Authorizes an insured to designate a third party to receive cancellation notification

BILL NUMBER:S2268

Title of bill

An act to amend the insurance law, in relation to the designation of third parties to receive notification of cancellation

Purpose

To enhance the protections currently afforded to senior citizen insureds by requiring that the people designated by a senior citizen insured as the third party who will receive a copy of a notice of cancellation for nonpayment of premium to receive such notice no less than thirty days before the effective date of the cancelation.

Summary of provisions

Section one provides paragraph 6 of subsection (b) of section 1117 of the insurance law is amended through the addition of a new subparagraph (F) which would allow the prospective insured who is 65 years of age or older to designate a third party who will receive a copy of the notice of cancellation sent to the prospective insured.

Section two of this bill amends subsection (e) of section 3111 of the insurance law to allow senior citizens who purchases long-term care insurance as defined in section 1117 of this chapter and for which the senior citizen pays for directly to the insurer shall permit the senior citizen to designate a third whom the insurer shall send a copy of the notice of cancellation prior to the effective date of the cancellation and proscribes the manner in which the senior citizen shall notify the insurer of the chosen designated third party. Additionally this section will now provide that if a senior citizen has not made a third party designation the insurer shall include a copy of the third party designation form with each premium statement sent to the senior citizen. This subsection now requires the insurer to confirm that the third party designee's contact information is correct. If the insurer receives designation or termination of a designation the insurer shall verify such action in the manner prescribed.

Section three provides that this act shall take effect on the sixtieth day after it shall have become a law.

Justification

This bill enhances the current statutory scheme allowing senior citizens who hold long term care insurance policies to designate a third party to receive notices of nonpayment of premiums due or notices of cancelation for nonpayment of premiums. This bill would require insurers to send a copy of the notice of cancelation for nonpayment of premium to be sent to the third party designee no later than thirty days before the effective date of the cancelation. Current law allows insurers to determine when notices will be sent to third party designees. If the notices are not received in a timely manner, third party designation safeguard has failed.

Section two of the bill further enhances these protections by prescribing the manner in which a third party designee may be chosen and the process the insurer may use to confirm designation or termination of designation and requires the insurer to confirm that the contact information of the third party designate is correct. These additional safeguards will strengthen the protection that the law currently provides our senior citizens.

Legislative history

2014: S.7506 - Reported to Finance

Fiscal implications

Undetermined.

Effective date

This act shall take effect on the sixtieth day after it shall have become a law on the sixtieth day after it shall have become a law.