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	<title>Sari Gabay | Insurance Advocate</title>
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		<title>DFS Circular Letters Encourage Leniency on Insureds and Extend Continuing Education Licensing Deadlines</title>
		<link>https://www.insurance-advocate.com/2020/04/13/dfs-circular-letters-encourage-leniency-on-insureds-and-extend-continuing-education-licensing-deadlines/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 13 Apr 2020 02:48:47 +0000</pubDate>
				<category><![CDATA[2020]]></category>
		<category><![CDATA[April 13]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=12164</guid>

					<description><![CDATA[<p>The New York State Department of Financial Services (“DFS”) has issued several Circular Letters and industry guidance over the past month due to COVID-19.  While considerable information is geared towards health insurances and telemedicine, two Circular Letters in particular are relevant to all insurance producers.    Circular Letter No. 7 (2020) dated, March 19, 2020, [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2020/04/13/dfs-circular-letters-encourage-leniency-on-insureds-and-extend-continuing-education-licensing-deadlines/">DFS Circular Letters Encourage Leniency on Insureds and Extend Continuing Education Licensing Deadlines</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1">The New York State Department of Financial Services (“DFS”) has issued several Circular Letters and industry guidance over the past month due to COVID-19.<span class="Apple-converted-space">  </span>While considerable information is geared towards health insurances and telemedicine, two Circular Letters in particular are relevant to all insurance producers.<span class="Apple-converted-space">   </span></p>
<p class="p1">Circular Letter No. 7 (2020) dated, March 19, 2020, encourages DFS licensees to help alleviate the financial impact caused by COVID-19 and to be flexible with insureds who are unable to make timely payments of premium or fees.<span class="Apple-converted-space">  </span>Some recommendations include offering payment accommodations, such as allowing insureds to defer payments at no cost, extending payment due dates, or waiving late or reinstatement fees.<span class="Apple-converted-space">  </span>DFS encourages licensees to help insureds avoid non-renewal of insurance policies.<span class="Apple-converted-space">  </span>DFS also suggests allowing for flexibility regarding conditions that trigger benefits under life insurance policies or annuity contracts, which are typically strictly enforced.<span class="Apple-converted-space">   </span></p>
<p class="p1">Just five days after Circular Letter No. 7, DFS issued Circular Letter No. 9, on March 24, 2020, to provide producers with an extension of time to satisfy their licensing requirements.<span class="Apple-converted-space">  </span>New York State Insurance Law § 2132 sets forth licensees continuing education (“CE”) requirements in connection with license renewals.<span class="Apple-converted-space">  </span>Given COVID-19, DFS understands that although there are online options available, it may be difficult for certain producers to obtain the required number of CE credits in advance of their license expiration dates.<span class="Apple-converted-space">  </span>Thus, as a temporary accommodation, DFS has suspended the expiration of licenses for all individual producers for 60 days (through late May 2020) and is waiving any late fees during this period. If a license is due to expire during this period and the producer does not submit a license renewal application and complete all required CE credits, according to Circular Letter No. 9, the license will lapse.<span class="Apple-converted-space">  </span>Notably, DFS has also suspended the requirement that a monitor be present to complete producer CE and pre-licensing course exams during this 60-day period.</p>
<p class="p1">With this ever-changing landscape, it is likely that DFS will continue to issue additional industry letters and guidance and it may be necessary to further extend this 60-day grace period among other accommodations to producers and to insureds.</p>
<p class="p2"><span class="s5"><i>This article is for information purposes only and is not intended to give legal advice. For more information about insurance regulatory or other legal issues, please contact the author at (212)941.5025 or gabay@gabaybowler.com.</i></span></p>
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<!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2020/04/13/dfs-circular-letters-encourage-leniency-on-insureds-and-extend-continuing-education-licensing-deadlines/">DFS Circular Letters Encourage Leniency on Insureds and Extend Continuing Education Licensing Deadlines</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded>
					
		
		
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		<title>Vaping: A look at the health effects and insurance  implications  of Vaping</title>
		<link>https://www.insurance-advocate.com/2019/10/14/vaping/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 14 Oct 2019 17:22:24 +0000</pubDate>
				<category><![CDATA[October 14]]></category>
		<category><![CDATA[Cover Story]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=11853</guid>

