S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         3594
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                   January 27, 2015
                                      ___________
       Introduced  by  M.  of  A.  ROSENTHAL  --  read once and referred to the
         Committee on Insurance
       AN ACT to amend the insurance law, in relation to pet insurance
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  The insurance law is amended by adding a new article 42-A
    2  to read as follows:
    3                                ARTICLE 42-A
    4                                PET INSURANCE
    5  SECTION 4250. DEFINITIONS.
    6          4251. APPLICABILITY.
    7          4252. DISCLOSURES.
    8          4253. PENALTIES.
    9          4254. VIOLATIONS.
   10          4255. RULES AND REGULATIONS.
   11    S 4250. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING DEFI-
   12  NITIONS SHALL APPLY:
   13    (A) "CHRONIC CONDITION" SHALL MEAN A CONDITION THAT CAN BE TREATED  OR
   14  MANAGED, BUT NOT CURED.
   15    (B)  "CONGENITAL  ANOMALY  OR DISORDER" SHALL MEAN A CONDITION THAT IS
   16  PRESENT FROM BIRTH, WHETHER INHERITED  OR  CAUSED  BY  THE  ENVIRONMENT,
   17  WHICH MAY CAUSE OR OTHERWISE CONTRIBUTE TO ILLNESS OR DISEASE.
   18    (C)  "HEREDITARY  DISORDER"  SHALL  MEAN AN ABNORMALITY THAT IS GENET-
   19  ICALLY TRANSMITTED FROM PARENT TO OFFSPRING AND  MAY  CAUSE  ILLNESS  OR
   20  DISEASE.
   21    (D) "PET INSURANCE" SHALL MEAN AN INDIVIDUAL OR GROUP INSURANCE POLICY
   22  THAT PROVIDES COVERAGE FOR VETERINARY EXPENSES.
   23    (E)  "PREEXISTING  CONDITION"  SHALL  MEAN  ANY  CONDITION FOR WHICH A
   24  VETERINARIAN PROVIDED MEDICAL ADVICE, THE PET RECEIVED TREATMENT FOR, OR
   25  THE PET DISPLAYED SIGNS OR SYMPTOMS CONSISTENT WITH THE STATED CONDITION
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD07223-01-5
       A. 3594                             2
    1  PRIOR TO THE EFFECTIVE DATE OF A PET  INSURANCE  POLICY  OR  DURING  ANY
    2  WAITING PERIOD.
    3    (F)  "VETERINARIAN" SHALL MEAN AN INDIVIDUAL WHO HOLDS A VALID LICENSE
    4  TO PRACTICE VETERINARY MEDICINE FROM AN APPROPRIATE LICENSING ENTITY  IN
    5  THE JURISDICTION IN WHICH HE OR SHE PRACTICES.
    6    (G) "VETERINARY EXPENSES" SHALL MEAN THE COSTS ASSOCIATED WITH MEDICAL
    7  ADVICE,  DIAGNOSIS,  CARE,  OR  TREATMENT  PROVIDED  BY  A VETERINARIAN,
    8  INCLUDING, BUT NOT LIMITED TO, THE COST OF DRUGS PRESCRIBED BY A VETERI-
    9  NARIAN.
   10    (H) "WAITING OR AFFILIATION PERIOD" SHALL  MEAN  THE  PERIOD  OF  TIME
   11  SPECIFIED IN A PET INSURANCE POLICY THAT IS REQUIRED TO TRANSPIRE BEFORE
   12  SOME OR ALL OF THE COVERAGE IN THE POLICY CAN BEGIN.
   13    S  4251.  APPLICABILITY.  A  POLICY OF PET INSURANCE THAT IS MARKETED,
   14  ISSUED, AMENDED, RENEWED, OR DELIVERED, WHETHER OR NOT IN NEW YORK, TO A
   15  NEW YORK RESIDENT, ON  AND  AFTER  JULY  FIRST,  TWO  THOUSAND  SIXTEEN,
   16  REGARDLESS  OF  THE  SITUS OF THE CONTRACT OR GROUP POLICYHOLDER, OR THE
   17  JURISDICTION IN WHICH THE CONTRACT WAS ISSUED OR DELIVERED,  IS  SUBJECT
   18  TO THIS ARTICLE.
   19    S  4252. DISCLOSURES.  (A) AN INSURER TRANSACTING PET INSURANCE IN NEW
   20  YORK SHALL DISCLOSE ALL OF THE FOLLOWING TO CONSUMERS:
   21    (1) IF THE POLICY EXCLUDES COVERAGE DUE TO ANY OF THE FOLLOWING:
   22    (I) A PREEXISTING CONDITION.
