The Office of General Counsel issued the following opinion on January 23, 2003, representing the position of the New York State Insurance Department.
Re: Group Life Insurance & Coverage of Grandchildren
May a grandparent include his or her grandchild as an insured under a group life insurance policy?
If the grandchild is dependent upon the grandparent, the grandparent may add the grandchild as an insured individual.
By letter of October 2, 2002, this Office indicated that group health insurance policies and contracts issued in accordance with New York Insurance Law § 4235(c) (McKinney 2000 & Supp. 2003) could cover grandchildren of insured individuals as dependents, provided that the grandchildren were dependent upon the grandparent. While the contract involved in the earlier inquiry was issued by a Health Maintenance Organization, the same conclusion would be reached with respect to policies and contracts issued by other insurers. This present inquiry concerns the amendment made to New York Insurance Law § 4216(f) by 2002 N.Y. Laws 542, and whether such amendment affects the coverage of grandchildren by group life insurance policies issued in accordance with New York Insurance Law § 4216 (McKinney 2000 & Supp. 2003).
New York Insurance Law § 4216(f) presently provides:
Any policy of group life insurance may include provisions for the payment by the insurer of life insurance benefits upon the death of the spouse of the insured employee or member or his or her child dependent upon him or her for support and maintenance or any other person dependent upon the insured employee or member, provided that insurance upon the life of the spouse or other person shall not exceed the amount of insurance for which the employee or member is eligible, nor shall the insurance upon the life of each dependent child so insured exceed twenty-five thousand dollars. A policy of insurance issued in accordance with paragraph three of subsection (b) of this section, while it may provide coverage for a spouse of the insured employee or member, it shall not, however, provide coverage for a dependent child of the insured employee or member. An insurer providing group life insurance for a spouse or dependent children shall require evidence of insurability sufficient to protect against substantial adverse selection.
It is the position of this Department that, if the grandchild is dependent upon the grandparent, such grandchild could be covered under a group life insurance policy. Since dependent coverage is permissive, an insurer may exercise its business judgment as to whether to include grandchildren among those entitled to coverage
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.