The Office of General Counsel issued the following opinion on June 18, 2003, representing the position of the New York State Insurance Department.
Re: Insurance Coverage of Domestic Partners
May a group accident & health insurance policy insuring a holder of a bank issued credit card also insure the cardholders domestic partner?
A group accident & health insurance policy issued in New York insuring a holder of a bank issued credit card may not insure a domestic partner because such policy may not cover any person other than the cardholder.
A bank has purchased, for its credit cardholders, a group insurance policy that provides a specified benefit upon injury or death resulting from an accident. Recently, the insurer that issued the policy indicated that a cardholder could add his or her spouse as an insured under the policy. The insurer also stated that the law of the state of a cardholders residence would determine whether a cardholder could add a domestic partner as an insured.
Accidental Death and Dismemberment (AD&D) coverage is a subset of accident & health insurance. New York Insurance Law § 4325(c)(1) (McKinney 2000 and 2003 Supplement) sets forth the groups to which an accident & health insurance policy may be issued. New York Insurance Law § 4235(c)(1)(L) authorizes:
A policy issued to any organization, or the trustee or trustees of a trust established, or participated in, by one or more of such organizations, to insure certain persons subject to the following: (i) The organization must be: (I) A bank, retailer or other issuer of a credit card, charge card or payment card which can be used to buy goods or services, and the policy must insure holders of that card; . . . (ii) Except for a credit union . . . the organization or organizations shall have a minimum of two hundred insured persons at the policy's date of issue. (iii) The premium for the policy shall be paid by the organization or trustees either wholly from funds contributed by the organization or by the insured individuals, or from funds contributed jointly by the organization and insured individuals. . . . (iv) The amounts of insurance under the policy shall be based upon some plan precluding individual selection either by the insured persons or by the organization. . . . (vi) The premium charged must be reasonable in relation to the benefits provided.
New York Insurance Law §4235(f)(1) provides:
Any policy of group accident, group health or group accident and health insurance may include provisions for the payment by the insurer of benefits for expenses incurred for the employee or other member of the insured group, his spouse, his child or children, or other persons chiefly dependent upon him for support and maintenance[.]
It is the position of this Department, based upon the determination of the Court of Appeals in Braschi v. Stahl Associates, 74 N.Y.2d 201, 544 N.Y.S. 2d 784 (1989) (holding that a domestic partner could qualify as "family" under New Yorks rent regulations statutes), that family should not be restricted to those people who have formalized their relationship, and that the law does not prohibit coverage of domestic partners, provided there is a showing of economic dependence.
Dependence includes both unilateral dependency and mutual interdependence, which may be evidenced by a nexus of factors, such as common ownership of property, common householding, shared budgeting, or length of relationship. The registration of a domestic partnership, such as is authorized in New York City, New York City Ad. Code §3-240 et seq. (1999) would constitute strong evidence of mutual interdependence.
This Department has previously determined that an AD&D policy issued in New York pursuant to New York Insurance Law § 4235(c)(1)(L) could not validly cover a spouse, because coverage is restricted to the cardholder. Since a spouse may not be covered, neither may a domestic partner.
There is, however, no provision in the New York Insurance Law that would prohibit an insurer licensed to transact an insurance business in New York from issuing a group AD&D policy outside of New York that covers New York residents, including domestic partners, if the law of the jurisdiction where the policy is issued permits it.
Please note that the above opinion was modified by an opinion dated January 8, 2004.
For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.