   23    (II) A HEREDITARY DISORDER.
   24    (III) A CONGENITAL ANOMALY OR DISORDER.
   25    (IV) A CHRONIC CONDITION.
   26    (2) IF THE POLICY INCLUDES ANY OTHER EXCLUSION, THE  FOLLOWING  STATE-
   27  MENT:  "OTHER  EXCLUSIONS  MAY  APPLY.  PLEASE  REFER  TO THE EXCLUSIONS
   28  SECTION OF THE POLICY FOR MORE INFORMATION" SHALL BE INCLUDED IN A  FONT
   29  LARGE ENOUGH TO BE EASILY VISIBLE.
   30    (3)  ANY  POLICY  PROVISION  THAT LIMITS COVERAGE THROUGH A WAITING OR
   31  AFFILIATION PERIOD, A DEDUCTIBLE, COINSURANCE, OR AN ANNUAL OR  LIFETIME
   32  POLICY LIMIT.
   33    (4)  WHETHER  THE INSURER REDUCES COVERAGE OR INCREASES PREMIUMS BASED
   34  ON THE INSURED'S CLAIM HISTORY.
   35    (B) (1) IF A PET INSURER USES ANY OF THE DEFINITIONAL  TERMS  OF  THIS
   36  ARTICLE  IN  A  POLICY OF PET INSURANCE, THE INSURER SHALL USE THE DEFI-
   37  NITION OF THOSE TERMS AS SET FORTH IN THIS ARTICLE AND INCLUDE THE DEFI-
   38  NITION OF THE TERM IN THE POLICY. THE PET INSURER SHALL ALSO  MAKE  THAT
   39  DEFINITION  AVAILABLE  THROUGH  A LINK ON THE MAIN PAGE OF THE INSURER'S
   40  INTERNET WEBSITE.
   41    (2) NOTHING IN THIS ARTICLE IN ANY WAY PROHIBITS OR LIMITS  THE  TYPES
   42  OF  EXCLUSIONS  PET  INSURERS MAY USE IN THEIR POLICIES UNLESS OTHERWISE
   43  STIPULATED, NOR DOES IT REQUIRE PET INSURERS TO HAVE ANY OF THE  LIMITA-
   44  TIONS  OR  EXCLUSIONS  DEFINED  IN THIS ARTICLE, UNLESS OTHERWISE STIPU-
   45  LATED.
   46    (C) A PET INSURER SHALL CLEARLY DISCLOSE A SUMMARY DESCRIPTION OF  THE
   47  BASIS  OR FORMULA ON WHICH THE INSURER DETERMINES CLAIM PAYMENTS UNDER A
   48  PET INSURANCE POLICY WITHIN THE POLICY AND THROUGH A LINK  ON  THE  MAIN
   49  PAGE OF THE INSURER'S INTERNET WEBSITE.
   50    (D)  A  PET  INSURER  THAT  USES A BENEFIT SCHEDULE TO DETERMINE CLAIM
   51  PAYMENTS UNDER A PET INSURANCE POLICY SHALL DO BOTH OF THE FOLLOWING:
   52    (1) CLEARLY DISCLOSE THE APPLICABLE BENEFIT SCHEDULE  IN  THE  POLICY;
