Relates to what constitutes doing an insurance business in the state.
TITLE OF BILL: An act to amend the insurance law, in relation to internet enrollment of employees
PURPOSE: This bill would amend § 1101(b) of the insurance law to facilitate internet enrollment of an employee who is a resident of this state and who is applying to be covered under a group life, health or annuity contract that has been issued to an out-of-state employer by an insurer that is otherwise not authorized to transact business in this state.
SUMMARY OF PROVISIONS: This bill would amend § 1101(b) of the insurance law by making a conforming amendment to paragraph (1) and adding a new paragraph (8) which establishes the circumstances under which an insurer otherwise not authorized to do business in this state may facilitate internet enrollment by a resident employee of this state for a group life or accident and health insurance policy or a group annuity contract.
JUSTIFICATION: Section 1101 of the insurance law defines what constitutes "doing an insurance business" in New York state. Current subsection (b)(2)-(7) of this section describe the circumstances under which certain transactions are considered exempt from the section and would not be considered "doing an insurance business" in this state.
This legislation seeks to add a new subsection (b)(8) to such section to provide that an unauthorized insurer will not be "doing an insurance business" in the state, if they offer an option for internet enrollment by New York residents who are employed by an out of state employer under a group life or group accident and health insurance policy or a group annuity contract that is being issued by such unauthorized insurer. The legislation also requires: 1) that the group insurance contract being issued to the New York resident by the unauthorized insurer must comply with certain provisions of the New York insurance law relating to group insurance coverage; 2) that the insurer has lawfully issued the policy or contract in a jurisdiction where the insurer is authorized to do an insurance business; 3) that the insurer's website clearly states that the insurer is not authorized to transact the business of insurance in this state; and 4) that the insurer does not have any other contact with the employee, other than as specified in § 1101(b)(2) of the insurance law.
Section 1101(b)(2) of the current law already allows/facilitates enrollment by mail (snail or e-mail) of New York-based employees of out-ofstate employers covered under certain group insurance contracts issued by unauthorized insurers. The new paragraph (8) established pursuant to this bill will similarly allow internet enrollment under such circumstances, using largely the same standards as that which currently applies pursuant to the mail exception of subsection (b)(2).
Enactment of this bill will make it easier for New York-based employees to enroll under the group insurance contracts offered by their out-of state employer when such contracts are offered by an unauthorized insurer. This internet enrollment option will only be made available if the appropriate group insurance standards in the current New York insurance law apply, similarly to what is currently required when New York employees are enrolled under these circumstances via mail.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 6505 IN SENATE January 31, 2014 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to internet enrollment of employees THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The opening paragraph and subparagraph (D) of paragraph 1 of subsection (b) of section 1101 of the insurance law, the opening paragraph as amended by section 1 of part I of chapter 61 of the laws of 2011, are amended to read as follows: Except as OTHERWISE provided in
