-insurance benefits or services
7 in conjunction with its issuance of a group life insurance or group or
8 blanket accident and health insurance policy. If included, such non-in-
9 surance benefits or services shall be made available to similarly-situ-
10 ated members of the group. Any non-insurance benefits or services made
11 available under the policy shall be set forth in the policy and the
12 certificate.
13 (b) Non-insurance benefits and services permitted under this section
14 shall include, but not be limited to, the following:
15 (1) financial and estate planning services;
16 (2) financial counseling for beneficiaries;
17 (3) travel assistance services;
18 (4) grief counseling services;
19 (5) funeral planning services;
20 (6) identity theft services; and
21 (7) any other benefit or service that may be approved by the super-
22 intendent.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06680-01-3
A. 4480 2
1 (c) Any entity providing non-insurance benefits or services permitted
2 under this section must be appropriately licensed to provide such bene-
3 fits or services.
4 (d) The superintendent may adopt rules to regulate the disclosure in
5 the policy and certificate related to the non-insurance benefits or
6 services permitted under this section and included in the policy.
7 § 2. Subsection (c) of section 4224 of the insurance law, as amended
8 by chapter 496 of the laws of 2013, is amended to read as follows:
9 (c) Except as permitted by section three thousand two hundred thirty-
10 nine or three thousand two hundred forty-five of this chapter or
11 subsection (f) of this section, no such life insurance company and no
12 such savings and insurance bank and no officer, agent, solicitor or
13 representative thereof and no such insurer doing in this state the busi-
14 ness of accident and health insurance and no officer, agent, solicitor
15 or representative thereof, and no licensed insurance broker and no
16 employee or other representative of any such insurer, agent or broker,
17 shall pay, allow or give, or offer to pay, allow or give, directly or
18 indirectly, as an inducement to any person to insure, or shall give,
19 sell or purchase, or offer to give, sell or purchase, as such induce-
20 ment, or interdependent with any policy of life insurance or annuity
21 contract or policy of accident and health insurance, any stocks, bonds,
22 or other securities, or any dividends or profits accruing or to accrue
23 thereon, or any valuable consideration or inducement whatever not speci-
24 fied in such policy or contract other than any valuable consideration,
25 including but not limited to merchandise or periodical subscriptions,
26 not exceeding twenty-five dollars in value; nor shall any person in this
27 state knowingly receive as such inducement, any rebate of premium or
28 policy fee or any special favor or advantage in the dividends or other
29 benefits to accrue on any such policy or contract, or knowingly receive
30 any paid employment or contract for services of any kind, or any valu-
31 able consideration or inducement whatever which is not specified in such
32 policy or contract.
33 § 3. This act shall take effect immediately.