   53  AND
   54    (2)  DISCLOSE  ALL BENEFIT SCHEDULES USED BY THE INSURER UNDER ITS PET
   55  INSURANCE POLICIES THROUGH A LINK ON THE  MAIN  PAGE  OF  THE  INSURER'S
   56  INTERNET WEBSITE.
       A. 3594                             3
    1    (E) A PET INSURER THAT DETERMINES CLAIM PAYMENTS UNDER A PET INSURANCE
    2  POLICY  BASED  ON  USUAL  AND CUSTOMARY FEES, OR ANY OTHER REIMBURSEMENT
    3  LIMITATION BASED ON  PREVAILING  VETERINARY  SERVICE  PROVIDER  CHARGES,
    4  SHALL DO BOTH OF THE FOLLOWING:
    5    (1)  INCLUDE  A  USUAL  AND  CUSTOMARY FEE LIMITATION PROVISION IN THE
    6  POLICY THAT CLEARLY DESCRIBES THE INSURER'S BASIS FOR DETERMINING  USUAL
    7  AND  CUSTOMARY  FEES  AND HOW THAT BASIS IS APPLIED IN CALCULATING CLAIM
    8  PAYMENTS; AND
    9    (2) DISCLOSE THE INSURER'S BASIS FOR DETERMINING USUAL  AND  CUSTOMARY
   10  FEES THROUGH A LINK ON THE MAIN PAGE OF THE INSURER'S INTERNET WEBSITE.
   11    (F)  THE  INSURER  SHALL  CREATE  A  SUMMARY  OF ALL POLICY PROVISIONS
   12  REQUIRED IN THIS  SECTION  INTO  A  SEPARATE  DOCUMENT  TITLED  "INSURER
   13  DISCLOSURE OF IMPORTANT POLICY PROVISIONS."
   14    (G) THE INSURER SHALL POST THE "INSURER DISCLOSURE OF IMPORTANT POLICY
   15  PROVISIONS" DOCUMENT REQUIRED IN THIS SECTION THROUGH A LINK ON THE MAIN
   16  PAGE OF THE INSURER'S INTERNET WEBSITE.
   17    (H) (1) IN CONNECTION WITH THE ISSUANCE OF A NEW PET INSURANCE POLICY,
   18  THE  INSURER  SHALL  PROVIDE  THE  CONSUMER  WITH A COPY OF THE "INSURER
   19  DISCLOSURE OF IMPORTANT POLICY PROVISIONS" DOCUMENT REQUIRED PURSUANT TO
   20  THIS SECTION IN AT LEAST TWELVE POINT TYPE WHEN IT DELIVERS THE POLICY.
   21    (2) IN ADDITION, THE PET INSURANCE POLICY SHALL HAVE  CLEARLY  PRINTED
   22  THEREON  OR ATTACHED THERETO A NOTICE STATING THAT, AFTER RECEIPT OF THE
   23  POLICY BY THE OWNER, THE POLICY MAY  BE  RETURNED  BY  THE  INSURED  FOR
   24  CANCELLATION  BY  DELIVERING  IT  OR MAILING IT TO THE INSURER OR TO THE
   25  AGENT THROUGH WHOM IT WAS PURCHASED.
   26    (I) THE PERIOD OF TIME SET FORTH BY THE  INSURER  FOR  RETURN  OF  THE
   27  POLICY  SHALL BE CLEARLY STATED ON THE NOTICE, AND THIS FREE LOOK PERIOD
   28  SHALL BE NOT LESS THAN THIRTY DAYS.  THE INSURED MAY RETURN  THE  POLICY
   29  TO THE INSURER OR THE AGENT THROUGH WHOM THE POLICY WAS PURCHASED AT ANY
   30  TIME DURING THE FREE LOOK PERIOD SPECIFIED IN THE NOTICE.
   31    (II)  THE DELIVERY OR MAILING OF THE POLICY BY THE INSURED PURSUANT TO
   32  THIS SECTION SHALL VOID THE POLICY FROM THE BEGINNING, AND  THE  PARTIES
   33  SHALL  BE  IN  THE SAME POSITION AS IF A POLICY OR CONTRACT HAD NOT BEEN
   34  ISSUED.
   35    (III) ALL PREMIUMS PAID AND ANY POLICY FEE PAID FOR THE  POLICY  SHALL
   36  BE  REFUNDED  TO  THE  INSURED WITHIN THIRTY DAYS FROM THE DATE THAT THE
   37  INSURER IS NOTIFIED OF THE CANCELLATION.   HOWEVER, IF THE  INSURER  HAS
   38  PAID  ANY CLAIM, OR HAS ADVISED THE INSURED IN WRITING THAT A CLAIM WILL
   39  BE PAID, THE THIRTY DAY FREE LOOK RIGHT  PURSUANT  TO  THIS  SECTION  IS
