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 August 27, 2002, representing the position of the New York State Insurance Department.

Re: N.Y.S. Guaranty Fund- Group Health Plans

Question Presented:

Does New York have a required guaranty fund that would apply to group health plans issued by N.Y. Ins. Law Article 43 insurance companies and N.Y. Public Health Law Article 44 Health Maintenance Organizations ("HMO’s")?

Conclusion:

No. New York does not have a required guaranty fund that applies to health insurance benefits provided by Article 43 insurers or HMO’s. However, N.Y. Ins. Law Article 77- The Life Insurance Company Guaranty Corporation of New York Act (the "Act"), provides protection to New York State residents to whom contractual obligations are owed under health insurance policies issued by life insurance companies.

Facts:

No additional facts were given.

Analysis:

There does not exist a New York State guaranty fund applicable to health insurance benefits provided by an HMO or under a health insurance plan issued by an Article 43 insurer. The only provision that provides protection to New York State residents to whom contractual obligations are owed under health insurance policies or plans is when the policy is issued by a life insurance company, pursuant to N.Y. Ins. Law § 7702 (McKinney 2000).

N.Y. Ins. Law § 7703 (McKinney 2000), which provides for the "Scope" of Article 77, states that Article 77, "shall apply to . . . health insurance policies . . . issued to a resident by a life insurance company licensed to transact life or health insurance or annuities in this state at the time the policy, contract or agreement was issued or at the time it became an impaired or insolvent insurer, as the case may be."

Therefore, protection pursuant to Insurance Law Article 77 is conditioned on the health insurance policy having been issued to a New York State resident by a life insurance company licensed to transact accident and health insurance in New York State.

For further information, you may contact Senior Attorney Meredith S. Kaufer at the New York City