N.Y. ISC Law § 5504 — New York Code / Act ISC / Article 55 / Section 5504
Policies
Status: in_force

§ 5504. Policies. (a) No policy form shall be used by the association\nunless it has been filed with the superintendent and either he has\napproved it, or thirty days have elapsed and he has not disapproved it\nas misleading or violative of public policy.\n  (b) (1) Except as provided in paragraph two of this subsection, no\ncancellation notice or nonrenewal notice shall be effective unless the\nassociation at least forty-five days prior to the effective date of such\ncancellation or the end of the policy period, as the case may be, mails\nor delivers such notice to the insured at the address shown on the\npolicy and to such insured's licensed representative.\n  (2) Where the cancellation is for nonpayment of premium or loss of\nlicense to practice or, if the insured is a hospital, it no longer\npossesses a valid operating certificate under section twenty-eight\nhundred one-a of the public health law, such cancellation notice must be\nmailed or delivered at least fifteen days prior to the effective date of\nthe cancellation.\n  (3) Upon written request by an insured or such insured's licensed\nrepresentative, the association shall mail or deliver loss information\nas provided in subsection (g) of section three thousand four hundred\ntwenty-six of this chapter to such insured or such insured's licensed\nrepresentative within ten business days of such request.\n  (4) All cancellation notices or nonrenewal notices shall state the\ngrounds upon which the policy is cancelled or nonrenewed and that, upon\nwritten request of an insured or such insured's licensed representative,\nthe association will furnish the facts on which the cancellation or\nnonrenewal is based. Grounds for nonrenewal shall be limited to the same\ngrounds as for cancellation. All cancellation notices or nonrenewal\nnotices shall also provide or be accompanied by a statement advising the\ninsured of the availability of the loss information specified in\nsubsection (g) of section three thousand four hundred twenty-six of this\nchapter.\n  (c) A policy of insurance issued by the association may be terminated\nother than for non-payment of premiums if the insured:\n  (1) Is not complying substantially with any term or condition of such\ncontract.\n  (2) Has knowingly made, or caused to be made, any false statement or\nmisrepresentation of a material fact for use in applying for insurance.\n  (3) Has failed to pay to the association all stabilization reserve\nfund charges.\n  (d) Any termination shall apply to care or services provided after the\neffective date of termination, except that insurance coverage may\ncontinue for up to thirty days after termination with respect to care or\nservices to patients which are a continuation of a treatment begun prior\nto the effective date of termination.\n  (e) Policies issued by the association shall provide at the insured's\noption for deductibles and for co-insurance. An applicant electing an\noption for a deductible or for co-insurance shall have the right to\npurchase an option under which the association shall not settle any\nclaim under the policy without the consent of the insured. Any policy\nissued by the association without a deductible or co-insurance shall\nprovide that the association shall have the sole authority to settle any\nclaim up to policy limits without the consent of the insured.\n  (f) (1) The association shall issue or renew policies of medical\nmalpractice insurance for physicians on a claims-made or occurrence\nbasis, as prescribed by the superintendent by regulation.\n  (2) A claims-made policy shall contain the following provisions:\n  (A) if the insured has purchased a claims-made policy from an admitted\ninsurer or the association for a period of five or more consecutive\nyears and the insured, after attaining the age of sixty-five or older,\nretires permanently and totally from the practice of medicine or if the\ninsured has purchased a claims-made policy for a period of ten or more\nconsecutive years and the insured, after attaining the age of fifty-five\nor older, retires permanently and totally from the practice of medicine,\nthe association shall, without charging an additional premium therefor\nat the time of, or subsequent to, such retirement, also cover all\noccurrences between the inception date of the first such consecutive\npolicy from such association and such retirement date which, subsequent\nto the termination date, are reported in accordance with statutory and\npolicy requirements;\n  (B) if the insured dies or becomes permanently disabled and unable to\npractice medicine while covered by such policy the association shall,\nwithout charging an additional premium therefor at the time of, or\nsubsequent to, such event, also cover all occurrences between the\ninception date of the first such consecutive policy from such\nassociation and the death or disability of the insured, and\n  (C) the association shall make available and shall advise the insured\nof the availability and cost of coverage for occurrences between the\ninception date of the first such consecutive policy from such\nassociation and the termination of such policy which, subsequent to the\ntermination date, are reported in accordance with statutory and policy\nrequirements, pursuant to such terms and conditions as may be specified\nby the superintendent by regulation. The insured shall have the option\nof purchasing such coverage either in a single payment or in three\nannual installments with an additional finance charge.\n  (3) Such regulation shall also provide that if the coverage of an\ninsured who continues to practice in this state is transferred from an\nadmitted insurer or the association to another admitted insurer or the\nassociation without any gap in coverage, the former entity shall pay\nover to the successor an actuarially appropriate dollar amount to\nprovide for the requirements of paragraph two of this subsection, and\nthe insured shall be entitled to the benefits of this provision as if\nsuch insured had been continuously covered by the successor entity\nduring the entire period of consecutive years of coverage.\n  (4) Such regulation shall also provide that if the coverage of an\ninsured is transferred from the association, if the association is in\nliquidation, to an admitted insurer not in liquidation without any gap\nin coverage, then the successor entity shall accept the amounts payable\nfrom the property-casualty insurance security fund as provided in\nsubparagraph (G) of paragraph one of subsection (a) of section seven\nthousand six hundred three of this chapter, to provide for the\nrequirements of paragraphs two and three of this subsection, and the\ninsured shall be entitled to the benefits of such paragraphs as if such\ninsured had been continuously covered by the successor entity during the\nentire period of consecutive years of coverage.\n  (5) The association may issue a claims-made policy with more liberal\npolicy provisions than are required in this subsection, subject to the\napproval of the superintendent. Such liberal policy provisions may\ninclude but shall not be limited to a provision which, for all of the\npolicyholders of the association, grants credits toward the cost of\ncoverage provided in paragraph two of this subsection in proportion to\nthe number of years the insured has purchased a claims-made policy.\n