The office of General Counsel issued the following informal opinion on August 3, 2000, representing the position of the New York State Insurance Department.Re: Revocation of Domestic Insurers license.
1. May the Insurance Department suspend or revoke a domestic insurers license for failure to comply with requirements of the New York Insurance Law?
2. Does the Department have jurisdiction to take action against employers who mislead their employees about their health insurance plans?
1. Yes. Various provisions of the Insurance Law address this. N.Y. Ins. Law § 1104 (c) (McKinney 2000) authorizes the Superintendent to "suspend the license, restrict the license authority, or limit the amount of premiums written in this state" of certain insurers, including domestic insurers, in regard to an insurers inadequate surplus in relation to outstanding liabilities or financial needs.
Article 74 of the N.Y. Ins. Law (McKinney 2000) provides for the rehabilitation, liquidation, conservation, and dissolution of insurers, including domestic insurers. One of the grounds which permits the Superintendent to apply for an order to liquidate the business of a domestic insurer is that the insurer willfully violated any state law. (N.Y. Ins. Law §§ 7402 (f) and 7404 (McKinney 2000)).
2. No. The answer to this question may be found within the federal Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., enforcement of which is beyond our jurisdiction.
The questions posed lack a factual foundation, which precludes further analysis.
For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.