					<description><![CDATA[<p>A look at the health effects and insurance  implications  of Vaping<br />
The rise in vaping-related deaths and illnesses has ushered in a new awareness of the negative effects of electronic cigarettes or “e-cigarettes.”<br />
Entering the market in the early 2000s, e-cigarettes gained global traction in 2014 and have steadily risen in popularity.  Earlier this year, several people were hospitalized with a mysterious lung illness attributed to vaping and e-cigarettes. Since then, the numbers have risen steadily with the CDC reporting 805 confirmed cases of lung injury related to vaping. At the time of this article, 17 people have died due to vape-related illness. As a result of this, President Trump has pushed for a ban on certain flavored e-cigarette pods and cartridges. States have followed suit, calling for a temporary ban on these products.  Although commonly viewed as a safer alternative to traditional cigarettes, we are now seeing some of the health consequences, and as more is understood about e-cigarettes, vaping, and Juul-ing”, we can expect changes in the health and life insurance industry.</p>
The post <a href="https://www.insurance-advocate.com/2019/10/14/vaping/">Vaping: A look at the health effects and insurance  implications  of Vaping</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1"><i>Thank you to Kathryn Jones for her research assistance with this article.</i></p>
<p class="p1"><b>The rise in vaping-related deaths and illnesses has ushered in a new awareness of the negative effects of electronic cigarettes or “e-cigarettes.”</b></p>
<p class="p1">Entering the market in the early 2000s, e-cigarettes gained global traction in 2014 and have steadily risen in popularity.<span class="Apple-converted-space">  </span>Earlier this year, several people were hospitalized with a mysterious lung illness attributed to vaping and e-cigarettes. Since then, the numbers have risen steadily with the CDC reporting 805 confirmed cases of lung injury related to vaping. At the time of this article, 17 people have died due to vape-related illness. As a result of this, President Trump has pushed for a ban on certain flavored e-cigarette pods and cartridges. States have followed suit, calling for a temporary ban on these products.<span class="Apple-converted-space">  </span>Although commonly viewed as a safer alternative to traditional cigarettes, we are now seeing some of the health consequences, and as more is understood about e-cigarettes, vaping, and Juul-ing”, we can expect changes in the health and life insurance industry.</p>
<p class="p1">By way of background, according to a recent report by the Center for Disease Control (CDC), conventional tobacco use has declined significantly among youth and young adults. However, e-cigarettes have been on the rise and offer a new, arguably trendier way to consume nicotine. The use of e-cigarettes is often referred to as vaping based on the mechanism used to deliver the nicotine into the body. E-cigarettes produce an aerosol by heating a liquid that usually contains nicotine, flavorings, and other chemicals that help to make the aerosol which users then inhale. Although e-cigarettes come in a variety of shapes, each contains a heating element and place to hold liquid. Juul has become one of the most popular vaping products on the market and the company at the center of this ban. When the company Juul emerged in commerce in 2017, it gained traction through its discreet shape and size as well as its flavor options. Juul pods, the liquid that is turned into vapor, come in flavors that often appeal to young users like mango, crème brulee and watermelon. Though originally marketed as the safer option to conventional cigarette use and a helpful means to quitting cigarettes, new companies like Juul have pounced on the opportunity to appeal to new customers, namely teens. A CDC survey from 2017 reported that nearly seven million people over the age of 18 use e-cigarettes. Another report exposed that an estimated 2.1 million middle school and high school students reported using e-cigarettes in 2017 and 3.6 million reported use in 2018.</p>
<p class="p3"><b>The tie in&#8230;</b></p>
<p class="p1">In 2016, the FDA finalized a rule deeming e-cigarettes to be products meeting the statutory definition of “tobacco products”, thus bringing them under the purview of the FDA’s control. The “deeming rule” as it is known, thus adds e-cigarettes to the list of tobacco products that insurance companies consider when providing health and life insurance coverage. Because tobacco usage has been linked with increased likelihood of disease and death, insurance companies often charge higher premiums to smokers versus non-smokers. These upcharges can vary but companies generally have the ability under the Affordable Care Act to charge up to 50% more in premiums for smokers. However, under the ACA, states also have the ability to reduce or eliminate altogether inflated premiums for smokers. Several states opted to eliminate higher premiums for smokers years ago. While vaping can affect individual’s insurance policies, the new illnesses, deaths and bans can affect a business’ insurance policy.</p>
<p class="p1">The individuals and the families affected by the recent spur of vape-related injuries have begun lawsuits aimed at several players. One such lawsuit has been directed at Juul and other manufacturers while others have filed against individual smoke shops. As for product liability insurance, many insurers are wary of providing coverage for e-cigarettes because of the lack of consensus and information in the medical community about their safety. Many carriers utilize different exclusions in order to narrow coverage. Health hazard exclusions are the most common. One type of health hazard exclusion for tobacco products excludes “bodily injury” including but not limited to the actual or alleged emergence, contraction or exacerbation of virtually any type of cancer or pre-cancerous condition, heart disease, arteriosclerosis, emphysema or any other lung-related disease, or any other disease; caused by, resulting from, arising out of the use, consumption ingestion, inhalation, absorption of, contact with, or exposure to tobacco, any product containing tobacco or any product used with or related to the use of tobacco. They may also exclude other metabolic effects of “tobacco products or tobacco byproducts” use, including shortness of breath, low resistance to infection or disease, psychological or mental injury or addiction.<span class="Apple-converted-space">  </span>By narrowing coverage, insurers are safeguarding against paying out millions to injured parties.</p>
<p class="p1">Some insurers have met the demand for vape-specific insurance coverage. One such carrier offers vape and e-cigarette shop insurance that notably does not include health hazard exclusions. Another insurer offering an exclusive e-cigarette and vape store program offers low minimum premiums as well as no full battery exclusions. These programs offer coverage for a range of classes, including: distributors, wholesalers, importers/blenders, retailers, e-liquids &amp; e-juices, e-cig devices &amp; accessories, private labels, and smoke &amp; vape retail shops. For manufacturers and shops, general liability insurance is key, especially as the number of vape related illnesses rise and as some e-cigarettes malfunction. In a study published last year, it was found that over 2,000 e-cigarette explosion and burn injuries sent users to US hospital emergency rooms from 2015 to 2017. One of the complaints filed against e-cigarette manufacturer Juul lists at least two claims of product liability manufacturing defects and negligence. As lawsuits against vape shop owners rise, insurance that covers health hazards may be the key to keep these owners in business. As several news outlets have reported, mom and pop smoke shops all around the country are already bracing for impact due to the proposed ban and possible lawsuits.</p>
<p class="p1"><span class="s2">Add</span>: more on ban, CDC findings on the outbreak, how a parent could bring a claim if child is sick from vaping especially because they would have been smoking illegally, notes about fraud and lying about smoking (weed smokers shouldn’t lie even if they live in a state where it is illegal because HIPAA will protect their information)</p>
<p class="p1">Early research into these deaths and illnesses show a possible link to the vaping of marijuana products. Several states have legalized medicinal and recreational marijuana, but because it is still federally illegal, the FDA has no control over the manufacturer of cannabis products, particularly vape cartridges. According to PBS, eighty percent of the 148 underwriters who were surveyed by reinsurer Munich Re at the Association of Home Office Underwriters annual conference in 2015 said their company factors marijuana use into its decisions on how to price policies and whether to offer coverage. This does not mean that marijuana users will be denied coverage or automatically be offered smoker policies. In fact, 29% of those surveyed indicated they view marijuana users as nonsmokers. Insurance companies ask questions about marijuana usage as they would about alcohol consumption or tobacco use. Life insurers are less concerned with the legality of the substance as they are with the long term effects on an individual’s health. Some sources indicate that using cannabis and using alcohol are underwritten similarly due to long term effects.</p>
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<!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2019/10/14/vaping/">Vaping: A look at the health effects and insurance  implications  of Vaping</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded>
					
