2023 New York Laws › ISC - Insurance › Article 31 - Insurance Contracts - General › 3102 - Requirements for the Use of Readable and Understandable Insurance Policies.

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