NY Ins L § 3454 (2021)
2021 New York Laws ISC - Insurance Article 34 - Insurance Contracts-Property/casualty 3454 - Sponsored Group Personal Insurance.

§  3454.  Sponsored group personal insurance. (a) For purposes of this section, the following definitions shall apply:  (1) "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 a group policy.  (2) "Conditional renewal" means any 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  experience rating, loss rating or retrospective rating).  (3)   "Personal  excess  insurance"  means  insurance  as  defined  in paragraph thirteen or fourteen of subsection (a) of section one thousand one hundred thirteen of this chapter, written  as  an  excess  insurance policy.  (4)  "Personal  property floater insurance" means insurance as defined in subparagraph (C) of paragraph seven of subsection (a) of section  one thousand one hundred thirteen of this chapter.  (5)  "Group  policy" means a group insurance policy providing personal excess  insurance,  personal  property   floater   insurance,   renters' insurance,  and  vintage  vehicle insurance, or any combination thereof, insuring sponsor group members.  (6) "Group policyholder" means a sponsor.  (7) "Renters' insurance" means insurance insuring residential property tenants, housing cooperative shareholders, or condominium owners against the contingencies described in subparagraphs (A), (B) and  (C),  or  (B) and  (C)  of  paragraph  two of subsection (a) of section three thousand four hundred twenty-five of this article.  (8) "Vintage  vehicle  insurance"  means  insurance  insuring  against losses or liabilities arising out of the ownership, operation, or use of a  motor vehicle, and covering a motor vehicle that is antique, classic, or made from a kit. For the purposes of this paragraph:  (A) an "antique" motor vehicle means a private passenger motor vehicle that is at least twenty-five years old, and is maintained primarily  for use  in  exhibitions,  club  activities,  parades, or other functions of public interest, and occasionally used for other purposes; and  (B) a "classic" motor vehicle is a  private  passenger  motor  vehicle that  is at least ten years old, may be used on a regular basis, and the motor vehicle's value is significantly higher than the average value  of other motor vehicles of the same make and model year.  (9) "Sponsor" means:  (A) an association, organization, labor union, federation, fraternity, club or similar entity:  (i)  in  which  the  members  are  engaged  in  a  common  pursuit  or enterprise;  (ii) that was formed for purposes other than obtaining insurance;  (iii) that has been in existence for more than three years;  (iv) that has twenty-five or more members; and  (v) that has adopted by-laws or similar governance rules, and a method to enroll or register members; or  (B) a bank, corporation, partnership, trust company, or trustee  of  a trust  that  owns  twenty-five  or more residential properties or living units or a tenants' association,  condominium  association,  or  similar organization,  with  respect  to  renters'  insurance sold to lessees or occupants of residential properties or living units owned by  the  bank, corporation,  partnership  or  trust, or who are members of the tenants' association, condominium association, or similar organization.  (10) "Sponsor group member" means:  (A) an enrolled member, officer, or director of a sponsor;  (B) any domestic partner of the enrolled member, officer, or director;  (C) any person related to the enrolled member, officer, or director by blood,  marriage, adoption, or operation of law, who resides in the same household (including a ward or foster child) or who is a dependent child away at school; or  (D) a lessee or occupant of a  residential  property  or  living  unit owned  by  a  bank,  corporation,  partnership  or  trust when the bank, corporation, partnership, trust company, or trustee of the trust is  the sponsor,  or  when  the  sponsor  is a tenants' association, condominium association, or similar organization.  (b) A group policy written pursuant to this section may be  issued  or issued for delivery in this state only in compliance with the provisions of this section.  (c) The premium for the group policy, including certificates, shall be paid by the sponsor group members. An insurer shall not provide coverage in regard to a group policy that requires the purchase of insurance as a condition  of  sponsor  group  membership  or imposes any penalty upon a sponsor group member if the  sponsor  group  member  does  not  purchase insurance.  If  so  authorized  by  the  insurer,  the sponsor group may aggregate the group members' premiums and remit them to the  insurer  or to  the  licensed  insurance  agent  or  broker representing the sponsor group. If an insurer authorizes a sponsor group to aggregate  and  remit the premiums of sponsor group members, then payment to the sponsor group by a sponsor group member shall be deemed to be payment to the insurer.  (d)   (1)  Any  policy  dividend,  retrospective  premium  credit,  or retrospective premium refund not distributed shall be:  (A)  applied  to  reduce  future  premiums  and,  accordingly,  future contributions, of existing or future group sponsor members, or both; or  (B)  paid  or  refunded  to those sponsor 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 sponsor 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.  (2)  Notwithstanding  paragraph  one of this subsection, if a dividend accrues upon termination of coverage under  a  group  policy,  then  the group policyholder shall pay or refund the dividend to the sponsor group members  insured  on the date the payment or refund is made to the group policyholder.  (e) The insurer shall treat in like manner all eligible sponsor  group members of the same class and sponsor status.  (f)  A  group  policy  or certificate written pursuant to this section shall not be eligible for placement by an excess  line  broker  licensed pursuant to article twenty-one of this chapter.  (g)  A  group  policy  written  pursuant to this section shall provide separate limits of coverage under the certificate issued  to  a  sponsor group member.  (h)(1) The insurer shall be responsible for the mailing or delivery of a  certificate  of  insurance to each sponsor group member insured under the group policy. The insurer also shall be responsible for the  mailing or  delivery  to each sponsor group member of any 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 an exclusion, under the group policy  or  certificate.  If  so  authorized by the insurer, the sponsor group may mail or deliver certificates, endorsements and other  coverage notices to the sponsor group members on behalf of the insurer.  (2)  The certificate shall contain in substance all material terms and conditions of coverage afforded to the sponsor group member, unless  the group policy is incorporated by reference and a copy of the group policy accompanies the certificate.  (3)  If  the  coverage afforded to a sponsor group member is excess of other applicable insurance coverage, then the certificate shall  contain a notice advising the sponsor group member that, if the member has other insurance  coverage, specified coverages under the group policy shall be excess over the other insurance.  (i) 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  insurance  producer,  in  any  advertisement,  sign,   pamphlet, circular, card, or other public announcement referring to coverage under a group policy or certificate.  (j)  A  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) An insurer may cancel  a  group  policy  or  certificate  only  if cancellation  is  based  on  one  or  more  of  the reasons set forth in 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  sponsor  group  member  that  would  constitute  the  basis   for cancellation of an individual certificate shall not constitute the basis for cancellation of the group policy.  (2)(A)  An  insurer's  cancellation  of  a group policy, including all certificates, shall not  become  effective  until  forty-five  days,  or twenty  days  if  based  upon  non-payment of premium, after the insurer mails  or  delivers  written  notice  of  cancellation  to   the   group policyholder  at  the  mailing  address  shown in the policy, and to the sponsor group member at the sponsor group member's mailing address.  (B) An insurer's cancellation of an individual certificate  shall  not become  effective  until  forty-five  days  after  the  insurer mails or delivers written notice of cancellation to the sponsor group  member  at the sponsor group member's mailing address and to the group policyholder at the mailing address shown in the group policy.  (C)  (i) A group policyholder may cancel a group policy, including all certificates, or any individual certificate, for any reason, upon ninety days written notice to the insurer and each sponsor group member.  (ii) The group policyholder shall mail or deliver  written  notice  to each  affected  group member of the group policyholder's cancellation of the group policy or certificate and the effective date of  cancellation. The  group  policyholder shall mail or deliver the written notice to the sponsor group member's mailing address at least ninety days prior to the effective date of the cancellation.  (3)(A) Unless the 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  sponsor  group  member  shall  be  entitled  to  renew   the certificate  upon  timely  payment  of the premium billed to the sponsor group member for the renewal, unless:  (i) the insurer mails or delivers to the sponsor group member  written notice of nonrenewal or conditional renewal; and  (ii) the insurer mails or delivers written notice at least ninety, but not  more  than  two  hundred  forty  days  prior to the expiration date specified in the policy or, if the policy does not specify a date,  then the next anniversary date of the policy.  (4) Where the group policyholder nonrenews the group policy, the group policyholder  shall mail or deliver written notice to each sponsor group member advising the sponsor group member  of  nonrenewal  of  the  group policy  and  the  effective  date of nonrenewal. The group policy holder shall mail or deliver the written notice at least ninety days  prior  to the nonrenewal.  (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 sponsor 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 sponsor group member if substantially similar coverage has been obtained from another insurer without lapse of coverage.  (k) If an insurer cancels or  nonrenews  a  renters'  insurance  group policy,  then  the  insurer  shall  offer to convert a certificate to an individual insurance policy, using the insurer's filed rates  and  forms for  individual  policies, for any remaining part of the required policy period set forth in section three thousand four hundred  twenty-five  of this article.