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2012 Legislative Summaries

Changes to the Insurance Law and Related Chapters

Note: Legislation is presented in numeric order based on 2012 Chapter Law

Qualified Financial Contracts Chapter Amendment
Ch. 4 of the Laws of 2012

Chapter 4 amended the Insurance Law to make technical amendments relating to the treatment of qualified financial contracts in an insurance insolvency proceeding.

Fertility Drugs Chapter Amendment
Ch. 10 of the Laws of 2012

Chapter 10 amended the Insurance Law to ensure that an insured may purchase fertility drugs locally without any additional financial burdens.

Mail Order Pharmacies Chapter Amendment
Ch. 11 of the Laws of 2012

Chapter 11 amended the Insurance Law to prohibit health insurers and health maintenance organizations from requiring insureds to purchase prescription drugs from a mail order pharmacy.

Oral Chemotherapy Treatments Chapter Amendment
Ch. 12 of the Laws of 2012

Chapter 12 amended the Insurance Law to ensure that health insurers and health maintenance organizations cover orally administered anticancer treatments no less favorably than intravenously administered or injected chemotherapy treatments.

Freelancers Extender
Ch. 31 of the Laws of 2012

Chapter 31 amended Chapter 447 of the Laws of 2009 to extend through December 31, 2014 the demonstration program for an association of independent employees to procure group health insurance.

Early Intervention Services and Medical Malpractice
Ch. 56 of the Laws of 2012

Chapter 56 in relevant part amended the Public Health Law and Education Law with regard to early intervention services and added language regarding the excess medical malpractice liability coverage pool.

Pre-need Funeral Services
Ch. 88 of the Laws of 2012

Chapter 88 amended Chapter 557 of the Laws of 2001, as amended by Chapter 78 of the Laws of 2007, to extend the sunset date for the sections that apply to pre-need funeral services and to require the Department to conduct a study of funding of pre-need funeral services and goods in other states.

Co-operative Property/Casualty Insurer Board Members
Ch. 126 of the Laws of 2012

Chapter 126 amended the Insurance Law to reduce the minimum number of required board members of co-operative property/casualty insurance companies and to reduce the number of board members who must be residents of the territory in New York State in which the company is licensed to do business.

Early Intervention Coordinating Council
Ch. 135 of the Laws of 2012

Chapter 135 amended the Public Health Law to add the Superintendent to the Early Intervention Coordinating Council.

Department Consolidation Cleanup
Ch. 155 of the Laws of 2012

Chapter 155 amended various laws to reflect the consolidation of the Banking and Insurance Departments into the Department of Financial Services pursuant to Part A of Chapter 62 of the Laws of 2011.

Risk-Based Capital and Superintendent’s Annual Report
Ch. 173 of the Laws of 2012

Chapter 173 amended the Insurance Law, Banking Law, and Financial Services Law in relation to risk-based capital for property/casualty insurers and the Superintendent’s annual report.

Charitable Bail Organizations
Ch. 181 of the Laws of 2012

Chapter 181 amended the Insurance Law to permit a charitable bail organization to do a bail business in New York.

Municipal Cooperative Health Benefit Plans
Ch. 191 of the Laws of 2012

Chapter 191 amended the Insurance Law to permit soil and water conservation districts to participate in municipal cooperative health benefit plans formed pursuant to Insurance Law Article 47.

Life Guaranty Fund
Ch. 217 of the Laws of 2012

Chapter 217 amended the Insurance Law and Tax Law to increase the cap on the total assessment against all member insurers of the Life Insurance Company Guaranty Corporation of New York for impairments and insolvencies.

Workers’ Compensation Rate Service Organization
Ch. 237 of the Laws of 2012

Chapter 237 amended the Insurance Law and Section 16 of Chapter 11 of the Laws of 2008 to extend the time in which a workers’ compensation rate service organization (“RSO”) may file loss costs or other statistical information with the Superintendent; extend the requirement that such an RSO have public members as part of its governing structure; and provide for the temporary continuation in office of certain publicly-appointed incumbent members of the governing body of such an RSO whose terms have expired.

Student Health Insurance
Ch. 246 of the Laws of 2012

Chapter 246 amended the Insurance Law to permit certain institutions of higher education to self-fund accident and health insurance for their students.

Annual Physical Exams
Ch. 273 of the Laws of 2012

Chapter 273 amended the Insurance Law to require health insurance policies that include coverage for a physical or well care visit to allow a visit once per calendar year, regardless of whether a period of 365 days has passed since the previous physical or well care visit.

Rebates and Inducements
Ch. 291 of the Laws of 2012

Chapter 291 amended the Insurance Law to permit an insurer or insurance producer to give or offer to give to an insured or potential insured any valuable consideration, including merchandise or periodical subscriptions, not exceeding $25 in value.

Utilization Review
Ch. 297 of the Laws of 2012

Chapter 297 amended the Insurance Law and Public Health Law in relation to the denial of health insurance claims.

Coverage for Breast Reconstruction Surgery
Ch. 302 of the Laws of 2012

Chapter 302 amended the Insurance Law to require insurance coverage for breast reconstruction surgery after a partial mastectomy.

Eastman Kodak Health Insurance
Ch. 362 of the Laws of 2012

Chapter 362 amended the Insurance Law to authorize the Superintendent to approve a demonstration program to provide group health insurance to former employees of Eastman Kodak.

Counterparty Requirements
Ch. 398 of the Laws of 2012

Chapter 398 amended the Insurance Law to amend the counterparty requirements associated with the designation of a counterparty as a “qualified” or “unqualified” counterparty for determining compliance by insurers with counterparty quantitative limitations.

