NY Ins L § 3442 (2021)
2021 New York Laws ISC - Insurance Article 34 - Insurance Contracts-Property/casualty 3442 - Credit Card, Debit Card, or Checking Account Group Policies.

§  3442.  Credit card, debit card, or checking account group policies. (a) For purposes of this section, unless the context requires otherwise:  (1) "Account group member" means a person:  (A) to whom a credit card account or debit card account is issued by a sponsor or who has agreed with the sponsor to  pay  obligations  arising from the use of a credit card or debit card issued to another person; or  (B) who may access by check an account maintained by the sponsor.  (2)   "Account   group   policy"   means  a  group  policy,  including certificates issued to the group members, where the group policyholders, and each additional group policyholder, if any, is:  (A) a sponsor and the policy's group members  are  its  account  group members  or other authorized users of the account group member's payment medium; or  (B) an interchange organization, or the trustee or trustees of a trust established,  or  participated  in,   by   one   or   more   interchange organizations or one or more sponsors who are members of the interchange organization,  where the policy's group members are the authorized users of the payment medium administered by the interchange organization or by its member sponsors.  (3) "Authorized user"  means  a  group  member  or  any  other  person designated  by  the  group  member  as an authorized user of the account group member's payment medium.  (4) "Beneficiary" means an authorized user of a payment medium or  any other  person  who  is a recipient of the benefits of the payment medium who is designated as  an  additional  insured  under  an  account  group policy.  (5)  "Certificate"  or  "certificate  of  insurance" means any policy, contract, or other  evidence  of  insurance,  or  rider  or  endorsement thereto, issued to a group member under an account group policy.  (6) "Check" means a check, draft, credit union share draft, negotiable order  of  withdrawal,  or other written, electronic or telephonic order but does not include a traveler's check.  (7)  "Commercial   creditor"   means   a   corporation,   partnership, association or other organization that, as part of its vocation, extends credit by making loans, issuing credit cards, or otherwise, including:  (A) a bank, trust company, savings bank, savings and loan association, or  credit  union,  as  those  terms  are  defined in section two of the banking law;  (B) a national bank, federal savings bank, federal  savings  and  loan association,  or  federal  credit  union,  as those terms are defined in title twelve of the United States Code;  (C) a foreign banking corporation licensed to  maintain  a  branch  or agency in New York under article five of the banking law or title twelve of the United States Code;  (D)  a creditor, as defined in section one thousand six hundred two of title fifteen of the United States Code;  (E) an issuer  of  a  credit  card,  within  the  meaning  of  article twenty-nine-A of the general business law;  (F)  a  transmitter of money, within the meaning of article thirteen-A of the banking law; or  (G) a retailer.  (8) "Conditional renewal" means change of limits, change  in  type  of coverage,  reduction or elimination of coverage, increased deductible or addition of exclusion, or increased premiums in excess  of  ten  percent (exclusive  of  any  premium increase generated as a result of increased exposure units or  as  a  result  of  experience  rating,  loss  rating, retrospective rating, or audit).  (9)  "Credit  card"  means  a  payment medium that takes the form of a credit card,  credit  plate,  charge  plate,  courtesy  card,  or  other identification  card  or device, issued by a sponsor to an account group member (or a check drawn by an authorized user against the  credit  card account),  which an authorized user may use to obtain a loan, credit, or cash advance, or to purchase, hire, rent or lease property or services.  (10) "Debit card" means a payment medium that  takes  the  form  of  a card, plate, or other identification card or device, issued by an issuer to  an  account  group  member  who  is  an  owner  of a deposit account maintained by the issuer, which an  authorized  user  drawing  upon  the deposit  account  may  use  to purchase, hire, rent or lease property or services. "Debit card" does not include a credit card or a check.  (11) "Group member" means an account group member who is insured under the account group policy.  (12) "Interchange organization" means  a  person  that  administers  a payment medium for the benefit of one or more sponsors and the sponsor's account group members.  (13) "Motor vehicle" means a motor vehicle as defined in section three hundred  eleven of the vehicle and traffic law, whether or not used on a public highway, and includes a snowmobile  as  defined  in  section  two thousand two hundred twenty-one of the vehicle and traffic law.  (14) "Payment medium" means a credit card, debit card or check.  (15)   "Person"  includes  an  individual,  corporation,  partnership, association, or other legal entity.  (16) "Sponsor" means:  (A) a commercial creditor that issues a credit card or debit  card  to its account group members;  (B)  a  commercial  creditor  that  maintains  an account which may be accessed by check by the commercial creditor's account group members; or  (C) the trustee or trustees of a trust  established,  or  participated in,  by  one  or  more  commercial  creditors  for  the  benefit  of the commercial creditor's account group members.  (b) An account group policy or certificate may be issued or issued for delivery in this state only in compliance with the  provisions  of  this section.  (c)  Coverage  under  an  account  group  policy  shall extend only to beneficiaries and shall be associated with the direct use or  employment of  a  payment  medium by an authorized user to purchase, hire, lease or rent property or services.  (d) An account group policy may  provide  only  one  or  more  of  the following   property/casualty   insurance   coverages,  subject  to  the following limitations:  (1) Loss of or damage to personal property, other than loss of use  or loss resulting from a defect in materials or workmanship, where:  (A) the article of personal property is owned by;  (i) an authorized user; or  (ii)  a  beneficiary  other  than  an  authorized user, if coverage is provided under the  account  group  policy  to  the  beneficiary  as  an additional insured;  (B)  the  article  of personal property is purchased using the account group member's payment medium;  (C) the amount of coverage is limited to the amount charged,  debited, or drawn, unless the insurer repairs or replaces the article of personal property, but in no event shall the coverage exceed ten thousand dollars per article and fifty thousand dollars in the aggregate per group member per policy year;  (D)  the period of coverage for each article of personal property does not exceed ninety days from date of purchase; and  (E) the coverage is  excess  over  any  other  valid  and  collectible insurance  covering  the  same article of personal property, except that the coverage need not be excess over insurance issued pursuant  to  this paragraph.  (2)  Obligation  to  a  person  engaged  in the business of renting or leasing motor vehicles, for loss of or damage to a motor vehicle  rented or leased from that person, where:  (A) the obligation is incurred by:  (i) an authorized user; or  (ii)  another  person  driving  the  motor vehicle with the authorized user's permission,  if  coverage  under  the  account  group  policy  is provided to such beneficiary as an additional insured;  (B)  the  rental or lease of the motor vehicle is paid wholly by means of the account group member's payment medium;  (C) the period of the rental or lease coverage does not exceed:  (i) forty-five consecutive days where the payment medium used for  the rental or lease was a credit card issued to an account group member that is an employee of a person that has contracted with a sponsor to provide credit cards to the person's employees primarily for business use; or  (ii) thirty-one consecutive days for all other authorized users;  (D)  the  coverage  is  excess  over  any  other valid and collectible insurance covering the same motor vehicle, except that the coverage  may be primary for motor vehicle rentals or leases:  (i)  when  the  motor  vehicle  is used outside the United States, its territories and possessions; or  (ii) where the payment medium used for  the  rental  or  lease  was  a credit  card  issued to an account group member that is an employee of a person that has contracted with a sponsor to provide credit cards to the person's employees primarily for business use; or  (E) the motor vehicle is rented or leased without a driver.  (3) Loss of, damage to, or loss of use of baggage  and  its  contents, where:  (A) (i) the authorized user owns or uses the baggage and its contents, and  the  loss,  damage,  or  loss  of use occurs in connection with the authorized user being in transit; or  (ii) a beneficiary other than an authorized  user  owns  or  uses  the baggage  and  its  contents, and the loss, damage, or loss of use occurs while in connection with that beneficiary being in transit, if  coverage under  the  policy  is  provided  in  regard  to  the  beneficiary as an additional insured;  (B) the account group  member's  payment  medium  is  used  to  obtain transportation  or  accommodations  for the owner of the baggage and its contents, in connection with that owner being in transit; and  (C) the amount of coverage does not exceed two  thousand  dollars  per bag,  including  contents, and ten thousand dollars in the aggregate for all insureds per trip.  (4) Loss of, damage to, or loss of use of personal property  resulting from a defect in materials or workmanship in that property, where:  (A) the article of personal property is owned by:  (i) an authorized user; or  (ii)  a  beneficiary  other  than  an  authorized user, if coverage is provided under the  account  group  policy  to  the  beneficiary  as  an additional insured;  (B)  the  article  of  personal  property is purchased by means of the account group member's payment medium;  (C) the amount of coverage is limited to the amount charged,  debited, or drawn, but in no event shall exceed ten thousand dollars; and  (D) the article of personal property has one or more warranties issued by a manufacturer, distributor or seller.  (5)  Loss of, damage to, or loss of use of personal property occurring in connection with the use of rented or leased motor vehicles where:  (A) the article of personal property is owned by:  (i) an authorized user; or  (ii) a beneficiary other  than  an  authorized  user  if  coverage  is provided  under  the  account  group  policy  to  the  beneficiary as an additional insured;  (B) the rental or lease of the motor vehicle is  paid  for  wholly  by means of the account group member's payment medium;  (C) the period of coverage does not exceed the lesser of:  (i) the rental or lease period; or  (ii) forty-five consecutive days where the payment medium used for the rental or lease was a credit card issued to an account group member that is  an  employee  of  an  entity  that  has contracted with a sponsor to provide credit cards to the entity's employees  primarily  for  business use; or thirty-one consecutive days for all other authorized users;  (D) the motor vehicle is rented or leased without a driver; and  (E) the amount of the coverage does not exceed five thousand dollars.  (6)  Losses  incurred  in  connection  with  the unauthorized use of a payment medium, where:  (A) one or more individuals  are  designated  authorized  users  of  a payment  medium by virtue of their status as employees of a group member in accordance with procedures  established  by  such  group  member  for authorized use of the payment medium;  (B)  the  group  member  that employs such authorized users has agreed with another group member to pay obligations arising  from  the  use  of such payment medium by such authorized users;  (C)  an  authorized  user uses such payment medium in a manner that is unauthorized by the group member that employs the authorized user;  (D) the obligation of the group member  that  employs  the  authorized users to such other group member, pursuant to the agreement described in subparagraph  (B)  of  this  paragraph for a loss incurred in connection with use in an unauthorized manner, is  discharged  by  payment  of  the insurance benefit to such other group member;  (E) the amount of coverage shall be limited to the amount of the loss, but in no event shall exceed fifteen thousand dollars; and  (F) for purposes of this paragraph only, the term "group member" shall include (i) those entities specified in subparagraphs (A) through (F) of paragraph  seven  of  subsection  (a) of this section which are insureds under the insurance described in subparagraph (D) of this paragraph, and (ii) employers of account group members who  are  designated  authorized users of a payment medium by virtue of their employee status.  (7)  Loss  resulting  from  an  inability  to use a ticket to an event where:  (A) the ticket was purchased with the account group  member's  payment medium;  (B)  the  event  does  not fully reimburse the person for the expenses disbursed or to be disbursed for the  ticket,  including  any  fees,  or provide a ticket of equal value or a rain check;  (C)  the amount of coverage is limited to the amount charged, debited, or drawn, but shall not exceed seven hundred fifty dollars  per  ticket; and  (D) the coverage is excess over any other reimbursement.  (8) Loss due to cancellation of a catered affair where:  (A)  the  expenses  were  paid  by means of the account group member's payment medium;  (B) the amount of coverage is limited to the amount charged,  debited, or  drawn,  but  shall  not exceed thirty thousand dollars in any twelve month period; and  (C) the coverage is excess over any other reimbursement.  (9)  Loss of tuition and other educational expenses due to a student's dismissal or withdrawal from an educational institution where:  (A) expenses were paid by means of the account group member's  payment medium;  (B)  the amount of coverage is limited to the amount charged, debited, or drawn, but shall not exceed sixty  thousand  dollars  in  any  twelve month period; and  (C) the coverage is excess over any other reimbursement.  (10)  Loss  resulting from the cancellation or interruption of a trip, where:  (A) coverage is limited to a specific trip;  (B) the trip was paid by means of the account group  member's  payment medium;  (C)  the amount of coverage is limited to the amount charged, debited, or drawn, but shall not exceed fifteen thousand dollars per trip; and  (D) the coverage is excess over any other reimbursement.  (11) Loss of or damage to personal property, where:  (A) (i) the authorized user owns or uses the  personal  property,  and the loss or damage occurs in connection with a specific trip; or  (ii)  a  beneficiary  other  than  an authorized user owns or uses the personal property, and the loss or damage occurs in  connection  with  a specific trip, if coverage is provided under the account group policy to the beneficiary as an additional insured;  (B)  the  trip was paid by means of the account group member's payment medium;  (C) the amount of coverage does not exceed one  thousand  dollars  per article of personal property, and five thousand dollars in the aggregate for all insureds per trip; and  (D)  the  coverage  is  excess  over  any  other valid and collectible insurance covering the same article of personal property.  (12) Loss of or damage to wireless communications equipment or loss of use resulting from a defect in  materials  or  workmanship  to  wireless communication equipment, where:  (A) the wireless communications equipment is owned or leased by;  (i) an authorized user; or  (ii)  a  beneficiary  other  than  an  authorized user, if coverage is provided under the  account  group  policy  to  the  beneficiary  as  an additional insured;  (B)  the  account  group member's payment medium is used to obtain the wireless services related to the wireless communication equipment;  (C) the amount of coverage does not exceed ten  thousand  dollars  per wireless  communications  equipment,  but in no event shall the coverage exceed fifty thousand dollars in the  aggregate  per  group  member  per policy year;  (D)  the  period  of coverage for the wireless communication equipment does not exceed 60 days from each date wireless  services  are  charged, debited, or drawn; and  (E)  For purposes of this paragraph, the term "wireless communications equipment"  shall  mean  wireless  handsets,  pagers,  personal  digital assistants,  wireless  telephones  or  wireless  telephone batteries and other wireless devices and accessories related to such devices that  are used  to  access  wireless communications services and includes wireless services.  (13) Coverages which,  in  the  opinion  of  the  superintendent,  are determined to be substantially similar to one of the foregoing coverages specified  in  paragraphs one through twelve of this subsection, or such other coverages that the superintendent determines are limited in scope, and  not  duplicative  or  a  substitute  for  other  more comprehensive coverages, and thereupon for purposes of this section shall be deemed to be   permissible   pursuant   to   regulations   promulgated   by    the superintendent.  (e)  (1)  An  account  group  policy  shall not cover a motor vehicle, except in regard to coverage under paragraph two of  subsection  (c)  of this section.  (2)  An  account  group policy shall not be considered a motor vehicle policy for purposes of this chapter.  (f) The premium for the account group policy, including  certificates, may be paid by the group policyholder from funds contributed:  (1) wholly by the group policyholder;  (2) wholly by the group members; or  (3) jointly by the group policyholder and group members.  (g)   (1)  Any  policy  dividend,  retrospective  premium  credit,  or retrospective premium refund in respect of premiums paid  by  the  group policyholder may:  (A)  be  applied  to  reduce  the  premium  contribution  of the group policyholder, but not in excess of the proportion to  its  contribution; or  (B) be retained by the group policyholder.  (2)   Any   policy   dividend,   retrospective   premium   credit,  or retrospective premium refund not distributed under paragraph one of this subsection shall be:  (A)  applied  to  reduce  future  premiums  and,  accordingly,  future contributions, of existing or future group members, or both; or  (B)  paid  or  refunded to those group members insured on the date the payment or refund is made to the group policyholder, if  distributed  by the  group  policyholder,  or  on  the  date  of mailing, if distributed directly by the insurer, subject to the following requirements:  (i) the insurer shall be responsible for determining the allocation of the payment or refund to the group members;  (ii) if the group policyholder distributes the payment or refund,  the insurer  shall be responsible for audit to ascertain that the payment or refund is actually made in accordance with the allocation procedure; and  (iii) if the group policyholder fails to make the payment  or  refund, the  insurer shall make the payment or refund directly or use the method provided in subparagraph (A) of this paragraph.  (3) Notwithstanding paragraphs one and two of this  subsection,  if  a dividend  accrues  upon  termination  of coverage under an account group policy, the premium for which was paid out of funds contributed by group members specifically for the coverage, the dividend  shall  be  paid  or refunded  by  the group policyholder to the group members insured on the date the payment or refund is made to the  group  policyholder,  net  of reasonable  expenses  incurred  by  the  group policyholder in paying or refunding the dividend to such group members.  (4) For the purposes of this subsection, "dividend" means a return  by an insurer to a group policyholder of excess premiums paid by that group policyholder   in   light   of   favorable  loss  experience,  including retrospective premium credits or retrospective premium refunds. The term "dividend" does not include reimbursements or fees received by  a  group policyholder  in  connection  with the operation or administration of an account group policy, including administrative reimbursements, fees  for  services  provided  by  the group policyholder, or transactional service fees.  (h)  The  insurer must treat in like manner all eligible account group members of the same class and account status.  (i) The group shall consist of at least one thousand members.  (j) An account group policy or certificate shall not be  eligible  for placement  by  an  excess  line  broker  licensed  pursuant  to  article twenty-one of this chapter.  (k) Coverage provided under an account  group  policy  or  certificate issued  pursuant  to  paragraph  four  of subsection (d) of this section shall be deemed  miscellaneous  property  insurance,  as  enumerated  in paragraph  five  of  subsection  (a) of section one thousand one hundred thirteen of this chapter.  (l) (1) The insurer shall be responsible for the mailing  or  delivery of  a  certificate  of  insurance to each group member insured under the account group policy. The insurer shall  also  be  responsible  for  the mailing  or  delivery  to each group member of an amended certificate of insurance, or endorsement to the certificate, whenever there is a change of  limits;  change  in  type  of  coverage;  addition,  reduction,   or elimination  of  coverage;  or  addition of exclusion, under the account group policy or certificate.  (2) The certificate shall contain in substance all material terms  and conditions  of coverage afforded to the group member, unless the account group policy is incorporated by reference and a copy of the group policy accompanies the certificate.  (3) If coverage afforded to  the  group  member  is  excess  of  other applicable  insurance  coverage,  the certificate shall contain a notice advising the group member  that,  if  the  member  has  other  insurance coverage,  specified  coverages  under  the account group policy will be excess over the other insurance.  (m) A group policyholder shall comply with the provisions  of  section two  thousand one hundred twenty-two of this chapter, in the same manner as an agent or broker, in any advertisement, sign,  pamphlet,  circular, card,  or  other  public  announcement  referring  to  coverage under an account group policy or certificate.  (n) An account group policy or certificate shall  not  be  subject  to section  three  thousand  four  hundred  twenty-five  or  section  three thousand  four  hundred  twenty-six  of  this  article.  The   following requirements shall apply in regard to termination of coverage:  (1)  (A) An account group policy or certificate may be cancelled by an insurer only if cancellation is based on one or more of the reasons  set forth  in  subparagraphs (A) through (D) or (F) through (H) of paragraph one of subsection (c) of section three thousand four hundred  twenty-six of  this  article; provided, however, that an act or omission by a group member  which  would  constitute  the  basis  for  cancellation  of   an individual  certificate  shall not constitute the basis for cancellation of the account group policy.  (B) Where the premium is derived wholly from funds contributed by  the group  policyholder,  an  individual certificate may be cancelled by the insurer only if cancellation is based on one or more of the reasons  set forth in subparagraph (B), (C) or (H) of paragraph one of subsection (c) of section three thousand four hundred twenty-six of this article.  (2)  (A)  An  insurer's  cancellation  of  an  account  group  policy, including all certificates, shall not  become  effective  until  fifteen days  after the insurer mails or delivers written notice of cancellation to the group policyholder at the mailing address shown in the policy.  (i) Where all or part of the premium is derived from funds contributed by a group member specifically  for  the  coverage,  written  notice  of  cancellation  of  the  account  group  policy  shall  also  be mailed or delivered by the insurer to the  group  member  at  the  group  member's mailing address.  (ii)  Where none of the premium is derived from funds contributed by a group member specifically for the coverage, the group policyholder shall mail or deliver written notice to the group member  advising  the  group member of the cancellation of the account group policy and the effective date of cancellation. The written notice shall be mailed or delivered by the  group  policyholder  within  ninety  days after receiving notice of cancellation from the insurer.  (B) An insurer's cancellation of an individual certificate  shall  not become  effective until fifteen days after the insurer mails or delivers written notice of cancellation to the group member at the group member's mailing address and to the group policyholder  at  the  mailing  address shown in the account group policy.  (C)  (i)  A  group  policyholder  may  cancel an account group policy, including all certificates,  or  any  individual  certificate,  for  any reason  upon  thirty  days  written notice to the insurer and each group member; and  (ii) The group policyholder shall mail or deliver  written  notice  to each  affected  group member of the group policyholder's cancellation of the account group policy  or  certificate  and  the  effective  date  of cancellation.  Such  written  notice shall be mailed or delivered to the group member's mailing  address  at  least  thirty  days  prior  to  the effective date of the cancellation.  (3)  (A)  Unless  an account group policy provides for a longer policy period, the policy and all certificates shall be issued or renewed for a one-year policy period.  (B) The group policyholder shall be  entitled  to  renew  the  account group  policy  and  all  certificates upon timely payment of the premium billed to the group policyholder for the renewal, unless:  (i) the insurer mails or delivers to the group  policyholder  and  all group members written notice of nonrenewal, or conditional renewal; and  (ii)  the  written  notice is mailed or delivered at least thirty, but not more than one hundred twenty  days  prior  to  the  expiration  date specified  in  the  policy  or,  if  no  date  is  specified,  the  next anniversary date of the policy.  (C) Notwithstanding subparagraph (A) of  this  paragraph,  an  account group  policy insuring an experimental program that is test marketed for a period of one hundred twenty days or  less  may  be  issued  for  that policy  period.  The  provisions  of  subparagraph (B) of this paragraph shall not apply if the group members were  previously  notified  of  the expiration date of the account group policy.  (4)  (A)  Where  the  account  group policy is nonrenewed by the group policyholder, the group  policyholder  shall  mail  or  deliver  written notice  to  each group member advising the group member of nonrenewal of the account group policy and  the  effective  date  of  nonrenewal.  The written notice shall be mailed or delivered by the group policyholder at least thirty days prior to the nonrenewal.  (B)  The  provisions  of  subparagraph (A) of this paragraph shall not apply in the case of  a  sponsor's  nonrenewal  in  connection  with  an account  group policy insuring an experimental program test marketed for a period of one hundred twenty days or less, if the group  members  were previously notified of the expiration date of the account group policy.  (5)  Every  notice of cancellation, nonrenewal, or conditional renewal shall  contain  the  specific  reason  or  reasons   for   cancellation, nonrenewal, or conditional renewal.  (6) (A) An insurer shall not be required under this subsection to give notice  to  a group member if the insurer has been advised by either the group  policyholder  or  another  insurer  that  substantially   similar coverage  has  been  obtained  from  the  other insurer without lapse of coverage.  (B)  A  group policyholder shall not be required under this subsection to give notice to a group member if substantially similar  coverage  has been obtained from another insurer without lapse of coverage.  (7)  (A)  If, prior to the effective date of cancellation, nonrenewal, or conditional renewal of the account group policy,  or  a  certificate, whether  initiated  by  the  insurer, group policyholder or by the group member in regard to the group member's  certificate,  coverage  attaches pursuant  to the terms of an account group policy providing insurance of one or more of the types enumerated in this section, then  the  coverage shall be effective until expiration of the applicable period of coverage provided  in  the account group policy notwithstanding the cancellation, nonrenewal or conditional nonrenewal of the account group policy.  (B) Notwithstanding subparagraph (A) of this paragraph, an insurer may terminate coverage under an individual certificate on the effective date of cancellation, if the certificate is cancelled in accordance with  the provisions of subparagraph (B) of paragraph one of this subsection.  (o)  The  superintendent  may,  pursuant  to  regulation,  adjust  the monetary limitations set forth in subsection (d)  of  this  section  for inflation.