[paragraph two, three, three-a, or seven of]this subsection, any of the following acts in this state, effected by mail from outside this state or otherwise, by any person, firm, association, corporation or joint-stock company shall constitute doing an insurance business in this state and shall constitute doing business in the state within the meaning of section three hundred two of the civil practice law and rules: (D) doing any kind of business, including a reinsurance business, specifically recognized as constituting the doing of an insurance busi- ness within the meaning of this chapter; OR S 2. Subsection (b) of section 1101 of the insurance law is amended by adding a new paragraph 8 to read as follows: (8) NOTWITHSTANDING THE FOREGOING, THE MAINTENANCE OF A WEBSITE OUTSIDE THE STATE BY AN UNAUTHORIZED FOREIGN OR ALIEN INSURER DULY LICENSED TO TRANSACT THE BUSINESS OF INSURANCE IN AND BY THE LAWS OF ITS DOMICILE, BY WHICH A MEMBER OF A GROUP MAY SELF-ENROLL, THROUGH AN AUTO- MATED PROCESS, IN A GROUP LIFE, GROUP ANNUITY, OR GROUP ACCIDENT AND HEALTH INSURANCE POLICY OR CONTRACT, AS DEFINED IN PARAGRAPHS ONE, TWO, AND THREE OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED THIRTEEN OF THIS ARTICLE, SHALL NOT CONSTITUTE DOING AN INSURANCE BUSINESS IN THIS STATE, BUT SECTION ONE THOUSAND ONE HUNDRED THIRTEEN OF THIS ARTI- CLE NEVERTHELESS SHALL APPLY TO THE INSURER; PROVIDED THAT: (A) THE GROUP CONFORMS TO THE DEFINITION OF ELIGIBILITY CONTAINED IN:EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13607-01-4 S. 6505 2
(I) PARAGRAPH ONE, TWO, FOUR (WITH RESPECT TO A POLICY ISSUED TO A TRUSTEE OR TRUSTEES OF A FUND ESTABLISHED OR PARTICIPATED IN BY TWO OR MORE EMPLOYERS, ONE OR MORE LABOR UNIONS, OR BY ONE OR MORE EMPLOYERS OR LABOR UNIONS, PROVIDED THAT ALL SUCH EMPLOYERS OR LABOR UNIONS ARE IN THE SAME INDUSTRY), OR FIVE OF SUBSECTION (B) OF SECTION FOUR THOUSAND TWO HUNDRED SIXTEEN OF THIS CHAPTER; (II) SUBPARAGRAPH (A), (B), (C), OR (D) (WITH RESPECT TO A POLICY ISSUED TO A TRUSTEE OR TRUSTEES OF A FUND ESTABLISHED OR PARTICIPATED IN BY TWO OR MORE EMPLOYERS, ONE OR MORE LABOR UNIONS, OR BY ONE OR MORE EMPLOYERS OR LABOR UNIONS, PROVIDED THAT ALL SUCH EMPLOYERS OR LABOR UNIONS ARE IN THE SAME INDUSTRY) OF PARAGRAPH ONE OF SUBSECTION (C) OF SECTION FOUR THOUSAND TWO HUNDRED THIRTY-FIVE OF THIS CHAPTER; OR (III) PARAGRAPHS ONE, TWO, THREE, FOUR OR ELEVEN OF SUBSECTION (B) OF SECTION FOUR THOUSAND TWO HUNDRED THIRTY-EIGHT OF THIS CHAPTER, BUT NOT INCLUDING A GROUP ANNUITY CONTRACT: (I) FUNDING INDIVIDUAL RETIREMENT ACCOUNTS OR INDIVIDUAL RETIREMENT ANNUITIES, AS DEFINED IN SECTION FOUR HUNDRED EIGHT OF THE INTERNAL REVENUE CODE; (II) FUNDING ANNUITIES IN ACCORDANCE WITH SUBDIVISION (B) OF SECTION FOUR HUNDRED THREE OF SUCH CODE; OR (III) PROVIDING A PLAN OF RETIREMENT ANNUITIES UNDER WHICH THE PAYMENTS ARE DERIVED WHOLLY FROM FUNDS CONTRIBUTED BY THE PERSONS COVERED. (B) THE INSURER LAWFULLY ISSUED THE MASTER POLICY OR CONTRACT WITHOUT THIS STATE IN A JURISDICTION WHERE THE INSURER WAS AUTHORIZED TO DO AN INSURANCE BUSINESS; (C) THE INSURER'S WEBSITE CLEARLY STATES THAT THE INSURER IS NOT AUTHORIZED TO TRANSACT THE BUSINESS OF INSURANCE IN THIS STATE; AND (D) THE INSURER DOES NOT HAVE ANY OTHER CONTACT OR INTERACTION WITH THE MEMBER OTHER THAN AS SPECIFIED AND IN THE MANNER PROVIDED IN PARA- GRAPH TWO OF THIS SUBSECTION. S 3. This act shall take effect immediately.