N.Y. ISC Law § 3102 — New York Code / Act ISC / Article 31 / Section 3102
Requirements for the use of readable and understandable insurance policies
Status: in_force

§ 3102. Requirements for the use of readable and understandable\ninsurance policies. (a) Definitions. In this section "insurance policy"\nmeans any:\n  (1) form subject to approval under either section three thousand two\nhundred one or four thousand three hundred eight of this chapter;\n  (2) comprehensive health services plan as defined in section four\nthousand four hundred one of the public health law;\n  (3) contract of insurance for owners of dwellings consisting of not\nmore than four dwelling units, and for household furnishings and\npersonal property contained in any household unit, written for a\ndivisible or indivisible premium which provides coverage for the peril\nof fire and extended coverage with or without any other kind of\ninsurance as provided pursuant to subsection (a) of section one thousand\none hundred thirteen of this chapter;\n  (4) contract of insurance insuring against losses or liabilities\narising out of the ownership, operation, or use of a motor vehicle\npredominantly used for non-business purposes, when a natural person is\nthe named insured.\n  (b) Exclusions. (1) This section shall not apply to:\n  (A) any insurance policy which has been determined to be a security\nsubject to federal jurisdiction;\n  (B) certificates issued pursuant to a group life or accident and\nhealth insurance policy or group annuity contract issued to an employer\ncovering persons employed in more than one state;\n  (C) any group insurance policy covering a group of one hundred or more\nlives, other than dependents, at date of issue, and a group credit life\ninsurance policy or a group credit accident and health insurance policy;\nprovided, however, this shall not exempt any certificate issued pursuant\nto a group insurance policy delivered or issued for delivery in this\nstate;\n  (D) any group annuity contract which serves as a funding vehicle for\npension, profit sharing or deferred compensation plans; provided,\nhowever, this shall not exempt any certificate issued pursuant to such\ngroup annuity contract;\n  (E) any insurance policy of life and accident and health insurance\nused in connection with, as a conversion from, as an addition to, or in\nexchange pursuant to a contractual provision for, an insurance policy\napproved prior to October first, nineteen hundred eighty-two;\n  (F) the renewal of an insurance policy of life and accident and health\ninsurance made, issued or delivered on a form provided prior to October\nfirst, nineteen hundred eighty-two;\n  (G) any insurance policy issued pursuant to article sixty-three of\nthis chapter;\n  (H) any funding agreement issued pursuant to section three thousand\ntwo hundred twenty-two of this chapter; or\n  (I) any service contract issued pursuant to article seventy-nine of\nthis chapter.\n  (2) No other statute of this state or provision of this chapter\nestablishing language simplification standards shall apply to any\ninsurance policy.\n  (3) Any non-English language insurance policy made, issued or\ndelivered in this state on a risk located or resident in this state\nshall be deemed to be in compliance with subparagraph (D) of paragraph\none of subsection (c) of this section if the insurer certifies that such\ninsurance policy is translated from an English language insurance policy\nwhich does comply with such subparagraph.\n  (c) Readability requirements. (1) In addition to any other\nrequirements of law, no insurance policy, except as set forth in\nsubsection (b) of this section, shall be made, issued or delivered in\nthis state on a risk located or resident in this state, unless:\n  (A) it is written in a clear and coherent manner;\n  (B) wherever practicable, it uses words with common and everyday\nmeanings to facilitate readability and to aid the insured or\npolicyholder in understanding the coverage provided;\n  (C) it has been filed with and approved by the superintendent;\n  (D) the text achieves a minimum score of forty-five on the Flesch\nreading ease test or an equivalent score on any other comparable test as\nprovided in paragraph three of this subsection;\n  (E) it is printed, except for specification pages, schedules and\ntables, in not less than ten point type, and except for applications,\nspecification pages, schedules and tables, such type is at least one\npoint leaded;\n  (F) it is appropriately divided and captioned and presented in\nmeaningful sequence; each section to contain an underlined, boldface or\notherwise conspicuous title or caption at the beginning that indicates\nthe nature of the subject matter included in or covered by the section;\n  (G) it contains a table of contents or an index of the principal\nsections of the insurance policy if the insurance policy has more than\nthree thousand words or if the insurance policy has more than three\npages regardless of the number of words;\n  (H) it has margins that are adequate for the purposes of readability;\nand\n  (I) it is printed in such manner that it includes sufficient contrast\nof ink and paper to be legible.\n  (2) For the purposes of this subsection, a Flesch reading ease test\nscore shall be measured by the following method:\n  (A) For an insurance policy containing ten thousand words or less of\ntext, the entire form shall be analyzed. For an insurance policy\ncontaining more than ten thousand words, the readability of two hundred\nword samples per page may be analyzed instead of the entire form. The\nsamples shall be separated by at least twenty printed lines.\n  (B) The number of words and sentences in the text shall be counted and\nthe total number of words divided by the total number of sentences. The\nfigure obtained shall be multipled by a factor of 1.015.\n  (C) The total number of syllables shall be counted and divided by the\ntotal number of words. The figure obtained shall be multiplied by a\nfactor of 84.6.\n  (D) The sum of the figures computed under subparagraphs (B) and (C)\nhereof subtracted from 206.835 equals the Flesch reading ease score for\nthe insurance policy.\n  (E) For purposes of subparagraphs (B), (C) and (D) hereof, the\nfollowing procedures shall be used:\n  (i) a contraction, hyphenated word, or numbers and letters, when\nseparated by spaces, shall be counted as one word;\n  (ii) a unit of words ending with a period, semicolon, or colon, but\nexcluding headings and captions, shall be counted as a sentence; and\n  (iii) a syllable means a unit of spoken language consisting of one or\nmore letters of a word as divided by an accepted dictionary. Where the\ndictionary shows two or more equally acceptable pronunciations of a\nword, the pronunciation containing fewer syllables may be used.\n  (F) In this subsection "text" includes all printed matter except the\nfollowing:\n  (i) the name and address of the insurer; the name, number or title of\nthe policy; the table of contents or index; captions and subcaptions;\nspecification pages, schedules or tables; and\n  (ii) any language which is drafted to conform to the requirements of\nany state or federal law, regulation or agency interpretation; any\nlanguage required by any collectively bargained agreement; any medical\nterminology; and words which are defined in the insurance policy; and\nany language required by law or regulation; provided, however, the\ninsurer identifies the language or terminology excepted by this\nsubparagraph and certifies in writing that the language or terminology\nis entitled to be excepted by this subparagraph.\n  (3) Any other reading test may be designated by the superintendent for\nuse as an alternative to the Flesch reading ease test.\n  (4) Filings subject to this subsection shall be certified by an\nofficer of the insurer that they meet the minimum reading ease score on\nthe test used or state that the score is lower than the minimum required\nbut should be approved in accordance with subsection (d) of this\nsection. To confirm the accuracy of any certification, the\nsuperintendent may require the submission of further information to\nverify the certification in question.\n  (5) At the option of the insurer, riders, endorsements, applications\nand other forms may be scored as separate forms or as part of the\ninsurance policy with which they may be used.\n  (d) Lower score permitted. The superintendent may authorize a lower\nscore than the Flesch reading ease score required in subparagraph (D) of\nparagraph one of subsection (c) of this section whenever, in the\nsuperintendent's sole discretion, he finds that a lower score:\n  (1) nevertheless reflects a readable and an understandable insurance\npolicy which is consistent with the purposes of this section;\n  (2) is warranted by the nature of a particular insurance policy or\ntype or class of insurance policies; or\n  (3) is caused by certain language which is drafted to conform to the\nrequirements of any state law, regulation, agency or departmental\ninterpretation.\n  (e) Other laws. (1) Any insurance policy meeting the requirements of\nsubparagraphs (D) through (I) of paragraph one of subsection (c) of this\nsection may be approved notwithstanding the provisions of any other laws\nwhich specify the content of insurance policies, if in the opinion of\nthe superintendent the insurance policy provides the policyholders and\nclaimants protection not less favorable than they would be entitled to\nunder such laws.\n  (2) This section shall not prohibit the use of words or phrases or\ncontractual provisions required by state or federal law, rule or\nregulation or by a governmental instrumentality or by any collectively\nbargained agreement.\n  (f) Prohibition of non-conforming policies. Except as provided in\nsubsection (b) of this section:\n  (1) no insurance policy described in paragraph one or two of\nsubsection (a) of this section shall be made, issued or delivered in\nthis state on a risk located or resident in this state, unless the\npolicy complies with the requirements of this section;\n  (2) no insurance policy described in paragraph three or four of\nsubsection (a) of this section and no renewal or extension certificate\nin connection therewith shall be made, issued or delivered in this state\nunless the insurance policy complies with the requirements of this\nsection.\n