New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

The Office of General Counsel issued the following informal opinion on December 27, 2001, representing the position of the New York State Insurance Department.

Re: Long-term care insurance Guaranty Fund Protection

Question Presented:

Is a long-term care insurance policy issued by a property/casualty insurer, covered under any guaranty fund in New York?

Conclusion:

No. The two relevant guaranty funds are the Property/Casualty Insurance Security Fund, established under N.Y. Ins. Law Art. 76 (McKinney 2000), and the security fund operated by the Life Insurance Company Guaranty Corporation of New York, established under N.Y. Ins. Law Art. 77 (McKinney 2000). Neither fund covers a long-term care insurance policy issued by a property/casualty insurer.

Facts:

The inquirer wants to know whether a long-term care insurance policy issued by a property/casualty insurer, which underwrites life, long-term care, and property and casualty insurance, is covered by a guaranty fund in New York.

Analysis:

The Property/Casualty Insurance Security Fund is operated in accordance with N. Y. Ins. Law Art. 76 (McKinney 2000) and protects holders of specified insurance policies which do not include accident and health insurance policies other than limited to a narrow area of workers’ compensation policies (N. Y. Ins. Law § 7603(a) (McKinney 2000)). Long-term care insurance is included within the meaning of accident and health insurance as defined in N. Y. Ins. Law § 1113(a)(3) (McKinney 2000). Accordingly, such policies are not covered by the Article 76 Fund.

Nor can the policy in question, issued by a property/casualty insurer, be covered under the fund operated by the Life Insurance Company Guaranty Corporation of New York, membership in which is restricted to licensed life insurers. N.Y. Ins. Law § 7705(h) (McKinney 2000).

In sum, the only long-term care insurance policies covered by a security fund are those issued to New York State residents by a life insurer licensed to transact accident and health insurance in New York. N.Y. Ins. Law §§ 7703(a) and 7705(d) (McKinney 2000).

For further information you may contact Associate Attorney Jeffrey A. Stonehill at the New York City Office.