The New York Insurance Department’s Office of General Counsel issued the following advisory legal opinions in April:
· An agent’s or broker’s consulting fee agreement must specify or clearly define the amount or extent of the fee. Consulting fees and service fees are separate concepts under the law and must be documented with separate agreements.
· A health care provider’s waiver of an otherwise applicable co-payment for an employee of a not-for-profit organization may constitute insurance fraud. A provider may establish different fee scales, depending upon the patient’s income, if it does not mislead an insurer as to the provider’s usual fee scale.
· An insurer must obtain the consent of each insured before it can make the insured's insurance policies available online as electronic documents, in lieu of issuing paper copies. A printout of an electronic insurance policy is admissible as evidence in a New York State court proceeding, as long as the court finds that the policy is a true and accurate representation of the electronic record.
· A licensed individual insurance agent, who has been properly appointed by an insurer, may act as a sub-producer for a corporate insurance agent of the same insurer, and receive commissions from the corporate insurance agent. The individual agent must also be licensed as a sub-licensee of the corporate insurance agent; in order to be a sub-licensee, the individual must be an officer or director of the corporate insurance agent. If the contract with the corporate insurance agent does not prohibit it, an individual insurance agent may also sell insurance on his or her own account.
· An excess lines insurer may not offer an “accident” endorsement to a general liability policy where the endorsement falls within the parameters of accident and health insurance or workers’ compensation insurance.
· An admitted insurer must return the gross unearned premium due under a financed insurance policy on a pro rata basis to the premium finance agency for the benefit of the insured. However, the insurer is entitled to a minimum earned premium of ten percent of the gross premium or sixty dollars, whichever is greater. An insurance policy provision that provides that the insurance premium is fully earned after 90 days, or that provides for a 30% minimum premium, or where a fixed amendment provides a different earned premium schedule, is contrary to the Insurance Law.
· If a parent does not add a newborn infant within the prescribed thirty-day period following delivery, the HMO is only required to provide inpatient hospital coverage for the mother and the newborn infant for at least 48 hours after a vaginal birth and at least 96 hours after a caesarean birth.
· A health care provider may bill a patient directly for health services rendered where the patient executed an assignment of no-fault benefits form granting the provider all of her rights, privileges and remedies, and the insurer denied the patient's claim on the ground that the claimed injuries were not medically ascertainable within one year of the motor vehicle accident.
· Use of a Ratings Report by insurance agents of an insurance company during the sales process to convince insureds to replace their current Medicare supplement policies with the company’s policies constitutes advertising material that must be filed with the Insurance Department prior to use.
The Department posted these and other opinions in April. Visit the Department’s Web site to find any opinion issued since 2000.