October 29, 1982

SUBJECT: INSURANCE

(EFF. 12-4-03

DATED: OCTOBER 29, 1982

SUPPLEMENT NO. 2 TO CIRCULAR LETTER NO. 16 (1981)

WITHDRAWN

TO: ALL INSURERS AND SELF-INSURERS WRITING AUTOMOBILE INSURANCE IN THIS STATE

RE: REDUCTION IN NO-FAULT LOSS OF EARNINGS BENEFITS FOR QUALIFIED WAGE CONTINUATION PLANS.

Section 671(1) of the Insurance Law contains a provision which requires insurers to reduce gross loss of earnings from work by benefits paid under what have become known as "qualified wage continuation plans" when calculating no-fault first party benefits payable for loss of earnings.

In order for a particular wage continuation plan to qualify under the aforementioned provision it must meet all of the following three conditions:

1) The applicant must be entitled to receive the same level of wage continuation benefits for a subsequent unrelated accident or illness when he or she returns to work after recovering from the injuries sustained in the motor vehicle accident;

2) benefits for a subsequent unrelated accident must be equal in both time and amount to the wage continuation benefits the applicant was entitled to as a result of the injuries suffered in the motor vehicle accident; and

3) wage continuation benefits for a subsequent disability must be immediately available, without any requirement that the applicant work a stated period of time before full benefits are restored.

If these three conditions are met, the plan probably qualifies.

In addition, for all "qualified plans" which provide benefits equal to less than 100% of the employees salary, the insurer should reduce the amount paid under the "plan" by the amount required to be paid in satisfaction of the New York State Disability Law, (50% of salary up to $ 95 per week). Only the excess over the N.Y.S. Disability Benefits is a "qualified wage continuation plan" benefit.

In order to provide for consistent application of this provision, the Insurance Department has been reviewing plans submitted by insurers and employers and classifying them as either "qualified" or "non-qualified". The following revised lists contain additional plans revisited since supplement # 1 to this Circular Letter was issued (identified with a double asterisk **):

QUALIFIED PLANS
   

EMPLOYER

COVERED EMPLOYEES AND BENEFIT

Chevrolet, Inc.

All employees represented by the U.A.W.

and

with one year or more of service are

Ford Motor Co.

entitled to benefits for 52 weeks
 

equal to approximately 60% of the
 

employee's weekly salary, as set
 

forth in schedule of benefits as
 

contained in U.A.W. contract.
   

 * City of Yonkers

Police Officers.
   

 ** Corning Glass Works

1-Hourly Roll Employees-Entitled to
 

an "Enriched Disability Plan", which
 

provides up to $ 150 per week for a
 

maximum of 26 weeks per disability.
   
 

2-Other Than Hourly Roll Employees-
 

Entitled to from 1 to 26 weeks of full
 

pay per disability, depending upon
 

length of service. The "Enriched
 

Disability Plan", (see hourly roll
 

employees above), is used up to $ 150
 

per week maximum, only to supplement
 

the wage continuation benefit when full
 

salary benefits have been exhausted.
 

Insurers must ascertain number of weeks
 

eligible injured person is entitled to.
   

Depository Trust Co.

Professional, administrative, super-
 

visory employees, guards and
 

confidential secretaries are entitled to
 

full salary for up to 180 days.
   

 * Federal District Court

Justices only.
   

General Electric Co.

All employees. Level I Benefits-

 (revised and corrected)

20 days each 12 months, at full pay.
 

No-Fault insurers are required to
 

pay full no-fault benefits, (no reduc-
 

tion) when this benefit period is
 

utilized, since as the time is used,
 

it is lost. However, insurers are
 

entitled to the $ 95 per week disability
 

offset. Level II Benefits-Payable
 

only after Level I Benefits have been
 

exhausted. Benefits are equal to
 

60% of employee's weekly salary up
 

to a maximum weekly benefit of $ 200
 

for up to 26 weeks.
   

 * Greenwich Fixture Co.

Officers of the company not covered
 

by the union plan.
   

