Relates to what constitutes doing an insurance business in the state

BILL NUMBER:S6505B

Title of bill

An act to amend the insurance law, in relation to internet enrollment of employees

Purpose

This bill would amend § 1101(b) of the insurance law to facilitate internet enrollment of an employee who is a resident of this state and who is applying to be covered under a group life, health or annuity contract that has been issued to an out-of-state employer by an insurer that is otherwise not authorized to transact business in this state.

Summary of provisions

This bill would amend § 1101(b) of the insurance law by making a conforming amendment to paragraph (1) and adding a new paragraph (8) which establishes the circumstances under which an insurer otherwise not authorized to do business in this state may facilitate internet enrollment by a resident employee of this state for a group life or accident and health insurance policy or a group annuity contract.

Justification

Section 1101 of the insurance law defines what constitutes "doing an insurance business" in New York state Current subsection (b)(2)-(7) of this section describe the circumstances under which certain transactions are considered exempt from the section and would not be considered "doing an insurance business" in this state.

This legislation seeks to add a new subsection (b)(8) to such section to provide that an unauthorized insurer will not be "doing an insurance business" in the state, if they offer an option for internet enrollment by New York residents who are employed by an out of state employer under a group life or group accident and health insurance policy or a group annuity contract that is being issued by such unauthorized insurer. The legislation also requires: 1) that the group insurance contract being issued to the New York resident by the unauthorized insurer must comply with certain provisions of the New York insurance law relating to group insurance coverage; 2) that the insurer has lawfully issued the policy or contract in a jurisdiction where the insurer is authorized to do an insurance business; 3) that the insurer's website clearly states that the insurer is not authorized to transact the business of insurance in this state; and 4) that the insurer does not have any other contact with the employee, other than as specified in § 1101(b)(2) of the insurance law.

Section 1101(b)(2) of the current law already allows/facilitates enrollment by mail (snail or e-mail) of New York-based employees of out-of-state employers covered under certain group insurance contracts issued by unauthorized insurers. The new paragraph (8) established pursuant to this bill will similarly allow Internet enrollment under such circumstances, using largely the same standards as that which currently applies pursuant to the mail exception of subsection (b)(2).

Enactment of this bill will make it easier for New York-based employees to enroll under the group insurance contracts offered by their out-of-state employer when such contracts are offered by an unauthorized insurer. This internet enrollment option will only be made available if the appropriate group insurance standards in the current New York insurance law apply, similarly to what is currently required when New York employees are enrolled under these circumstances via mail.

Legislative history

New bill

Fiscal implications

None.

Effective date

Immediately.