		
		
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		<title>DFS Addresses Insurers’ Discriminatory Practices With Respect to Certain Prescription Drug Use</title>
		<link>https://www.insurance-advocate.com/2019/09/30/dfs-addresses-insurers-discriminatory-practices-with-respect-to-certain-prescription-drug-use/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 30 Sep 2019 03:32:17 +0000</pubDate>
				<category><![CDATA[September 30]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=11806</guid>

					<description><![CDATA[<p>The public health crisis in the United States in connection with opioids and drug overdoses has led to the New York State Department of Financial Services’ (“DFS”) issuance of Circular Letter No. 9 on September 6, 2019, directed at New York State life insurance and accident and health insures in regards to overdose reversal drugs [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/09/30/dfs-addresses-insurers-discriminatory-practices-with-respect-to-certain-prescription-drug-use/">DFS Addresses Insurers’ Discriminatory Practices With Respect to Certain Prescription Drug Use</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1"><span class="s2">The public health crisis in the United States in connection with opioids and drug overdoses has led to the New York State Department of Financial Services’ (“DFS”) issuance of Circular Letter No. 9 on September 6, 2019, directed at New York State life insurance and accident and health insures in regards to overdose reversal drugs such as Naloxone/ Narcan.<span class="Apple-converted-space">  </span>The Circular Letter was issued in response to DFS’ investigation into denials of applications for life insurance, disability income insurance, and long-term care insurance solely based on the applicant having been issued a prescription for an opioid-reversal drug such as Naloxone. </span></p>
<p class="p1"><span class="s3">By way of background, Insurance Law § 4224 prohibits a life insurer from unfair discrimination practices. <span class="Apple-converted-space">  </span>As such, issuers of life insurance, disability income insurance, and long term care insurance are prohibited from refusing to insure or continue to insure, or limiting the amount or extent of coverage, or charging different rates for the same coverage, “solely because of the physical or mental disability, impairment or disease, or prior history of the disability or disease of an insured or potential insured <i>except where the refusal, limitation or rate differential is permitted by law or regulation and is based on sound actuarial principles or is related to actual or reasonably anticipated experience</i>.” (Emphasis added). </span></p>
<p class="p1">DFS examined underwriting guidelines and practices where an applicant who applies for life insurance, disability income insurance, or long-term care insurance has a prescription for an opioid-reversal drug but is not at risk of an opioid overdose. In reality, prescriptions for Naloxone may be issued by nurses or medical professionals to assist another individual who has overdosed on opioids, or to first responders such as firefighters or police officers.<span class="Apple-converted-space">  </span>It may also be prescribed to other individuals who have a family member or friend who is at risk for an overdose.<span class="Apple-converted-space">  </span>This accessibility to prescriptions for Naxolone is consistent with the public health and safety and the need for prevention of opioid overdoses.<span class="Apple-converted-space">  </span>According to the Center for Disease Control and Prevention, there were 47,600 opioid related overdose deaths in the U.S. in 2017.</p>
<p class="p1">According to DFS guidance, an adverse underwriting decision based solely on an applicant having a prescription for an opioid-reversal drug, violates Insurance Law § 4224.<span class="Apple-converted-space">  </span>Thus, DFS cautions that any insurer that has improperly denied an applicant for life insurance, disability income insurance, or long-term care insurance based on the applicant having been issued a prescription for an opioid-reversal drug should immediately provide the applicant the opportunity to re-apply for coverage based on an underwriting assessment that complies with the New York Insurance Law.</p>
<p class="p1"><span class="s2">DFS’ Circular Letter No. 9 comes shortly after the July 23, 2019 Supplement to Circular Letter No. 21 reminding insurers to strictly comply with all requirements concerning the issuance of prescription drugs at no cost-sharing to reduce the risk of contracting HIV.<span class="Apple-converted-space">  </span>The underlying Circular Letter No. 21 was evident of DFS’ desire to protect “consumers who are taking prudent steps to protect their health by reducing the risk of contracting HIV will be able to purchase life insurance, disability income insurance and long-term care insurance at fair and reasonable prices and without fear of unfair denials.” <span class="Apple-converted-space">  </span>It is in the public interest for individuals to take steps to mitigate the risk of contracting HIV and those individuals should not be penalized as a result. </span></p>
<p class="p1">It is evident that DFS will continue to investigate discriminatory and/or unfair practices of life and health insurers in order to promote the safety and health of the public and to ensure compliance with all statutory and regulatory requirements.</p>
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		<title>The Latest Court Decision Striking Down Regulation 208 Is A For Title Insurers</title>
		<link>https://www.insurance-advocate.com/2019/08/19/the-latest-court-decision-striking-down-regulation-208-is-a-for-title-insurers/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 19 Aug 2019 01:52:27 +0000</pubDate>
				<category><![CDATA[2019]]></category>
		<category><![CDATA[August 19]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=11754</guid>

					<description><![CDATA[<p>On August 2, 2019, Honorable Eileen A. Rakower of the Supreme Court of the State of New York, New York County, resolved certain remaining causes of action concerning the title insurance industry’s challenge to the Department of Financial Services’ (“DFS”) Insurance Regulation 208 which affected marketing and advertising practices and certain premium rate cuts. By [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/08/19/the-latest-court-decision-striking-down-regulation-208-is-a-for-title-insurers/">The Latest Court Decision Striking Down Regulation 208 Is A For Title Insurers</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1"><span class="s2">On August 2, 2019, Honorable Eileen A. Rakower of the Supreme Court of the State of New York, New York County, resolved certain remaining causes of action concerning the title insurance industry’s challenge to the Department of Financial Services’ (“DFS”) Insurance Regulation 208 which affected marketing and advertising practices and certain premium rate cuts. </span></p>
<p class="p1">By way of background, on February 20, 2018 the New York State Land Title Association, Inc. and other petitioners filed an Article 78 proceeding to annul Regulation 208 on the grounds that the provisions were “arbitrary and capricious.”<span class="Apple-converted-space">  </span>The Supreme Court granted the Petition and annulled the Regulation which was an initial victory for title insurance agents.</p>
<p class="p1">However, DFS appealed and title insurers continued to advocate against the Regulation. On January 15, 2019, the Appellate Division affirmed the Supreme Court’s decision in part, reversed in part, and remanded certain causes of action of the Petition back to Honorable Rakower.</p>
<p class="p1"><span class="s2">Specifically, the issues on remand concerned: (1) whether Section 228.3’s rate reduction violate the Insurance Law and should be annulled; (2) whether the limitations imposed by Section 228.2 are so vague as to violate of the Due Process Clause of the U.S. Constitution; (3) whether the Regulation violates the First Amendment and (4) whether the Regulation violates DFS’s authority under the State Administrative Procedures Act.</span></p>
<p class="p1">Notably, the Supreme Court invalidated the Regulation based on constitutional grounds.<span class="Apple-converted-space">  </span>With respect to the due process argument, the court explained that a regulation violates due process when it “fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement.”<span class="Apple-converted-space">  </span>The court reasoned that because Section 22.8.2(c) does not define “reasonable and customary” yet not “lavish and excessive” this “gray area in between” is so unclear “it also has the potential to chill companies from engaging in such type of conduct whatsoever.”<span class="Apple-converted-space">  </span>As such, the Regulation could be arbitrarily enforced since the standard of what is “reasonable” but not “lavish and excessive” is subject to a variety of interpretations.<span class="Apple-converted-space">  </span>Such vague language, according to the court, violates due process.</p>
<p class="p1"><span class="s2">The court also found that Section 228.2 (c)’s restrictions on political donations, charitable contributions, and advertising unfairly restrict freedom of speech and are not narrowly tailored.<span class="Apple-converted-space">  </span>To allow the Regulation to stand, would “invite[] arbitrary enforcement and chill[] corporations from engaging in these forms of constitutionally protected speech under the First Amendment.”<span class="Apple-converted-space">  </span>(Emphasis added).<span class="Apple-converted-space">  </span>Although the court recognized there may be a compelling state interest in protecting consumers from excessive spending by title insurers that could result in increased premiums, the Regulation is not narrowly tailored to that interest and is impermissibly vague. </span></p>
<p class="p1">While this is a welcome result for title insurers, on August 6, 2019, DFS Superintendent Linda A. Lacewell issued a statement on DFS’ website which suggests it may challenge the decision:</p>
<p class="p1"><span class="s2"><i>the decision fails to follow the Appellate Division’s ruling to uphold DFS’s regulatory authority to promulgate Insurance Regulation 208 for the protection of consumers from excessive title insurance rates and to enforce New York’s anti-inducement statute. DFS will continue to fight for consumers to preserve this valid and important regulation. We continue to maintain that the cost of using high-priced tickets, meals, lavish gifts and strip clubs as inducements for title insurance business should not be passed on to consumers.</i></span></p>
<p class="p1"><i>*This articles if for information purposes only and is not intended to give legal advice. For more information on this topic or other legal matters, please contact Sari at 212-941-5025 or gabay@gabaybowler.com</i></p>
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		<title>Title Agents: Bill S.2929A Revisits Regulation 208</title>
		<link>https://www.insurance-advocate.com/2019/07/29/title-agents-bill-s-2929a-revisits-regulation-208/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Sun, 28 Jul 2019 23:07:04 +0000</pubDate>
				<category><![CDATA[July 29]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=11713</guid>

					<description><![CDATA[<p>Regulations implemented by the New York State Department of Financial Services (“DFS”) last year affecting the title insurance industry regarding “acceptable marketing expenses” are being challenged by proposed legislation in the New York State Senate. By way of background, Regulation 208 was implemented by DFS to combat the alleged “unscrupulous” behavior of title agents in [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/07/29/title-agents-bill-s-2929a-revisits-regulation-208/">Title Agents: Bill S.2929A Revisits Regulation 208</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p>Regulations implemented by the New York State Department of Financial Services (“DFS”) last year affecting the title insurance industry regarding “acceptable marketing expenses” are being challenged by proposed legislation in the New York State Senate. By way of background, Regulation 208 was implemented by DFS to combat the alleged “unscrupulous” behavior of title agents in passing on expenses for meals, events, or entertainment to the consumer. Regulation 208 was designed to prevent title insurance corporations and agents from using money, deemed as “marketing costs,” to influence attorneys and real estate professionals into referring their clients. DFS was concerned, in part, that marketing costs were being built into insurance premiums, thereby increasing the costs to consumers. Regulation 208 wreaked havoc in the industry, and led to the filing by the New York State Land Title Association of an Article 78 proceeding in the New York State Supreme Court to challenge the Regulation.<br />
At the trial level, the New York State Supreme Court struck down the Regulation, but the Appellate Division reversed that decision this past January, finding that Insurance Law Section 6409(d) (concerning the giving of “other consideration or valuable thing”) is “unambiguous,” has a rational basis, and is subject to broad construction by DFS. The Appellate Division severed two provisions from the Regulation. Specifically, it agreed with the Supreme Court’s conclusion that, “there is no rational basis for DFS to impose an absolute ban on the collection of certain fees by in-house closers while permitting independent closers to collect the same fees as long as the fees are reasonable and the requisite notice is provided to consumers.” It also found no rational basis for capping fees for certain ancillary searches at 200%. The court struck down both the provision regarding an absolute ban on the collection of certain fees as well as the provision regarding capping fees, while upholding the remainder of the Regulation.<br />
Advocates have not given up the fight to reduce the impact of Regulation 208 on the title insurance industry, this time through Bill S.2929A (the “Bill”) proposed by Senator Neil Breslin. The Bill proposes to clarify what is an acceptable expense and to expressly authorize agents to pay for meals with prospective or current clients. The reasoning is because unlike other players in the insurance industry, title insurance agents do not engage in direct to consumer advertising, so insurers and agents need to be able to market themselves and their services to clients and prospective clients, as well as to attorneys and other real estate professionals. Advocates of the Bill claims this should be permissible as long as there is no direct or indirect ‘quid pro quo’ for the placement of a particular piece of title insurance business. According to Senator Breslin, this Bill, “clarifies that the mere presence of common marketing activities absent a quid pro quo does not constitute an illegal inducement under 6409(d).”<br />
If the Bill is signed into law, it will be a win for the title insurance industry, but it is not perceived favorably by DFS. Indeed, DFS has called this “a very bad bill” that will mistakenly roll back Regulation 208 at the expense of the New York homebuyers and will create loopholes to allow agents to continue bad behavior that the Regulation was designed to curtail. DFS’s position can be found in the June 6, 2019 Memorandum written by Maria T. Vullo, former Superintendent of the DFS, to the New York State Senate. That Memorandum opposes Bill S.2929A, and explains that it would “give title insurance companies and agents legislative authority to continue the illegal and unethical practices, disguised as ‘marketing activity’…” Further, the June 6th Memorandum claims that small insurers “face impossible barriers to entry” in the market because they cannot compete with the “gifting referral sources” of the larger more dominant companies.<br />
At the time of writing this article, the Bill has passed Assembly but the Senate version remains in committee and has therefore not yet been presented to the Senate for vote. With strong lobbying efforts on both sides, the fate of the Bill as well as smaller players in the industry, is unknown.</p>
<p><em>This article is for informational use only and not intended as legal advice.</em><br />
<em>Thank you to Kathyrn Jones (legal intern at Gabay &amp; Bowler) for her assistance with this article.</em></p>
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<!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2019/07/29/title-agents-bill-s-2929a-revisits-regulation-208/">Title Agents: Bill S.2929A Revisits Regulation 208</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded>
					