   40  INAPPLICABLE  AND INSTEAD THE POLICY PROVISIONS RELATING TO CANCELLATION
   41  APPLY TO ANY REFUND.
   42    (I) THE DISCLOSURES REQUIRED IN THIS SECTION SHALL BE IN  ADDITION  TO
   43  ANY OTHER DISCLOSURE REQUIREMENTS REQUIRED BY LAW OR REGULATION.
   44    S  4253.  PENALTIES.    (A)  A PERSON WHO VIOLATES A PROVISION OF THIS
   45  ARTICLE IS LIABLE TO THE STATE FOR A CIVIL PENALTY TO BE  DETERMINED  BY
   46  THE  SUPERINTENDENT,  NOT  TO  EXCEED  FIVE  THOUSAND  DOLLARS  FOR EACH
   47  VIOLATION, OR, IF THE VIOLATION WAS WILLFUL,  A  CIVIL  PENALTY  NOT  TO
   48  EXCEED  TEN THOUSAND DOLLARS FOR EACH VIOLATION.  THE SUPERINTENDENT MAY
   49  ESTABLISH THE ACTS THAT CONSTITUTE A DISTINCT VIOLATION FOR PURPOSES  OF
   50  THIS  SECTION.  HOWEVER, WHEN THE ISSUANCE, AMENDMENT, OR SERVICING OF A
   51  POLICY OR ENDORSEMENT IS INADVERTENT, ALL OF  THOSE  ACTS  CONSTITUTE  A
   52  SINGLE VIOLATION FOR PURPOSES OF THIS SECTION.
   53    (B) THE PENALTY IMPOSED BY THIS SECTION SHALL BE IMPOSED BY AND DETER-
   54  MINED  BY  THE  SUPERINTENDENT.  THE  PENALTY IMPOSED BY THIS SECTION IS
   55  APPEALABLE.
       A. 3594                             4
    1    S 4254. VIOLATIONS.  (A) WHENEVER THE SUPERINTENDENT SHALL HAVE REASON
    2  TO BELIEVE THAT A PERSON HAS ENGAGED OR IS ENGAGING IN THIS STATE  IN  A
    3  VIOLATION  OF  THIS ARTICLE, AND THAT A PROCEEDING BY THE SUPERINTENDENT
    4  IN RESPECT THERETO WOULD BE TO THE INTEREST OF THE  PUBLIC,  HE  OR  SHE
    5  SHALL ISSUE AND SERVE UPON THAT PERSON AN ORDER TO SHOW CAUSE CONTAINING
    6  A STATEMENT OF THE CHARGES IN THAT RESPECT, A STATEMENT OF THAT PERSON'S
    7  POTENTIAL  LIABILITY  UNDER THIS PART, AND A NOTICE OF A HEARING THEREON
    8  TO BE HELD AT A TIME AND PLACE FIXED THEREIN, WHICH SHALL  NOT  BE  LESS
    9  THAN THIRTY DAYS AFTER THE SERVICE THEREOF, FOR THE PURPOSE OF DETERMIN-
   10  ING  WHETHER  THE SUPERINTENDENT SHOULD ISSUE AN ORDER TO THAT PERSON TO
   11  PAY THE PENALTY IMPOSED BY THIS ARTICLE AND TO CEASE  AND  DESIST  THOSE
   12  METHODS, ACTS, OR PRACTICES, OR ANY OF THEM, THAT VIOLATE THIS ARTICLE.
   13    (B) IF THE CHARGES ARE FOUND TO BE JUSTIFIED, THE SUPERINTENDENT SHALL
   14  ISSUE  AND  CAUSE  TO BE SERVED UPON THAT PERSON AN ORDER REQUIRING THAT
   15  PERSON TO PAY THE PENALTY IMPOSED BY  THIS  ARTICLE  AND  TO  CEASE  AND
   16  DESIST FROM ENGAGING IN THOSE METHODS, ACTS, OR PRACTICES FOUND TO BE IN
   17  VIOLATION OF THIS ARTICLE.
   18    (C)  HEARINGS SHALL BE CONDUCTED ACCORDING TO THE PROCEDURE DESIGNATED
   19  BY THE SUPERINTENDENT.
   20    (D) PARTIES TO SUCH HEARINGS SHALL BE ENTITLED TO HAVE THE PROCEEDINGS
   21  AND THE ORDER REVIEWED BY MEANS OF ANY REMEDY  PROVIDED  BY  THE  SUPER-
   22  INTENDENT.
   23    S  4255.  RULES AND REGULATIONS.  THE SUPERINTENDENT MAY ADOPT REASON-
   24  ABLE RULES AND REGULATIONS, AS ARE NECESSARY TO ADMINISTER THIS ARTICLE,
   25  IN ACCORDANCE WITH EXISTING PROCEDURES UNDER THIS CHAPTER.
   26    S 2. This act shall take effect on the one hundred eightieth day after
   27  it shall have become a law.