2012 New York Consolidated Laws
ISC - Insurance
Article 21 - (2101 - 2137) AGENTS, BROKERS, ADJUSTERS, CONSULTANTS AND INTERMEDIARIES
2123 - Misrepresentations, misleading statements and incomplete comparisons.

 
    §  2123.  Misrepresentations,  misleading  statements  and  incomplete
  comparisons. (a) (1) No agent or representative of any insurer or health
  maintenance organization authorized to transact life, accident or health
  insurance or health maintenance organization business in this state  and
  no   insurance  broker,  and  no  other  person,  firm,  association  or
  corporation, shall issue or circulate or cause or permit to be issued or
  circulated,  any  illustration,  circular,   statement   or   memorandum
  misrepresenting  the  terms,  benefits  or  advantages  of any policy or
  contract of life, accident or health insurance, any annuity contract  or
  any  health  maintenance  organization contract, delivered or issued for
  delivery or to be delivered or issued for delivery, in  this  state,  or
  shall  make  any  misleading  estimate  as  to the dividends or share of
  surplus or additional amounts to be  received  in  the  future  on  such
  policy  or  contract, or shall make any false or misleading statement as
  to the dividends or share of surplus or  additional  amounts  previously
  paid  by  any such insurer or health maintenance organization on similar
  policies or contracts, or shall make any misleading  representation,  or
  any misrepresentation, as to the financial condition of any such insurer
  or  health  maintenance  organization, or as to the legal reserve system
  upon which such insurer or health maintenance organization operates.
    (2) No such person, firm, association or corporation shall make to any
  person or persons any incomplete comparison  of  any  such  policies  or
  contracts  of any insurer, insurers, or health maintenance organization,
  for the purpose of inducing,  or  tending  to  induce,  such  person  or
  persons  to  lapse,  forfeit or surrender any insurance policy or health
  maintenance organization contract.
    (3)  Any  replacement  of  individual  life  insurance   policies   or
  individual  annuity  contracts of an insurer by an agent, representative
  of the same or different insurer or broker shall  conform  to  standards
  promulgated by regulation by the superintendent. Such regulation shall:
    (A)  specify  what  constitutes  the  replacement  of a life insurance
  policy or annuity contract and the proper  disclosure  and  notification
  procedures to replace a policy or contract;
    (B)  require  notification  of the proposed replacement to the insurer
  whose policies or contracts are intended to be replaced;
    (C) require the timely exchange of illustrative and  cost  information
  required  by section three thousand two hundred nine of this chapter and
  necessary for completion of a comparison of the  proposed  and  replaced
  coverage; and
    (D)   provide  for  a  sixty-day  period  following  issuance  of  the
  replacement policies or contracts during which the  policy  or  contract
  owner  may  return  the policies or contracts and reinstate the replaced
  policies or contracts.
    (b) Any comparison of the policies or contracts of any  such  insurer,
  insurers  or  health  maintenance  organization shall be deemed to be an
  incomplete comparison if it does not conform to all the requirements for
  comparisons established by regulation.
    (c) In the determination, judicial or otherwise, of the incompleteness
  or misleading character of any such comparison, it shall not be presumed
  that the insured knew or knows  of  any  of  the  provisions,  terms  or
  benefits  contained  in  any  insurance  policy  or  health  maintenance
  organization contract.
    (d) Any agent or representative of an insurer  or  health  maintenance
  organization,   any   insurance  broker  and  any  other  person,  firm,
  association or corporation who, or  which,  shall  violate  any  of  the
  provisions  of this section and shall knowingly receive any compensation
  or commission for the sale of any insurance policy,  health  maintenance
  organization  or annuity contract induced by a violation of this section

  shall also be liable for a civil penalty in the amount received by  such
  violator  as  compensation  or commission, which penalty may be sued for
  and recovered for his own use and  benefit  by  any  person  induced  to
  purchase an insurance policy, health maintenance organization or annuity
  contract  by  such  violation.  In addition, such agent, representative,
  broker, person, firm, association or corporation violating this  section
  shall be liable for a civil penalty in the amount of any compensation or
  commission  lost by any agent, representative or broker as a result of a
  violation of this section or the making  of  such  false  or  misleading
  statement,  which  penalty may be sued for and recovered for his own use
  and benefit by such agent, representative or broker.
    * (e) Except with respect to a credit unemployment  insurance  policy,
  group  credit life insurance policy, a group credit health, group credit
  accident or group credit health and accident policy,  or  similar  group
  credit  insurance  covering  the  person of the insured, state chartered
  banking institutions, federally chartered banking institutions  and  any
  person  soliciting  the purchase of or selling insurance on the premises
  thereof, must disclose or  cause  to  be  disclosed  in  writing,  where
  practicable,  in  clear  and  concise  language,  to their customers and
  prospective customers who are solicited  therefor,  that  any  insurance
  offered or sold:
    (1) is not a deposit;
    (2) is not insured by the federal deposit insurance corporation or the
  national credit union share insurance fund, as applicable; and
    (3)  is  not  guaranteed by the state chartered banking institution or
  the federally chartered banking institution.
    * NB Repealed September 10, 2014
    * (f) For the purposes of this section,  the  terms  "state  chartered
  banking  institutions"  and  "federally  chartered banking institutions"
  shall have the same meanings as set forth in subdivision one of  section
  twelve-a of the banking law.
    * NB Repealed September 10, 2014