		
		
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		<title>Commingling of Funds</title>
		<link>https://www.insurance-advocate.com/2019/06/10/commingling-of-funds/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 10 Jun 2019 01:19:22 +0000</pubDate>
				<category><![CDATA[2019]]></category>
		<category><![CDATA[June 10]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=11484</guid>

					<description><![CDATA[<p>υAs recent New York State Department of Financial Services’ disciplinary actions show, several brokers have been the subject of disciplinary action for commingling funds insurance premium funds with business operating expense funds and/or using premium funds for personal expenses.  Other related actions have involved insurance agents collecting premium payments and failing to timely remit such [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/06/10/commingling-of-funds/">Commingling of Funds</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1"><span class="s1">υ</span>As recent New York State Department of Financial Services’ disciplinary actions show, several brokers have been the subject of disciplinary action for commingling funds insurance premium funds with business operating expense funds and/or using premium funds for personal expenses.<span class="Apple-converted-space">  </span>Other related actions have involved insurance agents collecting premium payments and failing to timely remit such funds to the applicable insurer.<span class="Apple-converted-space">  </span>As a general rule, under New York law, an insurance broker has a duty not to commingle premium funds it receives for transmissions to an insurance company nor to commingle return premiums it receives for transmission to an insured and funds must be transmitted promptly.</p>
<p class="p1">Specifically, New York Insurance Law § 2120 imposes a fiduciary duty upon insurance agents and brokers regarding funds received or collected.<span class="Apple-converted-space">  </span>This statute prohibits the commingling of any such funds with the insurance agent’s or broker’s own funds, unless there is consent to commingle.<span class="Apple-converted-space">  </span>This statute further requires “prompt” remittance of such funds, although no set number of days is specified.</p>
<p class="p1">In addition, New York State Insurance Regulation 29 (“Fiduciary responsibility of insurance agents and brokers; premium accounts”), which was promulgated to facilitate compliance with Section 2120, sets forth requirements for holding such funds and imposes limitations on withdrawals from premium accounts.<span class="Apple-converted-space">  </span>Specifically, it prohibits withdrawals from a premium account for anything “other than for payment of premiums to insurers, payment of return premiums to assureds, transfer to an operating account of (i) interest, if the principals have consented thereto in writing and (ii) commissions, or withdrawal of voluntary deposits, provided, however, that no withdrawal may be made if the balance remaining in the premium account thereafter is less than aggregate net premiums received but not remitted.”</p>
<p class="p1">Although no New York Insurance Law or regulation sets forth a specific time frame upon which an insurance agent or broker must remit such collected premiums, a standard of reasonableness would likely be imposed.<span class="Apple-converted-space">  </span>Indeed, the Office of General Counsel has opined that “where it is obvious that an insurance agent or broker failed to remit collected premiums within a reasonable period of time (i.e., keeping collected premiums until a notice of cancellation has been sent, and until the day before the policy is set to cancel, when the premiums had been sent by the insured in a timely fashion), such circumstance may be evidence of an agent’s or broker’s untrustworthiness and may form the basis of a Department investigation.” Thus, unless there is a specific agreement with the principal, any unnecessary delays in remitting premium funds should be avoided.</p>
<p class="p1">In short, absent certain exceptions, an insurance agent or broker may not commingle premium funds with non-premium funds.<span class="Apple-converted-space">  </span>Nor may an insurance broker deduct unpaid commissions from premiums collected absent a written agreement without authorization.<span class="Apple-converted-space">  </span>All funds collected should be remitted promptly, and without unnecessary delay, particularly a delay that could prejudice the insured.<span class="Apple-converted-space">  </span>It is advisable to frequently review premium accounts and any automatic payments or other withdrawals or debits that may be inappropriate such as bank services fees and to be extremely careful in delegating any online bill pay and bookkeeping duties.<span class="Apple-converted-space">  </span>A sub-licensee is the designated responsible person and therefore accountable for shortfalls in a premium account or mishandling of funds, which may go unnoticed until a check bounces or an investigation calls for the production of bank account statements. <span class="s2">[</span><span class="s3"><b><i>I</i></b></span><span class="s4"><b>A</b></span><span class="s2">]</span></p>
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<!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2019/06/10/commingling-of-funds/">Commingling of Funds</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded>
					
		
		
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		<title>Ohio National Life Insurance Company’s Termination of Trail Commissions</title>
		<link>https://www.insurance-advocate.com/2019/05/13/ohio-national-life-insurance-companys-termination-of-trail-commissions/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 13 May 2019 03:21:00 +0000</pubDate>
				<category><![CDATA[2019]]></category>
		<category><![CDATA[May 13]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=10701</guid>

