Insurance Circular Letter No. 9 (2019)
September 6, 2019
All Insurers and Fraternal Benefit Societies Authorized to Write Life Insurance or Accident and Health Insurance in New York State
Underwriting in Life Insurance, Disability Income Insurance, and Long-Term Care Insurance for Opioid-Reversal Drugs Such as Naloxone
STATUTORY REFERENCES: Insurance Law §§ 4224 and 4525
The purpose of this circular letter is to advise insurers and fraternal benefit societies authorized to write life insurance and accident and health insurance in this state (collectively “insurers”) of their statutory obligations regarding underwriting in life insurance, disability income insurance, and long-term care insurance for opioid-reversal drugs such as naloxone.
At over 47,000 deaths, the number of 2017 overdose deaths involving opioids (including prescription opioids and illegal opioids like heroin and illicitly manufactured fentanyl) was six times higher than in 1999. The Centers for Disease Control and Prevention (“CDC”) refers to this increase as an epidemic and a public health crisis. Naloxone, also called Narcan®, is a prescription medication used to reverse overdoses caused by heroin, prescription pain medications (such as oxycodone, hydrocodone, and morphine), and other opioids. A 2019 CDC study found that while naloxone prescription rates have been increasing, nationwide only one naloxone prescription was dispensed for every 69 high-dose opioid prescriptions, with the lowest rates observed in the most rural counties. The CDC Guideline for Prescribing Opioids for Chronic Pain recommends considering prescribing naloxone when factors that increase risk for overdose are present.
As part of New York State’s Opioid Overdose Prevention Program, prescriptions for naloxone may be issued to medical professionals for use when the medical professionals encounter an individual who has taken an overdose of opioids. Prescriptions for naloxone may also be issued to non-medical persons who are not themselves at risk for an overdoes but are a family member or friend of someone who is at risk for an overdose. In some areas, there are non-patient specific prescriptions (also called “standing orders”) that authorize pharmacists to dispense naloxone to anyone who requests it, without a patient-specific prescription. Moreover, the CDC, the U.S. Department of Health & Human Services and the U.S. Surgeon General have all issued separate guidance encouraging increased availability of naloxone in order to prevent overdose deaths. Against this backdrop, New York’s nurses, first responders (including police, firefighters and paramedics), and others likely to encounter those at risk of an overdose are taking prudent measures in the public interest to reduce overdose deaths by obtaining prescriptions for naloxone.
Following reports that some insurers may be denying applications for life insurance, disability income insurance, or long term care insurance based on an applicant having been issued a prescription for an opioid-reversal drug such as naloxone, the New York State Department of Financial Services (“Department”) commenced an investigation of insurers’ underwriting guidelines and practices in New York related to opioid-reversal drugs. Specifically, the Department examined underwriting guidelines and practices where an applicant who applies for life insurance, disability income insurance, or long-term care insurance has a prescription for an opioid-reversal drug but is not at risk of an opioid overdose.
Insurance Law § 4224(a)(1) prohibits a life insurer from making or permitting any unfair discrimination between individuals of the same class and of equal expectation of life, in the amount or payment or return of premiums, or rates charged for policies of life insurance or annuity contracts, or in the dividends or other benefits payable thereon, or in any of the terms and conditions thereof.
Further, Insurance Law § 4224(a)(2) and (b)(2) prohibits issuers of life insurance, disability income insurance, and long term care insurance from refusing to insure or continue to insure, limiting the amount, extent or kind of coverage, or charging a different rate for the same coverage solely because of the physical or mental disability, impairment or disease, or prior history of the disability or disease of an insured or potential insured except where the refusal, limitation or rate differential is permitted by law or regulation and is based on sound actuarial principles or is related to actual or reasonably anticipated experience.
Since naloxone prescriptions are available to a wide population of persons who are not themselves at risk of an opioid overdose, denial of an insurance application based on an applicant having been issued a naloxone prescription is not based on sound actuarial principles and is not related to actual or reasonably anticipated experience and would result in unfair discrimination between individuals of equal expectation of life. The Department concludes that adverse underwriting decisions based solely on an applicant having a prescription for an opioid-reversal drug violates Insurance Law § 4224.
An insurer may not deny applications for life insurance, disability income insurance, and long-term care insurance solely based on the applicant having been issued a prescription for an opioid-reversal drug such as naloxone. This practice violates Insurance Law § 4224.
Any insurer that has improperly denied an applicant for life insurance, disability income insurance, and long-term care insurance based on the applicant having been issued a prescription for an opioid-reversal drug should immediately reach out to provide the applicant the opportunity to re-apply for coverage based on an underwriting assessment that complies with the New York Insurance Law.
Any record or report made to a third-party consumer reporting agency of an insurance denial based on an improper underwriting assessment due to an applicant having been issued a prescription for an opioid-reversal drug should be corrected or removed.
Please direct any questions regarding this circular letter to Peter Dumar, Chief Insurance Attorney, Life Bureau, New York State Department of Financial Services, One Commerce Plaza, Albany, New York 12257 or by email at [email protected]
James V. Regalbuto
Deputy Superintendent for Insurance
 Opioid Basics, Opioid Overdose, Centers for Disease Control and Prevention.
 Guy GP Jr., Haegerich TM, Evans ME, Losby JL, Young R, Jones CM. Vital Signs: Pharmacy-Based Naloxone Dispensing — United States, 2012–2018. MMWR Morb Mortal Wkly Rep 2019;68:679–686.