Press Office

IMMEDIATE, Wednesday
March 12, 2003

Insurance Department Follows Through on Governor's Directive Under the "Patriot Plan"

        Governor George E. Pataki today announced that the State Insurance Department has taken steps in accordance with the newly proposed "Patriot Plan" to ensure that New York's military personnel continue to receive their health benefits and are allowed temporary suspension of certain property casualty insurance policies while on duty.

        The Governor made his announcement while visiting the 107th Air Refueling Wing in Niagara Falls. In addition to refueling the military aircraft that patrol the skies over New York City and Washington D.C., members of the 107th have seen action in Afghanistan, and have been mobilized for overseas duty associated with the ongoing war on terror.

        "As the courageous members of the 107th Air Refueling Wing -- and all of our dedicated military personnel -- work to defend our freedoms, they deserve our profound gratitude and steadfast support," Governor Pataki said. "We will continue our efforts to ensure that servicemen and women called to active duty receive the full rights and benefits they and their families are entitled to under New York State law. I am pleased that Superintendent Serio and the Insurance Department have acted so quickly to protect the rights of military personnel called to active duty."

        The "Patriot Plan" was unveiled by the Governor and Assembly Republicans last Tuesday. The Plan includes a comprehensive package of bills and administrative measures to assist troops and their families who face potential added expenses and disruptions caused by being called to active duty in the nation's ongoing war against terrorism and possible military action in Iraq. The Insurance Department's actions are part of the administrative actions called for in the Patriot Plan.

        State Insurance Department Superintendent Gregory V. Serio said, "Governor Pataki has directed the Insurance Department to protect the rights of military personnel called to active duty. The Department remains steadfast in its commitment to ensure that the insurance industry complies with both the letter of and the spirit of the insurance law."

        In accordance with the Governor's administrative directive under the "Patriot Plan," the Insurance Department has issued Circular Letter #7 advising Health Insurers and Health Maintenance Organizations (HMOs) of their obligations under the New York Insurance Law. Military personnel are afforded additional rights of conversion, continuation and suspension of health insurance coverage.

        Members of the U.S. Military, including Reserves and the National Guard, who hold individual health insurance policies and who enter active duty or have their duty extended, are afforded supplemental rights to suspend their coverage during such period of active duty and have unearned premiums for the period returned. Furthermore, reservists are entitled to resume their coverage upon termination of active duty. With limited exceptions, no limitations or conditions may be imposed upon resumption of coverage.

        Members of the U.S. Military, including Reserves and the National Guard, who are covered under group policies and who enter active duty or have their active duty extended, are also afforded supplemental rights. A reservist called into active duty may elect to continue or suspend group coverage including family coverage. Upon return to work after active duty, reservists who suspended policies are entitled to resume coverage. With limited exceptions, no limitations or conditions may be imposed upon resumption of coverage. Additionally, if a reservist elects continuation of coverage and passes away while on active duty, the surviving spouse and children are entitled to conversion rights.

        The Department has also issued Circular Letter #5 advising all property/casualty insurers that where reasonable the insured has the option to suspend coverage without any penalties. Additionally insurers are to notify their insureds that if they are called to active duty overseas, they may designate an adult third party to receive bills and other notices related to their insurance coverage. Insurers are also directed to give special consideration in nonrenewing policies of military personnel while the named insured is on active duty and not physically present in the State.

        Additionally, the Department issued Circular Letter #6 reminding all insurers authorized to write life insurance and annuities of the notification and policy form requirements for war exclusions.

        The Circular Letter also detailed when war exclusions are terminated under New York Insurance Law. Any war exclusion shall terminate six months after the end of the war in which the insured was engaged or the war which the insured was likely to engage in at the time of application for this policy, after the discharge, release or separation of the insured from active military service, after the demobilization of the insured, or after the insured permanently leaves the war area, whichever occurs first. The end of war shall be determined by an order of the President of the United States or by federal law or shall be deemed to occur on the effective date of an agreement or declaration to end all hostilities which has been adopted or accepted by all armed forces involved therein, or in the absence of such an agreement or declaration at the end of ninety continuous days from the end of all hostilities.

        Circular Letters numbers 5-7 of 2003 are available on the Insurance Department's Web.

        Among the other provisions that are part of the newly proposed "Patriot Plan" are: