S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2008
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 17, 2017
                                ___________
 
 Introduced by M. of A. HEVESI, McDONALD -- read once and referred to the
   Committee on Insurance
 
 AN  ACT to amend the insurance law, in relation to standards for prompt,
   fair and equitable payments of insurance commissions or other  compen-
   sation arrangements
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subsection (d) of section 2119 of  the  insurance  law,  as
 amended  by  chapter  687  of  the  laws  of 2003, is amended to read as
 follows:
   (d) (1) No insurance broker shall, in connection with the sale, solic-
 itation or negotiation, issuance, delivery or transfer in this state  of
 any  contract of insurance made or negotiated in this state, directly or
 indirectly charge, or receive from, the insured or  prospective  insured
 therein  any  greater sum than the rate of premium fixed therefor by the
 insurer obligated as such therein, unless such broker  has  a  right  to
 compensation  for services created in the manner specified in subsection
 (c) of this section.
   (2) THE PROVISIONS OF THIS SECTION SHALL APPLY  TO  ANY  PLACEMENT  OF
 MAJOR MEDICAL OR ANY OTHER COMPREHENSIVE TYPE OF HEALTH INSURANCE COVER-
 AGE  BY  AN  INSURANCE  BROKER  UNDER  CONTRACTS OR AGREEMENTS ISSUED OR
 ENTERED INTO BY A HEALTH PLAN PURSUANT  TO  THIS  ARTICLE  AND  ARTICLES
 FORTY-TWO,  FORTY-THREE  AND  FORTY-SEVEN  OF  THIS  CHAPTER AND ARTICLE
 FORTY-FOUR OF THE PUBLIC HEALTH LAW, INSIDE  OR  OUTSIDE  THE  NEW  YORK
 HEALTH BENEFIT EXCHANGE ESTABLISHED UNDER GOVERNOR'S EXECUTIVE ORDER NO.
 42  (2012)  TO  IMPLEMENT  APPLICABLE  PROVISIONS OF THE FEDERAL PATIENT
 PROTECTION AND AFFORDABLE CARE ACT, PUBLIC LAW 111-148 (42 USC  §  18001
 ET SEQ. (2010)).
   §  2.  The  insurance law is amended by adding a new section 3224-d to
 read as follows:
   § 3224-D. STANDARDS FOR PROMPT, FAIR AND EQUITABLE PAYMENTS OF  INSUR-
 ANCE COMMISSIONS OR OTHER COMPENSATION ARRANGEMENTS. NOTWITHSTANDING ANY
 OTHER  PROVISIONS OF THIS CHAPTER OR ANY OTHER GENERAL OR SPECIAL LAW TO
 THE CONTRARY, THIS SECTION IS INTENDED TO PROVIDE FOR PROMPT,  FAIR  AND
              

