2022 New York Laws
ISC - Insurance
Article 21 - 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,
insurance  broker,  person  who  has  received a grant from and has been
certified by the health benefit exchange established pursuant to section
1311 of the Affordable Care  Act,  42  U.S.C.  §  18031,  to  act  as  a
navigator,  including  any  person employed by a certified navigator, or
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, insurance broker, person who has received a grant from and

has been certified by the health benefit exchange  established  pursuant
to section 1311 of the affordable care act, 42 U.S.C. § 18031, to act as
a  navigator, including any person employed by a certified navigator, or
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 solicitation, sale or
negotiation 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, her, or its 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, her, or
its 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, 2024
  * (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, 2024