Question from an IIABNY member: It is my understanding that New York State requires conditional renewal notices for changes in rates, terms or conditions for New York Statutory Disability policies. Can you confirm?
Answer: That is not correct. The answer is a little bit complicated. Here is my logic:
1. The New York Disability Benefits Law is contained within Article 9 of the New York Workers' Compensation Law.
2. New York Insurance Law Section 1113 states in part,
"(a) The kinds of insurance which may be authorized in this state, subject to other provisions of this chapter, and their scope, are set forth in the following paragraphs…(3) 'Accident and health insurance,' means (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability and family leave benefits pursuant to article nine of the workers' compensation law, except as specified in item (ii) hereof; and (ii) non-cancellable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date."
This means that New York law considers DBL to be a type of accident and health insurance.
3. New York Insurance Law Section 3426 is the law that requires conditional renewal notices for some types of commercial lines policies. It states in part:
"(a) Definitions. As used in this section:
(1) 'Covered policy' means, for purposes of this section, a policy of commercial risk insurance, professional liability insurance or public entity insurance, and shall include any contract, certificate or other evidence of such insurance."
4. New York Insurance Law Section 107 states in part,
"(a) In this chapter, unless the context otherwise requires: …
(47) 'Commercial risk insurance' means insurance not subject to section three thousand four hundred twenty-five of this chapter issued or issued for delivery in this state, on a risk located in this state, insuring any of the following contingencies:
(A) loss of or damage to real property;
(B) loss of or damage to personal property;
(C) losses or liabilities arising out of the ownership, operation or use of a motor vehicle;
(D) liabilities of persons acting as officers or directors; or
(E) other liabilities, including product liability, for loss of, damage to, or injury to persons or property. …
(49) 'Professional liability insurance' means insurance covering liability arising out of the practice of any profession for which a license is required by a governmental authority of this state or, with respect to treatment of patients, arising out of the operation of a duly certified hospital.
(50) 'Public entity insurance' means commercial risk insurance issued to a public entity."
"Accident and health insurance" does not fit within the above definitions of "commercial risk insurance," "professional liability insurance," and "public entity insurance." Therefore, an accident and health insurance policy is not a "covered policy" under Section 3426. Since DBL insurance is a type of accident and health insurance, it is not a type of policy covered by Section 3426. This means that Section 3426's requirements for 60 to 120 days advance notice of coverage changes and premium increases do not apply to DBL. Rather, New York Workers' Compensation Law Section 226 applies:
"5. No contract of insurance issued by an insurance carrier providing the benefits to be paid under this article [NOTE: Article 9] shall be cancelled within the time limited in such contract for its expiration unless notice is given as required by this section. When cancellation is due to non-payment of premiums such cancellation shall not be effective until at least ten days after a notice of cancellation of such contract, on a date specified in such notice, shall be filed in the office of the chair and also served on the employer. When cancellation is due to any reason other than non-payment of premiums such cancellation shall not be effective until at least thirty days after a notice of cancellation of such contract, on a date specified in such notice, shall be filed in the office of the chair and also served on the employer; provided, however, in either case that if insurance with another insurance carrier has been obtained which becomes effective prior to the expiration of the time stated in such notice, the cancellation shall be effective as of the date of such other coverage. Such notice shall be served on the employer as prescribed by the chair, including delivering it to him or her by electronic means; provided that, if the employer be a partnership, then such notice may be given to any one of the partners, and if the employer be a corporation then the notice may be given to any agent or officer of the corporation upon whom legal process may be served, provided, however, the right to cancellation of a policy of insurance in the state fund shall be exercised only for nonpayment of premiums or as provided in section ninety-four of this chapter. [NOTE: Section 94 requires employers to give the New York State Insurance Fund 30 days' advance notice if they wish to withdraw from the Fund.]"
This law requires 10 days' notice of cancellation for non-payment of premium and 30 days' notice of cancellation for any other reason. It does not require conditional renewal notices under any circumstances.
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