Service Contracts
Ch. 409 of the Laws of 2012

Chapter 409 amended the Insurance Law to allow a seller or supplier of windshield repair or paintless dent removal services to offer service contracts.

Surety Bonds in Support of Municipal Bond Underwriting Bids
Ch. 416 of the Laws of 2012

Chapter 416 amended the Local Finance Law to permit an insurer with an “A-” rating or higher to issue surety bonds in support of municipal bond underwriting bids.

Volunteer Firefighter’s Association
Ch. 425 of the Laws of 2012

Chapter 425 incorporates the Main-Transit Volunteer Exempt Firefighter’s Benevolent Association, which must collect and pay taxes imposed by Insurance Law Article 91.

Health Saving Accounts and Health Reimbursement Accounts
Ch. 440 of the Laws of 2012

Chapter 440 amended the Insurance Law to allow a health maintenance organization to offer certain municipalities a group high deductible health plan in conjunction with a health savings account or health reimbursement account.

Licensing of New Insurance Producer Applicants
Ch. 442 of the Laws of 2012

Chapter 442 amended the Insurance Law to allow the Superintendent to issue insurance producer and certain other licenses to new applicants for a term longer than 24 months.

Accountable Care Organizations
Ch. 461 of the Laws of 2012

Chapter 461 amended the Public Health Law with regard to accountable care organizations.

Standard Drug Form
Ch. 466 of the Laws of 2012

Chapter 466 amended the Social Services Law to require the Commissioner of Health to develop a standard prior authorization request form to be utilized by all managed care providers for purposes of submitting a request for a utilization review determination for coverage of prescription drug benefits.

Medical Malpractice Sunset Date Extender
Ch. 489 of the Laws of 2012

Chapter 489 amended the Insurance Law to extend, until December 31, 2016, an exemption from risk-based capital requirements for medical malpractice insurers and a prohibition against placing a medical malpractice insurer into rehabilitation or liquidation.

Domestic Violence
Ch. 491 of the Laws of 2012

Chapter 491 in relevant part amended the Insurance Law to require a health insurer to accommodate a reasonable request made by a person covered by an insurance policy or contract to receive communications of claim-related information by alternative means or at alternative locations if the person clearly states that the disclosure of the information could endanger the person.

Unclaimed Life Insurance Benefits
Ch. 495 of the Laws of 2012

Chapter 495 amended the Insurance Law to require each insurer to perform a comparison of life insurance policies against the federal death master file to identify potential matches of its insureds or account holders and to make a good faith effort to confirm the death of the insured and locate beneficiaries.

Volunteer SUM Coverage
Ch. 496 of the Laws of 2012

Chapter 496 amended the Insurance Law to ensure that volunteer firefighters, voluntary ambulance service members, and ambulance service employees, while acting in the scope of their duties, will be covered by the maximum available supplemental uninsured/underinsured motorist (“SUM”) coverage in an insurance policy that names the volunteer fire department, ambulance service, or voluntary ambulance service as a named insured.

Changes to the Banking Law and Related Chapters

Chapter 47 (S3779) – Mortgage Banker Loan Exemption
Adopted Effective January 1, 2013

This Chapter provides that an individual may make three mortgages loans per year, or a total of five loans in a two year period, without obtaining a mortgage banking license. Current law requires a license for individuals who make more than five loans in any calendar year.

Chapter 128 (A8971) – Placement of Government Deposits
Adopted Effective July 18, 2012

Chapter 128 provides an alternative option (Certificate of Deposit Account Registry Service Deposits ("CDARS")) for securing government deposits that are in the custody of individual State Officers and placed in bank accounts, thereby reducing the cost of collateralizing such funds.

Chapter 155 (A9820-A) – Consolidation of Banking and Insurance Departments
Adopted Effective July 18, 2012

Chapter 155 makes conforming changes to various state laws to reflect consolidation of the Banking and Insurance Departments pursuant to Part-A of Chapter 62 of the Laws of 2011, the Financial Services Law. The changes are non-substantive.

Chapter 180 (A10567-A) – Interstate Branching
Adopted Effective July 18, 2012

Chapter 180 streamlines and modernizes the Banking Law. Specifically, the amendments relate to interstate banking transactions as well as the establishment of branches and trust offices by both New York banks and out-of-state banks and trust companies. It also modernizes the law with regard to branch closings and insured branches of foreign banking corporations.

Chapter 399 (A10591) – Federal Electronic Funds Transfer Act
Adopted Effective August 17, 2012

Chapter 399 amends Section 4-A-108 of the Uniform Commercial Code to clarify the relationship between the Code and the Federal Electronic Funds Transfer Act .

Chapter 403 (S219-A) – Preauthorized Fund Transfer Penalties
Adopted Effective August 17, 2012

Chapter 403 provides that no agreement for preauthorized fund transfers entered into on or after January 1, 2013 shall permit or require the transfer from a consumer account of any amount as a penalty or final payment after notice to cease a previously authorized funds transfer has been given.

Chapter 404 (S886) – Compensation for Mortgage Brokers or Lenders
Adopted Effective August 17, 2012

Chapter 404 bans the use of yield spread premiums by prohibiting mortgage brokers or lenders from receiving compensation that is based on or varies with the terms of any home loan.

Chapter 488 (S7002) – Tax Preparer Locations
Adopted Effective October 3, 2012

Chapter 488 removes the prohibition against tax return preparers or facilitators operating on the same premises as licensed check cashers.