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: A7266
SPONSOR: Pretlow 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:
2024 01/03/24 A4480 referred to insurance
2023 02/16/23 A4480 referred to insurance
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.
