S T A T E O F N E W Y O R K
________________________________________________________________________
5928--A
2015-2016 Regular Sessions
I N S E N A T E
June 12, 2015
___________
Introduced by Sen. SEWARD -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the insurance law, in relation to catastrophic or rein-
surance coverage issued to certain small groups; and providing for the
repeal of such provisions upon the expiration thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 1 of subsection (h) of section 3231 of the insur-
ance law, as added by chapter 501 of the laws of 1992, is amended to
read as follows:
(1) Notwithstanding any other provision of this chapter, no insurer,
subsidiary of an insurer, or controlled person of a holding company
system may act as an administrator or claims paying agent, as opposed to
an insurer, on behalf of small groups which, if they purchased insur-
ance, would be subject to this section. No insurer, subsidiary of an
insurer, or controlled person of a holding company may provide stop
loss, catastrophic or reinsurance coverage to small groups which, if
they purchased insurance, would be subject to this section. PROVIDED,
HOWEVER, THE PROVISIONS OF THIS PARAGRAPH SHALL NOT APPLY TO STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE ISSUED AND IN EFFECT ON OR BEFORE
JUNE FIRST, TWO THOUSAND FIFTEEN TO SMALL GROUPS COVERING BETWEEN
FIFTY-ONE AND ONE HUNDRED EMPLOYEES OR MEMBERS OF THE GROUP.
S 2. Paragraph 1 of subsection (e) of section 4317 of the insurance
law, as amended by section 72 of part D of chapter 56 of the laws of
2013, is amended to read as follows:
(1) Notwithstanding any other provision of this chapter, no insurer,
subsidiary of an insurer, or controlled person of a holding company
system may act as an administrator or claims paying agent, as opposed to
an insurer, on behalf of small groups which, if they purchased insur-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11569-11-5
S. 5928--A 2
ance, would be subject to this section. No insurer, subsidiary of an
insurer, or controlled person of a holding company may provide stop
loss, catastrophic or reinsurance coverage to small groups which, if
they purchased insurance, would be subject to this section. PROVIDED,
HOWEVER, THE PROVISIONS OF THIS PARAGRAPH SHALL NOT APPLY TO STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE ISSUED AND IN EFFECT ON OR BEFORE
JUNE FIRST, TWO THOUSAND FIFTEEN TO SMALL GROUPS COVERING BETWEEN
FIFTY-ONE AND ONE HUNDRED EMPLOYEES OR MEMBERS OF THE GROUP.
S 3. Paragraph 1 of subsection (g) of section 3231 of the insurance
law, as amended by section 70 of part D of chapter 56 of the laws of
2013, is amended to read as follows:
(1) This section shall also apply to policies issued to a group
defined in subsection (c) of section four thousand two hundred thirty-
five OF THIS CHAPTER, including but not limited to an association or
trust of employers, if the group includes one or more member employers
or other member groups which have fifty or fewer employees or members
exclusive of spouses and dependents. For policies issued or renewed on
or after January first, two thousand fourteen, if the group includes one
or more member small group employers eligible for coverage subject to
this section, then such member employers shall be classified as small
groups for rating purposes and the remaining members shall be rated
consistent with the rating rules applicable to such remaining members
pursuant to paragraph two of this subsection. PROVIDED, HOWEVER THIS
SUBSECTION SHALL NOT APPLY TO GROUPS WHICH HAVE BEEN ISSUED A POLICY ON
OR BEFORE JULY FIRST, TWO THOUSAND FIFTEEN, AND HAVE MEMBER EMPLOYERS,
WHO, ON OR AFTER SUCH DATE, HAVE BETWEEN FIFTY-ONE AND ONE HUNDRED
EMPLOYEES, EXCLUSIVE OF SPOUSES AND DEPENDENTS, AND THE GROUP IS EITHER:
(I) ORGANIZED PURSUANT TO ARTICLE FIVE-G OF THE GENERAL MUNICIPAL LAW
AND IS COMPRISED ENTIRELY OF ONE OR MORE MUNICIPAL CORPORATIONS OR
DISTRICTS (AS SUCH TERMS ARE DEFINED IN SECTION ONE HUNDRED NINETEEN-N
OF THE GENERAL MUNICIPAL LAW); OR (II) COMPRISED ENTIRELY OF NONPUBLIC
SCHOOLS PROVIDING EDUCATION IN ANY GRADE FROM PRE-KINDERGARTEN THROUGH
TWELFTH GRADE. FOR SUCH GROUPS WHICH HAVE BEEN ISSUED A POLICY ON OR
BEFORE JULY FIRST, TWO THOUSAND FIFTEEN, THE APPLICABILITY OF THIS
SUBSECTION SHALL CONTINUE IRRESPECTIVE OF WHETHER THE GROUP SELECTS A
POLICY FROM A DIFFERENT INSURER OR IF THE MEMBER EMPLOYER SELECTS A
DIFFERENT GROUP FOR SUCH COVERAGE.
S 4. Paragraph 1 of subsection (d) of section 4317 of the insurance
law, as amended by section 72 of part D of chapter 56 of the laws of
2013, is amended to read as follows:
(1) This section shall also apply to a contract issued to a group
defined in subsection (c) of section four thousand two hundred thirty-
five of this chapter, including but not limited to an association or
trust of employers, if the group includes one or more member employers
or other member groups which have fifty or fewer employees or members
exclusive of spouses and dependents. For contracts issued or renewed on
or after January first, two thousand fourteen, if the group includes one
or more member small group employers eligible for coverage subject to
this section, then such member employers shall be classified as small
groups for rating purposes and the remaining members shall be rated
consistent with the rating rules applicable to such remaining members
pursuant to paragraph two of this subsection. PROVIDED, HOWEVER THIS
SUBSECTION SHALL NOT APPLY TO GROUPS WHICH HAVE BEEN ISSUED A POLICY ON
OR BEFORE JULY FIRST, TWO THOUSAND FIFTEEN, AND HAVE MEMBER EMPLOYERS,
WHO, ON OR AFTER SUCH DATE, HAVE BETWEEN FIFTY-ONE AND ONE HUNDRED
EMPLOYEES, EXCLUSIVE OF SPOUSES AND DEPENDENTS, AND THE GROUP IS EITHER:
S. 5928--A 3
(I) ORGANIZED PURSUANT TO ARTICLE FIVE-G OF THE GENERAL MUNICIPAL LAW
AND ARE COMPRISED ENTIRELY OF ONE OR MORE MUNICIPAL CORPORATIONS OR
DISTRICTS (AS SUCH TERMS ARE DEFINED IN SECTION ONE HUNDRED NINETEEN-N
OF THE GENERAL MUNICIPAL LAW); OR (II) COMPRISED ENTIRELY OF NONPUBLIC
SCHOOLS PROVIDING EDUCATION IN ANY GRADE FROM PRE-KINDERGARTEN THROUGH
TWELFTH GRADE. FOR SUCH GROUPS WHICH HAVE BEEN ISSUED A POLICY ON OR
BEFORE JULY FIRST, TWO THOUSAND FIFTEEN, THE APPLICABILITY OF THIS
SUBSECTION SHALL CONTINUE IRRESPECTIVE OF WHETHER THE GROUP SELECTS A
POLICY FROM A DIFFERENT INSURER OR IF THE MEMBER EMPLOYER SELECTS A
DIFFERENT GROUP FOR SUCH COVERAGE.
S 5. This act shall take effect immediately; and shall be deemed
repealed 5 years after it shall have become a law.