					<description><![CDATA[<p>The issue of termination of trail commissions has been a popular topic in insurance industry news since Ohio National Life Insurance Company terminated trail commissions.  More specifically, by letter dated September 21, 2018, Ohio National wrote to various agents and broker-dealers “to provide notice of termination of any and all selling agreements” [effective December 12, [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/05/13/ohio-national-life-insurance-companys-termination-of-trail-commissions/">Ohio National Life Insurance Company’s Termination of Trail Commissions</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1">The issue of termination of trail commissions has been a popular topic in insurance industry news since Ohio National Life Insurance Company terminated trail commissions.<span class="Apple-converted-space">  </span>More specifically, by letter dated September 21, 2018, Ohio National wrote to various agents and broker-dealers “to provide notice of termination of any and all selling agreements” [effective December 12, 2018].<span class="Apple-converted-space">  </span>Further, according to the termination notice letter, “all individual annuity trail compensation will cease at that time.<span class="Apple-converted-space">  </span>All group variable annuity trail compensation and life insurance renewal commissions will continue to be paid per the terms of the selling agreement.”</p>
<p class="p1">In the life insurance and annuity contracts arena, there is typically a larger commission in the first year, followed by trail commissions for the life of the policy or contract.<span class="Apple-converted-space">  </span>Given that many life insurance agents rely on these trail commissions, Ohio National’s decision to terminate certain broker-dealer agreements has led to a flurry of class action and individual lawsuits, with at least 10 currently pending in courts across the country, including federal district court actions filed in Ohio, Texas, New Jersey, and California, among other states.<span class="Apple-converted-space">  </span>There are also several arbitrations pending, and the forum of private arbitration versus court may have been governed by consent to arbitration language in a particular selling agreement.</p>
<p class="p1">In the publicly filed complaint from UBS Financial Services Inc. (“UBS”), UBS alleges that Ohio National determined that the annuity contracts with guaranteed minimum income benefit (GMIB) riders were uneconomical in an environment of high regulation and low interest rates.<span class="Apple-converted-space">  </span>According to the lawsuits, Ohio National breached its selling agreements which guaranteed the payment of trail commissions until the annuities were surrendered or annuitized. UBS claims that when Ohio National determined that its GMIB rider contracts were not economical, they tried to initiate an exchange offer to persuade holders of variable annuities with GMIB riders to exchange those products for other investments, which did not necessarily go according to plan as several UBS customers decided not to accept the exchange offer and, instead, chose to remain with their current variable annuity contracts.</p>
<p class="p1">In its defense, Ohio National claims that payments were only due while the contracts were in force, and cites to language in the selling agreements, providing that it “remains in force and will be paid on a particular contract until the contract is surrendered.”<span class="Apple-converted-space">  </span>According to Ohio National, “such language unequivocally establishes that the termination of the Selling Agreement also terminated any obligation [on Ohio National] to continue paying trail commissions as to individual annuity products.”<span class="Apple-converted-space">  </span>Ohio National’s argument relies on the use of the conjunction “and” which it notes is critical to its argument; trail commissions are only payable if both the selling agreement is in force and the pertinent annuity contract has not been surrendered or annuitized.”<span class="Apple-converted-space">  </span>Since both of these joint conditions &#8212; that the selling agreement remains in force, and the particular annuity contract has not been surrendered or annuitized—Ohio National claims it has no obligation to the continued payment of trial commissions.</p>
<p class="p1">It will be interesting to see the results of the various litigations in due course and whether the courts agree with Ohio National’s interpretation of the language in the selling agreements or whether the agents are still entitled to payment of trail commissions.<span class="Apple-converted-space">  </span>It may ultimately come down to an interpretation of contract language.<span class="Apple-converted-space">  </span>For now, it is a good reminder that life agents should at least be familiar with the terms of their selling agreements because expecting to retire on trail commissions that could possibly be terminated unilaterally, could be a grave loss.<span class="Apple-converted-space">  </span>Ideally, such contracts should contain a clause for vesting of commissions for a period of years which would guarantee the agent compensation for the period of years set forth in the agreement, assuming the agreement remains in full force and effect.<span class="Apple-converted-space">  </span>In addition, a sub agent of a managing general agent, may not have the leverage to negotiate his or her contract terms, as payment to the sub-agent may be dependent on the carrier’s payment to and ongoing relationship with the managing general agent, but it is a good idea to review any applicable contracts to avoid surprises.</p>
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<!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2019/05/13/ohio-national-life-insurance-companys-termination-of-trail-commissions/">Ohio National Life Insurance Company’s Termination of Trail Commissions</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded>
					
		
		
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		<title>Liability Insurance and Gun Control</title>
		<link>https://www.insurance-advocate.com/2019/04/15/liability-insurance-and-gun-control/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 15 Apr 2019 04:04:03 +0000</pubDate>
				<category><![CDATA[2019]]></category>
		<category><![CDATA[April 15]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=10543</guid>