 * Manhasset Union Free

All professional personnel including

  School District

teaching and administrative staff.
   

 ** Motorola, Inc.

All employees, after 1 year of
 

service are entitled to: 1. 90 days
 

at full pay; and 2. next 90 days
 

at half pay.
   

 * New York City

Employees in the uniformed services
 

of Police, Fire, Correction and
 

Sanitation Departments.
   

 ** NEW YORK STATE

Hourly Employees-(with more than 6

 Electric and Gas Corp.

months service)-entitled to 85% of
 

basic earnings (40 hour week) for up
 

to 26 weeks per disability.
 

Salaried Employees-Entitled to full
 

salary for a specified period of time,
 

based on length of service. Insurer
 

must ascertain benefit period eligible
 

injured person is entitled to.
   

Niagara Mohawk Power

All employees. Benefits are payable
 

for up to 26 weeks at 100% of salary.
   

 ** Prudential Property

All Employees: (Level I) 10, 15, or 20

 and Casualty Ins. Co.

days at full pay per year depending
 

on length of service. (Level II)
 

Payable only after initial period
 

benefits have been exhausted.
 

Benefits are equal to: 1 - 75% of
 

base salary for employees with less
 

than 5 years of service, payable for
 

up to 26 weeks per disability; or
 

2 - 90% of base salary for employees
 

with 5 or more years of service,
 

payable for up to 52 weeks per
 

disability.
   

Stauffer Chemical Co.

All employees. Benefits are payable
 

for up to 6 months (3 months for
 

employees with less than one year's
 

service) at 100% of salary.
   

 * U.S. Armed Forces

All members of the Armed Forces.
   

 * Village of Mamaroneck

Police Officers.
   

 ** Westinghouse Electric

All employees scheduled to work 24 or

 Corp.

more hours per week are entitled to
 

approximately 60% of weekly salary
 

up to a maximum of $ 200 per week for
 

up to 26 weeks per disability.

NON-QUALIFIED PLANS

  

 ** Alliance Tool Corp.

I.B.M.

  

 ** Amos Post, Inc.

International Telephone and

  

Associate Metals and Minerals

Telegraph Corp. (ITT)

  

 Corp.

 ** Lightron of Cornwall, Inc.

  

Bristol Labs a.k.a. Bristol

 ** MacMillan, Inc.

  

 Meyers

 ** National Bulk Carriers

  

 ** Buffalo Envelope

 ** Nationwide Ins. Co.

  

Celanese Corp.

 ** New York State Employees

  

 ** Community Savings Bank

New York Telephone Company

  

 ** Computer Task Group

 ** Rochester Telephone

  

Con Edison

So. Huntington Schools

  

Dobbs Ferry U.F.S.D.

U.F.S.D. # 13

  

Eastman Kodak

Sperry Rand

  

 ** Hart Schaffner and Marx

State University of New York

  

 (Wallachs)

    
     

Note: If an employee covered by a non-qualified plan is

  

eligible for New York State Disability Benefits,

  

the insurer is entitled to an offset pursuant to

  

Section 671(2)(b) of the Insurance Law.

  
     

* Unlimited sick leave plans providing full salary for the

  

duration of disability.

  
     

** Plans reviewed subsequent to prior revision.

  

* * *

Insurers are reminded that insureds covered by a "qualified wage continuation plan" are entitled to a premium reduction, to reflect the insurer's reduced exposure to loss, pursuant to Section 677.6 of the Insurance Law. Insurers must grant the premium reduction upon receipt of information that the insured is entitled to benefits under a qualified wage continuation plan.

Insurers are again requested to submit for approval, to the address shown below, details of any other plans which they believe may qualify. All plans submitted will be reviewed and, periodically, the Department will issue revised lists of qualified and non-qualified wage continuation plans:

Martin Reis

Examiner

Property and Casualty Insurance Bureau

New York State Insurance Department

Two World Trade Center

New York, New York 10047

Very truly yours,

[SIGNATURE]

ALBERT B. LEWIS

Superintendent of Insurance

ABL/eb