What's happening
This bill requires the Superintendent of Financial Services to prohibit retroactive insurance rate changes and set review timelines.
Why it matters
Protects consumers from unexpected insurance costs. by ensuring that insurers cannot retroactively apply rate increases to policies that are already in effect, giving policyholders more predictability and stability in their financial planning.
Requires clear regulatory timelines. for the Department of Financial Services to review insurance rate requests, which may speed up the rate approval process and provide greater transparency for both insurers and policyholders.
Mandates adequate departmental resources. for rate review, suggesting a commitment to thorough and timely oversight—potentially leading to more reliable and fair rate-setting practices in the insurance industry.
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Who cares
Headline styles
Stop Retroactive Insurance Charges
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Referred to insurance
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Stop Retroactive Insurance Rate Hikes
In Assembly Committee · Insurance · Sponsor Kevin Cahill
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3019
2019-2020 Regular Sessions
IN SENATE
January 31, 2019
Introduced by Sen. KENNEDY -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to the powers and duties of the superintendent of financial services
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The insurance law is amended by adding a new section 215 to read as follows:
§ 215. Superintendent to prohibit retroactive applications of a resulting rate change. The superintendent shall promulgate rules and regulations to prohibit retroactive applications of a resulting rate change. Such rules and regulations shall include, but not be limited to, establishing reasonable time periods in which the department shall review rate requests and providing the department with sufficient resources to accomplish such tasks.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02631-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to the powers and duties of the superintendent of financial services
Purpose or general idea of bill
This bill authorizes and directs the superintendent of the Department of Financial Services to promulgate rules and regulations necessary to prohibit retroactive charge-backs of health insurance rates.
Summary of specific provisions
The insurance law is amended by adding a new section 215 to authorize and direct the superintendent of the Department of Financial Services to promulgate rules and regulations necessary to prohibit retroactive charge-backs of health insurance rates. These shall include the estab- lishment of reasonable time periods in which the department shall review rate requests and providing the department with sufficient resources to accomplish such tasks.
Justification
Current law allows that subscribers of health insurance can be required to pay an additional premium for past coverage when the Department of Financial Services approves a requested rate increase, and applies it retroactively. These charges can be devastating to small businesses and those who are self-employed.
In one case, an insurance carrier applied to the Department of Financial Services in late March for a substantial, mid-year rate increase, and asked that it take effect on July 1st. The Insurance department finally approved the rate increase in early September, and also allowed the carrier to charge the increase back to August 1st. The small business and its employees who were routinely billed one month in advance for their August, September and October health insurance - now suddenly owed thousands of dollars. without payment, their health coverage could be in jeopardy for a portion of that period.
State law does require insurance carriers to inform subscribers of a potential rate increase at least 30 days prior to the proposed effective date. In practice, however, the advance notification is ineffective because:
* Small business owners and the self-employed are not typically in a position to suddenly change their coverage or carrier. They do not know whether the Insurance Department of Financial Services will actually approve the requested increase. Without this knowledge, they cannot make informed choices about their available options.
* There is no good reason to assume the above subscribers would suspect that a future rate will be charged to them retroactively. This is an unacceptable way to conduct business in New York or any other state.
This bill would ensure that those who work so hard to provide insurance for their families and employees are not placed in a potentially detri- mental and unfair financial situation.
Prior legislative history
2012: S.6486 Referred to Insurance 2013-14 S.381 Referred to Insurance 2015-16: S.666/A.1048 Referred to Insurance 2018-18: S.1839 Referred to Insurance
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.