					<description><![CDATA[<p>Imagine if gun owners in New York are legally required to carry liability insurance?  Well, the New York State Senate seeks to impose this requirement by way of Senate Bill S2857A.  In fact, if implemented into law, gun owners would be required to purchase one million dollars of liability insurance, and to continuously maintain such [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/04/15/liability-insurance-and-gun-control/">Liability Insurance and Gun Control</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1">Imagine if gun owners in New York are legally required to carry liability insurance?<span class="Apple-converted-space">  </span>Well, the New York State Senate seeks to impose this requirement by way of Senate Bill S2857A.<span class="Apple-converted-space">  </span>In fact, if implemented into law, gun owners would be required to purchase one million dollars of liability insurance, and to continuously maintain such insurance, to cover any damage resulting from the use of such firearm.<span class="Apple-converted-space">  </span>This would amend the insurance law by adding a new “Section 2353.”<span class="Apple-converted-space">  </span>The Justification set forth in the Bill is that “Injury and death by gun has increasingly become a problem in U.S. and in New York State. In the wake of recent mass shooting incidents in Aurora, Colorado and Newtown, Connecticut; there has been a nationwide attention on gun control and public safety.”<span class="Apple-converted-space">  </span>The Justification cites to certain FBI Crime Report data.</p>
<p class="p1">Proponents of the Bill posit that the required insurance policies would protect innocent victims of gun-related accidents and violence who would be compensated for the medical care for their injuries.<span class="Apple-converted-space">  </span>It is also believed that the gun ownership liability insurance policy will serve as an incentive for owners to implement certain safety measures and to take extra precaution with respect to use of gunds.</p>
<p class="p1">Some critics of the Bill deem the insurance requirement to be an unfair “tax” on honest gun owners, that will affect those in low income households, and an interference on the Second Amendment Right, under the U.S. Constitution, “to keep and bear arms.”</p>
<p class="p1">While on its face, this Bill may be designed to protect innocent victims of gun accidents, it fails to address the fact that not all owners of firearms that result in harm to victims, possess them lawfully.<span class="Apple-converted-space">  </span>Thus, while negligent acts may be covered by a law-abiding citizen who who has a gun permit and purchases the required insurance, willful acts, such as mass shootings, would not be covered where the possessor of the firearm does not lawfully own it and/or comply with the insurance requirement, which, at $1 million, may be insufficient to address all injuries.</p>
<p class="p1">Notably, there are few express exemptions in the Bill though it specifically exempts police officers and active members of the military from its application.<span class="Apple-converted-space">  </span>The Bill attempts to address the scenario of who is deemed the “owner” and therefore responsible if a fire arm is lost or stolen, and provides that it is the registered owner’s responsibility until reported to the police. The Bill’s penalties include the immediate revocation of an owner’s gun license for failure to maintain such insurance. Will this punishment increase public safety? Only time will tell but the Bill is a step towards gun control and the protection of those who are harmed by the use or misuse of guns.</p>
<p class="p1"><span class="s2">As of March 28, 2019, the Bill is in the Senate Committee, Insurance Committee, thus, there is certainly more to come.<span class="Apple-converted-space">  </span>This is against the backdrop of the New York State Department of Financial Services’ (“DFS”) recent $7 million Consent Order entered into with a broker who sold the NRA’s “Carry Guard” insurance program in New York.<span class="Apple-converted-space">  </span>The Carry Guard program provides liability insurance to NRA members for firearm-related accidents and for legal costs in self-defense cases.<span class="Apple-converted-space">  </span>DFS contended that the Carry Guard Program is illegal because it gives liability protection to gun owners for acts where there was “intentional wrongdoing” and was violative of New York Insurance Law.<span class="Apple-converted-space">  </span>Significantly, Senate Bill S2857A, specifically contemplates liability insurance protection for “willful” acts</span>.</p>
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		<title>Summary Suspension of a DFS License</title>
		<link>https://www.insurance-advocate.com/2019/03/11/summary-suspension-of-a-dfs-license/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 11 Mar 2019 01:35:53 +0000</pubDate>
				<category><![CDATA[2019]]></category>
		<category><![CDATA[March 11]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=10435</guid>

					<description><![CDATA[<p>Typically, when an insurance agent, broker, or other licensee is investigated by the New York State Department of Financial Services (“DFS”), even if there is a violation of applicable insurance laws or regulations but the conduct does not rise to the level of “untrustworthiness” and/or “incompetence,” DFS may offer a compromise, by way of a [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/03/11/summary-suspension-of-a-dfs-license/">Summary Suspension of a DFS License</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<p class="p1">Typically, when an insurance agent, broker, or other licensee is investigated by the New York State Department of Financial Services (“DFS”), even if there is a violation of applicable insurance laws or regulations but the conduct does not rise to the level of “untrustworthiness” and/or “incompetence,” DFS may offer a compromise, by way of a stipulation, in which a respondent may admit to a statutory and/or regulatory violation and pay a penalty.<span class="Apple-converted-space">  </span>For instance, in a failure to obtain signed 2119 service fee agreements, in addition to a fine, DFS may require a licensee to return service fees collected, or otherwise make restitution.<span class="Apple-converted-space">  </span>In other instances, where, for example, DFS recommends license revocation, a hearing is held in which a licensee is provided with due process and an opportunity to challenge the recommendation of revocation. Even where a licensee timely submits a written request for a hearing, it may take numerous months until such a hearing is scheduled. All the while, the licensee remains licensed and can generally conduct business as usual, until at least a final determination by DFS is rendered following a hearing, and even longer if the decision (if unfavorable) is appealed to court by way of an Article 78 proceeding.</p>
<p class="p1">In very rare cases, however, the Superintendent of DFS may exercise its “summary suspension” power, which has the immediate effective of stripping a licensee of its license (at least temporarily), following issuance of a citation which sets forth the alleged wrongful conduct, but prior to a hearing with respect to the allegations.<span class="Apple-converted-space">  </span>This extreme power is codified in Section 401 of the State Administrative Procedure Act (“SAPA”), which applies to adjudicatory proceedings of state agencies where notice and a hearing in connection with licensing is required.<span class="Apple-converted-space">  </span>DFS, like other state agencies, may exercise this power under SAPA if the agency finds that “public health, safety, or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, summary suspension of a license may be ordered.”<span class="Apple-converted-space">  </span>Effectively, a license is immediately suspended until a hearing, and SAPA requires the hearing to be “promptly instituted and determined.”</p>
<p class="p1">Recently, on January 25, 2019, DFS invoked its summary suspension power against a Brooklyn based insurance brokerage &#8211; Superior Service Group Ltd. and its sublicensee &#8211; and issued an order, without any details of the conduct at issue, suspending respondents’ insurance producer licenses until further order of the Superintendent.<span class="Apple-converted-space">  </span>On January 31, 2019, DFS issued a Circular Letter notifying all insurers authorized to do business in New York of the suspension and instructing all such insurers to report any indication of respondents’ selling, soliciting or negotiating insurance, adjusting insurance claims, or other action in violation of the order.</p>
<p class="p1">Eventually, when DFS’ investigation is complete and the proceeding concludes, the basis for the extreme measure of summary suspension should be publicly available by way of a Freedom of Information Law Request, and may even be gleamed from DFS’ monthly summary of disciplinary actions. <span class="Apple-converted-space">  </span>There are not many instances of summary suspension by DFS in recent years, though conduct such as the mishandling of premium funds would likely so effect the public welfare to “imperatively require(s) emergency action.”</p>
<p class="p1">Of note, a summary suspension order alone is not a final determination by a state agency.<span class="Apple-converted-space">  </span>As such, a court would not have subject matter jurisdiction of an appeal from a summary suspension order.<span class="Apple-converted-space">  </span>Rather, only following a hearing before DFS and the issuance of a final determination, can a respondent appeal the final determination by way of an Article 78 proceeding in court, and even then there is a very limited window to timely do so and a respondent would have to successfully demonstrate the DFS’ decision was “arbitrary and capricious.”</p>
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		<title>NYDFS Issues Numerous Disciplinary Actions</title>
		<link>https://www.insurance-advocate.com/2019/02/11/nydfs-issues-numerous-disciplinary-actions/</link>
		
