2013 New York Consolidated Laws
ISC - Insurance
Article 34 - (3401 - 3454) INSURANCE CONTRACTS-PROPERTY/CASUALTY
3454 - Sponsored group personal insurance.

 
    §  3454.  Sponsored group personal insurance. (a) For purposes of this
  section, the following definitions shall apply:
    (1) "Certificate" or "certificate  of  insurance"  means  any  policy,
  contract  or  other  evidence  of  insurance,  or  rider  or endorsement
  thereto, issued to a group member under a group policy.
    (2) "Conditional renewal" means any change of limits, change  in  type
  of  coverage, reduction or elimination of coverage, increased deductible
  or addition of exclusion, or increased premiums in excess of ten percent
  (exclusive of any premium increase generated as a result  of  experience
  rating, loss rating or retrospective rating).
    (3)   "Personal  excess  insurance"  means  insurance  as  defined  in
  paragraph thirteen or fourteen of subsection (a) of section one thousand
  one hundred thirteen of this chapter, written  as  an  excess  insurance
  policy.
    (4)  "Personal  property floater insurance" means insurance as defined
  in subparagraph (C) of paragraph seven of subsection (a) of section  one
  thousand one hundred thirteen of this chapter.
    (5)  "Group  policy" means a group insurance policy providing personal
  excess  insurance,  personal  property   floater   insurance,   renters'
  insurance,  and  vintage  vehicle insurance, or any combination thereof,
  insuring sponsor group members.
    (6) "Group policyholder" means a sponsor.
    (7) "Renters' insurance" means insurance insuring residential property
  tenants, housing cooperative shareholders, or condominium owners against
  the contingencies described in subparagraphs (A), (B) and  (C),  or  (B)
  and  (C)  of  paragraph  two of subsection (a) of section three thousand
  four hundred twenty-five of this article.
    (8) "Vintage  vehicle  insurance"  means  insurance  insuring  against
  losses or liabilities arising out of the ownership, operation, or use of
  a  motor vehicle, and covering a motor vehicle that is antique, classic,
  or made from a kit. For the purposes of this paragraph:
    (A) an "antique" motor vehicle means a private passenger motor vehicle
  that is at least twenty-five years old, and is maintained primarily  for
  use  in  exhibitions,  club  activities,  parades, or other functions of
  public interest, and occasionally used for other purposes; and
    (B) a "classic" motor vehicle is a  private  passenger  motor  vehicle
  that  is at least ten years old, may be used on a regular basis, and the
  motor vehicle's value is significantly higher than the average value  of
  other motor vehicles of the same make and model year.
    (9) "Sponsor" means:
    (A) an association, organization, labor union, federation, fraternity,
  club or similar entity:
    (i)  in  which  the  members  are  engaged  in  a  common  pursuit  or
  enterprise;
    (ii) that was formed for purposes other than obtaining insurance;
    (iii) that has been in existence for more than three years;
    (iv) that has twenty-five or more members; and
    (v) that has adopted by-laws or similar governance rules, and a method
  to enroll or register members; or
    (B) a bank, corporation, partnership, trust company, or trustee  of  a
  trust  that  owns  twenty-five  or more residential properties or living
  units or a tenants' association,  condominium  association,  or  similar
  organization,  with  respect  to  renters'  insurance sold to lessees or
  occupants of residential properties or living units owned by  the  bank,
  corporation,  partnership  or  trust, or who are members of the tenants'
  association, condominium association, or similar organization.
    (10) "Sponsor group member" means:
    (A) an enrolled member, officer, or director of a sponsor;

    (B) any domestic partner of the enrolled member, officer, or director;
    (C) any person related to the enrolled member, officer, or director by
  blood,  marriage, adoption, or operation of law, who resides in the same
  household (including a ward or foster child) or who is a dependent child
  away at school; or
    (D) a lessee or occupant of a  residential  property  or  living  unit
  owned  by  a  bank,  corporation,  partnership  or  trust when the bank,
  corporation, partnership, trust company, or trustee of the trust is  the
  sponsor,  or  when  the  sponsor  is a tenants' association, condominium
  association, or similar organization.