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02648-01-7

 A. 2008                             2
 
 EQUITABLE  PAYMENTS  OF  INSURANCE  COMMISSIONS  OR  OTHER  COMPENSATION
 ARRANGEMENTS TO  HEALTH  INSURANCE  PRODUCERS  FOR  PLACEMENT  OF  MAJOR
 MEDICAL  OR  ANY  OTHER  COMPREHENSIVE TYPE OF HEALTH INSURANCE COVERAGE
 UNDER  CONTRACTS  OR  AGREEMENTS ISSUED OR ENTERED INTO BY A HEALTH PLAN
 PURSUANT TO THIS ARTICLE AND ARTICLES FORTY-TWO, FORTY-THREE AND  FORTY-
 SEVEN  OF  THIS CHAPTER AND ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW,
 WHICH SHALL ADHERE TO THE FOLLOWING STANDARDS:
   (A) EXCEPT IN A CASE WHERE THE OBLIGATION OF A HEALTH PLAN TO  PAY  AN
 INSURANCE  COMMISSION  OR OTHER COMPENSATION ARRANGEMENT TO AN INSURANCE
 PRODUCER UPON RECEIPT OF PAYMENT OF PREMIUM OR OTHER CHARGE  FOR  PLACE-
 MENT  OF  MAJOR MEDICAL OR ANY OTHER COMPREHENSIVE TYPE OF HEALTH INSUR-
 ANCE COVERAGE IS NOT REASONABLY CLEAR, OR WHEN  THERE  IS  A  REASONABLE
 BASIS  SUPPORTED  BY  SPECIFIC  INFORMATION  AVAILABLE FOR REVIEW BY THE
 SUPERINTENDENT THAT SUCH PAYMENT OF PREMIUM OR OTHER CHARGE WAS  SUBMIT-
 TED  FRAUDULENTLY,  SUCH HEALTH PLAN SHALL PAY SUCH INSURANCE COMMISSION
 OR OTHER COMPENSATION ARRANGEMENT TO ANY SUCH INSURANCE PRODUCER  WITHIN
 FORTY-FIVE DAYS OF RECEIPT OF SUCH PAYMENT OF PREMIUM OR OTHER CHARGE.
   (B)  EACH  FAILURE  TO  TIMELY  PAY  AN  INSURANCE COMMISSION OR OTHER
 COMPENSATION ARRANGEMENT TO AN INSURANCE PRODUCER FOR PLACEMENT OF MAJOR
 MEDICAL OR ANY OTHER COMPREHENSIVE TYPE OF HEALTH INSURANCE COVERAGE  IN
 VIOLATION  OF  THIS  SECTION  SHALL  CONSTITUTE A SEPARATE VIOLATION. IN
 ADDITION TO THE PENALTIES PROVIDED IN THIS CHAPTER, ANY HEALTH PLAN THAT
 FAILS TO ADHERE TO THE STANDARDS CONTAINED  IN  THIS  SECTION  SHALL  BE
 OBLIGATED TO PAY TO AN INSURANCE PRODUCER INTEREST ON THE AMOUNT OF SUCH
 INSURANCE COMMISSION OR OTHER COMPENSATION ARRANGEMENT DUE AND OWING THE
 GREATER  OF  THE RATE EQUAL TO THE RATE SET BY THE COMMISSIONER OF TAXA-
 TION AND FINANCE FOR  CORPORATE  TAXES  PURSUANT  TO  PARAGRAPH  ONE  OF
 SUBSECTION  (E)  OF  SECTION  ONE  THOUSAND NINETY-SIX OF THE TAX LAW OR
 TWELVE PERCENT PER ANNUM, TO BE  COMPUTED  FROM  THE  DATE  PAYMENT  WAS
 REQUIRED TO BE MADE. WHEN THE AMOUNT OF INTEREST DUE ON ANY SUCH PAYMENT
 IS  LESS  THAN  TWO  DOLLARS, A HEALTH PLAN SHALL NOT BE REQUIRED TO PAY
 INTEREST ON SUCH PAYMENT.
   (C) THE PROVISIONS OF THIS SECTION SHALL APPLY  TO  ANY  PLACEMENT  OF
 MAJOR MEDICAL OR ANY OTHER COMPREHENSIVE TYPE OF HEALTH INSURANCE COVER-
 AGE  UNDER  CONTRACTS  OR  AGREEMENTS ISSUED OR ENTERED INTO BY A HEALTH
 PLAN PURSUANT TO THIS ARTICLE AND ARTICLES  FORTY-TWO,  FORTY-THREE  AND
 FORTY-SEVEN  OF THIS CHAPTER AND ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH
 LAW, INSIDE OR OUTSIDE THE NEW YORK HEALTH BENEFIT EXCHANGE  ESTABLISHED
 UNDER  GOVERNOR'S  EXECUTIVE ORDER NO. 42 (2012) TO IMPLEMENT APPLICABLE
 PROVISIONS OF THE FEDERAL PATIENT PROTECTION AND  AFFORDABLE  CARE  ACT,
 PUBLIC LAW 111-148 (42 USC § 18001 ET SEQ. (2010)).
   (D)  ANY  CONTRACT OR AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE
 DATE OF THIS SECTION BETWEEN A HEALTH PLAN  AND  AN  INSURANCE  PRODUCER
 THAT  ATTEMPTS TO ABROGATE, ALTER OR AMEND ANY OF THE PROVISIONS OF THIS
 SECTION, SHALL BE VOID AS AGAINST PUBLIC POLICY.
   (E) FOR PURPOSES OF THIS SECTION:
   (1) "HEALTH PLAN" SHALL MEAN AN INSURER OR ORGANIZATION OR CORPORATION
 LICENSED OR CERTIFIED PURSUANT TO ARTICLE FORTY-THREE OR FORTY-SEVEN  OF
 THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW; AND
   (2)  "INSURANCE  PRODUCER"  SHALL  MEAN  AN INSURANCE AGENT, INSURANCE
 BROKER OR INSURANCE CONSULTANT LICENSED PURSUANT TO  ARTICLE  TWENTY-ONE
 OF THIS CHAPTER.
   § 3. This act shall take effect immediately.