The Office of General Counsel issued the following informal opinion on December 4, 2001, representing the position of the New York State Insurance Department.

Re: Circular Letter 29 (2001)

Question Presented:

Would New York State Statutory Disability Benefits (DBL) be included as Group Coverage for members of the Reserves who wish to continue, convert and/or suspend their group coverage?


No, DBL coverage is not encompassed within those policies covered by Circular Letter 29 (2001).


An insurance company, which is a subsidiary of an investor group, and is licensed as an insurer by this Department, issued a number of policies to employers so they could comply with the requirements of New York Workers’ Compensation Law Article 9. The insurer subsequently transferred all risk on the policies to another insurer. The initial insurer, however, still administers some of the policies formerly insured by its subsidiary.

One of the insureds has inquired as to its obligation relative to employees who are in the Armed Forces Reserves and may be activated.


This Department issued Circular Letter 29 on September 22, 2001 to bring to the attention of insurers the protections afforded by the New York Insurance Law to members of the armed forces reserves called to active duty. Among such protections, is the right of the armed forces member to continue, convert or suspend coverage? Among the statutes mentioned in the Circular Letter, and providing such protections, is New York Insurance § 3221 (n) & (o) (McKinney 2000), dealing with group accident & health insurance policies issued by commercial insurers.

The obligation of employers to provide disability benefits to their employees is set forth in New York Workers’ Compensation Law Article 9. Among the methods that employers may utilize to provide such benefits, is the purchase of an insurance policy issued by an insurer licensed to transact the business of accident & health insurance in New York. New York Workers’ Compensation Law § 211(2) (McKinney 1992).

Insurance policies issued to comply with New York Workers’ Compensation Law Article 9 are encompassed within the definition of accident & health insurance in New York Insurance Law § 1113(a)(3) (McKinney 2000), and such policy forms must be approved by this Department in accordance with New York Insurance Law § 3201 (McKinney 2000). However, since the substantive requirements of the coverage are set forth in New York Workers’ Compensation Law Article 9, the policies need not comply with, and this Department does not review for compliance with, the substantive requirements of New York Insurance Law § 3221, including those requiring continuation, conversion or suspension rights.

Accordingly, as a matter of statutory construction, policies issued to comply with New York Workers’ Compensation Law Article 9 are not encompassed within those that are covered by New York Insurance Law § 3221 (n) & (o), and thus Circular Letter 29 (2001).

For further information, you may contact Principal Attorney Alan Rachlin at the New York City office.