Insurance Circular Letter No. 7 (2023)

November 16, 2023

STATUTORY AND REGULATORY REFERENCES:  N.Y. Insurance Law §§ 3201 and 4308; 11 NYCRR Part 52 (Insurance Regulation 62)

I. Background and Purpose

The purpose of this circular letter is to provide guidance to insurers authorized to write accident and health insurance in this state, Article 43 corporations, health maintenance organizations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, and prepaid health services plans (collectively, “issuers”) to facilitate the review and approval of accident and health insurance policy forms and rates by the Department of Financial Services (“Department”).  This circular letter does not apply to Child Health Plus, Essential Plan, and Medicaid managed care coverage.

Pursuant to Insurance Law §§ 3201 and 4308, every accident and health insurance policy form that is delivered or issued for delivery in New York must first be filed with and approved by the Department.  The statutory framework for the review and approval of policy forms and rates results in hundreds of policy form and premium rate filings annually by issuers that must be reviewed by the Department.  In order to facilitate an efficient and timely review and approval process, issuers should adhere to the guidance set forth in this Circular Letter and the forms filing guidance and checklists that are available on the Department’s website.  Issuers are also reminded of previously issued circular letters addressing filing procedures.  Of particular note are:  (1) the circumstances in which files may be closed (Insurance Circular Letter No. 14 (1997)); (2) the expedited priority review using a certified policy form submission based upon a checklist, certified policy form submission based upon a template, or certified policy form submission based upon a previously approved policy form (Insurance Circular Letter No. 4 (2003)); and (3) using the System for Electronic Rates and Forms Filing (“SERFF”) process and the priority of submission review (Insurance Circular Letter No. 9 (2004)).

II. Discussion

The Department has taken several steps to increase the amount of filing resources available to issuers.  Resources on the Department’s website include model language, detailed checklists on specific products, expedited approval options (including certification based on a checklist, template, or previously approved policy form), and detailed instructions on submitting form and rate filings.  While the Department has increased the quantity of resources available to issuers, there has not been an increase in the quality of issuer submissions.  Submissions regularly contain benefit or cost-sharing structures in the policy forms that do not match the rate materials, are poorly organized, are not in final format (i.e., contain issuer drafting notes or tracked changes), are difficult to understand, do not adhere to applicable laws and regulations, do not meet submission requirements, fail to use model language where available, or fail to include completed checklists where available.  Issuers are reminded to undertake a full review of form and rate filings and to use all of the resources the Department has made available prior to submission.  Issuers are also reminded that filings with the deficiencies identified above will be closed and issuers will need to resubmit a new, complete filing.

With respect to policy forms that include variable material, issuers should limit variability to language and copayments, coinsurance, and deductibles (“cost-sharing”) requested, or that could reasonably be anticipated to be requested, by policyholders.  Submissions containing excessive amounts of variability in policy forms and schedules of benefits make it difficult for the Department to determine whether the policy forms and schedules of benefits comply with applicable laws and regulations and will be closed.  Further, issuers should fully explain all variability in accompanying illustrative material, including an explanatory memorandum, as set forth in 11 NYCRR § 52.31(l).  Submissions including excessive variability or variability not adequately described in an explanatory memorandum will be closed.

With respect to new and innovative products and methods of reducing health care costs, such products should provide health care benefits of real economic value as explained in 11 NYCRR § 52.1(c).  To help ensure that new and innovative products and methods can be offered to consumers promptly and efficiently, issuers seeking to introduce such products or methods are strongly encouraged to communicate with the Department prior to making a formal policy form and rate submission.  Such communication will enable the Department to offer feedback regarding applicable laws and regulations that may impact the product or method.  The policy form and rate submission should reference the discussions with the Department and clearly identify the product.

III. Conclusion

The Department is committed to working with issuers to ensure that policy form and rate submissions conform with applicable laws and regulations and to increase efficiencies in the policy form and rate submission approval process.  Prior to making a formal submission, issuers are strongly encouraged to use the Department’s online resources to ensure that their policy form and rate submissions are of the highest quality.  Issuers should also undertake a full review of their form and rate submissions, including addressing any of the deficiencies set forth in this Circular Letter prior to submission.  Issuers are also reminded that submissions with excessive variability or variability that is not adequately described in an explanatory memorandum will be closed.  In addition, issuers seeking to introduce new and innovative products are strongly encouraged to reach out to the Department prior to the submission for relevant feedback that will assist in the review and approval process.  Adherence to the guidance set forth in the Department’s circular letters on the Department’s website will assist with an efficient and timely review and approval process.

Please direct any questions regarding this circular letter to the Health Bureau by email at [email protected].

Very truly yours,

Lisette Johnson
Bureau Chief, Health Bureau