    (b) A group policy written pursuant to this section may be  issued  or
  issued for delivery in this state only in compliance with the provisions
  of this section.
    (c) The premium for the group policy, including certificates, shall be
  paid by the sponsor group members. An insurer shall not provide coverage
  in regard to a group policy that requires the purchase of insurance as a
  condition  of  sponsor  group  membership  or imposes any penalty upon a
  sponsor group member if the  sponsor  group  member  does  not  purchase
  insurance.  If  so  authorized  by  the  insurer,  the sponsor group may
  aggregate the group members' premiums and remit them to the  insurer  or
  to  the  licensed  insurance  agent  or  broker representing the sponsor
  group. If an insurer authorizes a sponsor group to aggregate  and  remit
  the premiums of sponsor group members, then payment to the sponsor group
  by a sponsor group member shall be deemed to be payment to the insurer.
    (d)   (1)  Any  policy  dividend,  retrospective  premium  credit,  or
  retrospective premium refund not distributed shall be:
    (A)  applied  to  reduce  future  premiums  and,  accordingly,  future
  contributions, of existing or future group sponsor members, or both; or
    (B)  paid  or  refunded  to those sponsor group members insured on the
  date the payment or  refund  is  made  to  the  group  policyholder,  if
  distributed  by  the  group  policyholder, or on the date of mailing, if
  distributed  directly  by  the  insurer,  subject   to   the   following
  requirements:
    (i) the insurer shall be responsible for determining the allocation of
  the payment or refund to the sponsor group members;
    (ii)  if the group policyholder distributes the payment or refund, the
  insurer shall be responsible for audit to ascertain that the payment  or
  refund is actually made in accordance with the allocation procedure; and
    (iii)  if  the group policyholder fails to make the payment or refund,
  the insurer shall make the payment or refund directly or use the  method
  provided in subparagraph (A) of this paragraph.
    (2)  Notwithstanding  paragraph  one of this subsection, if a dividend
  accrues upon termination of coverage under  a  group  policy,  then  the
  group policyholder shall pay or refund the dividend to the sponsor group
  members  insured  on the date the payment or refund is made to the group
  policyholder.
    (e) The insurer shall treat in like manner all eligible sponsor  group
  members of the same class and sponsor status.
    (f)  A  group  policy  or certificate written pursuant to this section
  shall not be eligible for placement by an excess  line  broker  licensed
  pursuant to article twenty-one of this chapter.
    (g)  A  group  policy  written  pursuant to this section shall provide
  separate limits of coverage under the certificate issued  to  a  sponsor
  group member.
    (h)(1) The insurer shall be responsible for the mailing or delivery of
  a  certificate  of  insurance to each sponsor group member insured under
  the group policy. The insurer also shall be responsible for the  mailing
  or  delivery  to each sponsor group member of any amended certificate of

  insurance, or endorsement to the certificate, whenever there is a change
  of  limits;  change  in  type  of  coverage;  addition,  reduction,   or
  elimination  of  coverage;  or addition of an exclusion, under the group
  policy  or  certificate.  If  so  authorized by the insurer, the sponsor
  group may mail or deliver certificates, endorsements and other  coverage
  notices to the sponsor group members on behalf of the insurer.
    (2)  The certificate shall contain in substance all material terms and
  conditions of coverage afforded to the sponsor group member, unless  the
  group policy is incorporated by reference and a copy of the group policy
  accompanies the certificate.
    (3)  If  the  coverage afforded to a sponsor group member is excess of
  other applicable insurance coverage, then the certificate shall  contain
  a notice advising the sponsor group member that, if the member has other
  insurance  coverage, specified coverages under the group policy shall be
  excess over the other insurance.
    (i) A group policyholder shall comply with the provisions  of  section
  two  thousand one hundred twenty-two of this chapter, in the same manner
  as  an  insurance  producer,  in  any  advertisement,  sign,   pamphlet,
  circular, card, or other public announcement referring to coverage under
  a group policy or certificate.