		<dc:creator><![CDATA[Sari Gabay]]></dc:creator>
		<pubDate>Mon, 11 Feb 2019 01:00:34 +0000</pubDate>
				<category><![CDATA[2019]]></category>
		<category><![CDATA[February 11]]></category>
		<category><![CDATA[Legal Update]]></category>
		<guid isPermaLink="false">https://www.insurance-advocate.com/?p=10315</guid>

					<description><![CDATA[<p>Crackdown on Health Plans&#146; Non-Compliance with Contraceptive Coverage The New York State Department of Financial Services (&#147;DFS&#148;) closed out the last quarter of 2018 issuing numerous disciplinary actions, with failing to disclose information on an original or renewal application, as the most common violation, with nominal fines.&#160; DFS issued heftier fines, however, where licenses expired [&#8230;]</p>
The post <a href="https://www.insurance-advocate.com/2019/02/11/nydfs-issues-numerous-disciplinary-actions/">NYDFS Issues Numerous Disciplinary Actions</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></description>
										<content:encoded><![CDATA[<h4 class="p1"><span class="s1">Crackdown on Health Plans&#146; Non-Compliance with Contraceptive Coverage</span></h4>
<p class="p1">The New York State Department of Financial Services (&#147;DFS&#148;) closed out the last quarter of 2018 issuing numerous disciplinary actions, with failing to disclose information on an original or renewal application, as the most common violation, with nominal fines.<span class="Apple-converted-space">&nbsp; </span>DFS issued heftier fines, however, where licenses expired or lapsed and the individual or entity transacted insurance business during these periods of lapse.<span class="Apple-converted-space">&nbsp; </span>Such fines in this period ranged from $10,000 to $29,250, presumably based on the volume of business conducted.</p>
<p class="p1">Most recently, in the January 4, 2019 list of disciplinary actions, fines continued in this area for, among other violations, failing to disclose a criminal conviction, failing to disclose another state agency&#146;s revocation, and failing to disclose within 30 days of a pretrial hearing that respondent was the subject of a criminal prosecution.<span class="Apple-converted-space">&nbsp; </span>Most notably, however, the majority of the fines issued thus far in 2019 appear to be the result of DFS&#146; investigation into and crack down on various health insurers, health service plans, and health maintenance organizations (collectively referred to here as &#147;health plans&#148;), in connection with failing to comply with contraceptive coverage requirements under New York law.</p>
<p class="p1">The focus of the investigation appears to have been in 2016, with respect to denying coverage of required FDA approved contraceptives (or their equivalents) and/or for failing to appropriately pay claims and/or provide accurate information to consumers.</p>
<p class="p1">By way of background, New York Insurance Law requires insurers that provide coverage for prescription drugs to include coverage for contraceptive drugs and devices approved by the FDA or generic equivalents.<span class="Apple-converted-space">&nbsp; </span>In addition, as a general matter, New York insurance law also requires such insurers and health plans to include coverage for preventative care and screenings, including contraceptive drugs and devices, at no cost-sharing.<span class="Apple-converted-space">&nbsp; </span>There are at least 18 contraceptive methods for women approved by the FDA. New York law requires that health plans provide coverage for all contraceptive drugs and devices and must provide coverage with no cost-sharing for at least one form of contraception within each of the methods identified for women by the FDA.<span class="Apple-converted-space">&nbsp; </span>Further, health plans must provide complete and accurate information regarding contraceptive coverage to consumers.<span class="Apple-converted-space">&nbsp; </span>These requirements and additional guidelines are summarized in a January 21, 2017 Supplement No. 1 to Insurance Circular Letter No. 1 (2003).</p>
<p class="p1">Following its Circular Letter, DFS published a February 2017 report summarizing the results of its investigation into approximately 15 health plans contacted and issues with respect to inaccurate or inconsistent information and failures to adhere to New York law with respect to contraceptive drugs and devices.<span class="Apple-converted-space">&nbsp; </span>The investigation presumably led to the numerous disciplinary actions, published by DFS on January 4, 2019, against various health plans.<span class="Apple-converted-space">&nbsp; </span>As penalties, DFS&#146;s consent orders require, among other things, that restitution be made to all affected policyholders, and that claims examiners be re-trained on the appropriate procedures for the adjudication of claims for contraception coverage and that the health plans at issue provide proof of corrective action implemented.<span class="Apple-converted-space">&nbsp; </span>The fines imposed in this area, against at least eight companies ranged with the most significant amounts at $85,000, $118,000 and $228,822.<span class="Apple-converted-space">&nbsp; </span>DFS&#146;s investigation in this area and crackdown demonstrates its concern on ensuring health plans properly provide contraceptive drugs and devices to consumers.</p>
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<!--/themify_builder_content-->The post <a href="https://www.insurance-advocate.com/2019/02/11/nydfs-issues-numerous-disciplinary-actions/">NYDFS Issues Numerous Disciplinary Actions</a> first appeared on <a href="https://www.insurance-advocate.com">Insurance Advocate</a>.]]></content:encoded>
					
		
		
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