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New York State Seal

STATE OF NEW YORK
INSURANCE DEPARTMENT

160 WEST BROADWAY
NEW YORK, NEW YORK 10013

NOTE: WITHDRAWN EFFECTIVE FEBRUARY 5, 2010

Circular Letter No. 12 (1997)
July 9, 1997

                                        
TO: ALL MOTOR VEHICLE SELF-INSURERS AND INSURERS AUTHORIZED TO WRITE MOTOR VEHICLE INSURANCE IN NEW YORK STATE
RE: REDUCTION IN NO-FAULT LOSS OF EARNINGS BENEFITS FOR QUALIFIED WAGE CONTINUATION PLANS
Section 5102(a)(2) of the Insurance Law contains a provision that 
requires insurers to reduce gross earnings from work by benefits paid under
what have become known as "qualified wage continuation plans" when
calculating No-Fault benefits payable for loss of earnings.

In order for a particular wage continuation plan to qualify for
purposes of the aforementioned provision, it must meet all of the following
three conditions:

        (1)  the applicant must be entitled to receive the same level of
wage continuation benefits for a subsequent unrelated accident or illness
when he or she returns to work after recovering from the injuries sustained
in the motor vehicle accident;

        (2)  benefits for a subsequent unrelated accident must be equal
in both time and amount to the wage continuation benefits to which the
applicant was entitled as a result of the injuries suffered in the motor
vehicle accident; and

        (3)  wage continuation for a subsequent disability must immediately 
available, without any requirement that the applicant work a stated period 
of time before full benefits are restored.

If these three conditions are met, the plan will generally qualify.

For plans that provide benefits less than 100% of the employees'
salary the plan must provide a level of benefits that exceed the amount
required to satisfy the New York State Disability Benefits Law in order
to be a qualified plan. Insurers should be reminded that the New York State 
Disability Benefits are still applied as a statutory offset to No-Fault lost 
earnings payments.

In order to provide for consistent application of this provision,
the Insurance Department has been reviewing plans submitted by insurers 
and employers and classifying them as either "qualified" or "non-qualified".  
The lists appended hereto contain the plans reviewed to date and supersede
previous lists.

Insurers are reminded that pursuant to Section 2330 of the Insurance
Law insureds covered by a "qualified wage continuation plan" are entitled to a
premium reduction to reflect the insurer's reduced exposure to loss.  
Insurers must grant the premium reduction upon receipt of information that 
the insured is entitled to benefits under a qualified wage continuation plan.

Insurers are again requested to submit for approval, to the address
shown below, details of any other plans that they believe may qualify.  All
plans submitted will be reviewed and, periodically, the Department will 
issue revised lists of qualified and non-qualified wage continuation plans.  
Please note that long-term disability plans,  which generally become 
effective six months after the date disability begins, are not qualified
wage continuation plans. Such plans and any questions regarding this 
Circular Letter should be submitted to:


                        Ms.Hoda S. Nairooz
                        Senior Insurance Examiner
                        Property & Casualty Insurance Bureau
                        New York State Insurance Department
                        160 West Broadway
                        New York, New York 10013
                        Telephone: (212) 602-0334


                                Very truly yours,





                                Stewart Keir, CPCU, CFE CIE
                                Assistant Deputy Superintendent & Chief
                                Property/Casualty Bureau