    (j)  A  group  policy  or  certificate shall not be subject to section
  three thousand four hundred twenty-five or section three  thousand  four
  hundred  twenty-six  of  this  article. The following requirements shall
  apply in regard to termination of coverage:
    (1) An insurer may cancel  a  group  policy  or  certificate  only  if
  cancellation  is  based  on  one  or  more  of  the reasons set forth in
  paragraph one of subsection (c) of section three thousand  four  hundred
  twenty-six  of  this article; provided, however, that an act or omission
  by  a  sponsor  group  member  that  would  constitute  the  basis   for
  cancellation of an individual certificate shall not constitute the basis
  for cancellation of the group policy.
    (2)(A)  An  insurer's  cancellation  of  a group policy, including all
  certificates, shall not  become  effective  until  forty-five  days,  or
  twenty  days  if  based  upon  non-payment of premium, after the insurer
  mails  or  delivers  written  notice  of  cancellation  to   the   group
  policyholder  at  the  mailing  address  shown in the policy, and to the
  sponsor group member at the sponsor group member's mailing address.
    (B) An insurer's cancellation of an individual certificate  shall  not
  become  effective  until  forty-five  days  after  the  insurer mails or
  delivers written notice of cancellation to the sponsor group  member  at
  the sponsor group member's mailing address and to the group policyholder
  at the mailing address shown in the group policy.
    (C)  (i) A group policyholder may cancel a group policy, including all
  certificates, or any individual certificate, for any reason, upon ninety
  days written notice to the insurer and each sponsor group member.
    (ii) The group policyholder shall mail or deliver  written  notice  to
  each  affected  group member of the group policyholder's cancellation of
  the group policy or certificate and the effective date of  cancellation.
  The  group  policyholder shall mail or deliver the written notice to the
  sponsor group member's mailing address at least ninety days prior to the
  effective date of the cancellation.
    (3)(A) Unless the group policy provides for a  longer  policy  period,
  the  policy  and  all  certificates  shall  be  issued  or renewed for a
  one-year policy period.
    (B)  The  sponsor  group  member  shall  be  entitled  to  renew   the
  certificate  upon  timely  payment  of the premium billed to the sponsor
  group member for the renewal, unless:

    (i) the insurer mails or delivers to the sponsor group member  written
  notice of nonrenewal or conditional renewal; and
    (ii) the insurer mails or delivers written notice at least ninety, but
  not  more  than  two  hundred  forty  days  prior to the expiration date
  specified in the policy or, if the policy does not specify a date,  then
  the next anniversary date of the policy.
    (4) Where the group policyholder nonrenews the group policy, the group
  policyholder  shall mail or deliver written notice to each sponsor group
  member advising the sponsor group member  of  nonrenewal  of  the  group
  policy  and  the  effective  date of nonrenewal. The group policy holder
  shall mail or deliver the written notice at least ninety days  prior  to
  the nonrenewal.
    (5)  Every  notice of cancellation, nonrenewal, or conditional renewal
  shall  contain  the  specific  reason  or  reasons   for   cancellation,
  nonrenewal, or conditional renewal.
    (6)(A)  An insurer shall not be required under this subsection to give
  notice to a sponsor group member if the  insurer  has  been  advised  by
  either  the  group  policyholder  or  another insurer that substantially
  similar coverage has been obtained from the other insurer without  lapse
  of coverage.
    (B)  A  group policyholder shall not be required under this subsection
  to give notice to sponsor group member if substantially similar coverage
  has been obtained from another insurer without lapse of coverage.
    (k) If an insurer cancels or  nonrenews  a  renters'  insurance  group
  policy,  then  the  insurer  shall  offer to convert a certificate to an
  individual insurance policy, using the insurer's filed rates  and  forms
  for  individual  policies, for any remaining part of the required policy
  period set forth in section three thousand four hundred  twenty-five  of
  this article.