The Office of General Counsel issued the following informal opinion on July 10, 2000, representing the position of the New York State Insurance Department.
RE: Article 77 ("The Life Insurance Company Guaranty Corporation of New York Act") and Long Term Care Insurance
Questions Presented:
1. Does Article 77, "The Life Insurance Company Guaranty Corporation of New York Act" (hereinafter "LICGC") protect Long Term Care Insurance (hereinafter "LTC") policyholders?
2. Is ABC Life Insurance Company of NY (hereinafter "ABC") a company covered under the LICGC?
Conclusions:
1. The LICGC provides protection to New York policyholders that hold contracts written by life insurance companies authorized to transact accident and health insurance in New York. N.Y. Ins. Law § 7703 (McKinney Supp. 2000).
2. As of April 14, 2000, ABC was licensed as a life insurer and authorized to transact accident and health insurance in New York. Therefore, LTC contracts issued to New York policyholders by ABC would qualify for LICGC coverage. N.Y. Ins. Law § 7703 (a) (McKinney Supp. 2000).
Analysis:
LTC policies are an authorized form of accident and health insurance pursuant to New York Insurance Law §§ 1113 (a)(3) and 1117 (McKinney 1985 & Supp. 2000).
New York Insurance Law §1113 (a)(3) (McKinney 1985 & Supp. 2000) defines "Accident and Health Insurance" as follows:
"Accident and health insurance" means (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability benefits pursuant to article nine of the workers" compensation law, except as specified in item (ii) hereof; and (ii) non-cancelable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date.
New York Insurance Law § 1117(a) (McKinney Supp. 2000), regarding "Health Insurance Plans For Long Term Care", reads as follows:
An authorized insurer subject to the provisions of this chapter and organized to write the kind of insurance specified in paragraph three of subsection (a) of section one thousand one hundred thirteen of this article, a corporation or health maintenance organization authorized pursuant to article forty-three of this chapter or article forty-four of the public health law, and a fraternal benefit society organized under article forty-five of this chapter, may be authorized by the superintendent to issue contracts in connection with plans providing benefits for long term care, provided such plans satisfy the criteria set forth in subsection (b) of this section and the superintendent has made the determinations set forth in subsection (f) of this section.
Thus, ABC is authorized to write accident and health insurance, including LTC polices.
The LICGC provides protection to policyholders of "health insurance" contracts issued by life insurance companies. N.Y. Ins. Law § 7703 (McKinney Supp. 2000) states that the LICGC "shall apply to health insurance policies issued to a resident by a life insurance company licensed to transact health insurance in this state at the time the policy, contract or agreement was issued or at the time it became an impaired or insolvent insurer". N.Y. Ins. Law § 7705 (e) (McKinney Supp. 2000) states that "health insurance" means the kinds of insurance specified under items (i) and (ii) of paragraph three of subsection (a) of section one thousand one hundred thirteen of this chapter." Hence, LICGC protection is available to New York State residents insured under LTC policies issued by ABC.
LTC contracts issued by insurers other than life insurance companies, such as property/casualty insurers, are not protected by the LICGC. New York Insurance Law Article 76, "Property/Casualty Security Funds" (hereinafter "PCSF"), provides protection for policies issued by property/casualty insurers. N.Y. Ins. Law § 7603 (a) (1)(B) (McKinney 1985 & Supp. 2000) defines the types of property and casualty insurance covered by the PCSF; accident and health insurance polices are not included.
For further information you may contact Associate Attorney Sam Wachtel at the New York City Office.