NEW YORK STATE
INSURANCE DEPARTMENT

AMENDMENT TO TITLE OF CHAPTER XI
PREPAID LEGAL SERVICES PLANS AND LEGAL SERVICES INSURANCE

AND

FIRST AMENDMENT TO REGULATION NO. 132
(11 NYCRR 260)

EXPERIMENTAL MONOLINE PREPAID LEGAL SERVICE PLANS

        I, NEIL D. LEVIN, Superintendent of Insurance of the State of New York, pursuant to the authority granted by Sections 201, 301, and 1116 of the Insurance Law and Chapter 65 of the Laws of 1998, do hereby amend the title of Chapter XI as follows: Prepaid Legal [Service] Services Plans and Legal Services Insurance; and do hereby promulgate the following First Amendment to Part 260 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation 132) to take effect upon publication in the State Register. Part 260 shall read as follows:

NEW MATERIAL UNDERSCORED, DELETED MATERIAL BRACKETED

EXPERIMENTAL MONOLINE PREPAID LEGAL SERVICE PLANS

Section   260.1 Purpose
              260.2 General standards and financial requirements
              260.3 Plan approval required
              260.4 Special standards
              260.5 Foreign stock insurance corporations
              260.6 Restriction on contract issuance
              260.7 Termination

Section 260.1 Purpose.

        Chapter [170] 65 of the Laws of [1986] 1998 amended Insurance Law section 1116 to (a) continue the experimental project in prepaid legal service plans until [December 31, 1991] April 1, 1999 and (b) permit the superintendent to authorize insurers which meet established standards and financial requirements to write prepaid legal insurance as prescribed by such section, even though no other type of insurance is written. This Part establishes the standards and financial requirements that such insurers must comply with.

Section 260.2 General standards and financial requirements.

        Except as otherwise specifically provided in Insurance Law[,] section 1116[,] and in this Part, a domestic stock corporation seeking authorization to write only prepaid legal insurance shall be organized under Insurance Law[,] section 1201, and shall comply with all of the provisions of the Insurance Law and regulations applicable to a domestic stock corporation seeking authorization to be licensed as an accident and health insurance company and, upon compliance with the provisions of Insurance Law section 1102, and any other lawful prerequisites for the issuance of a license, may be issued a license to write only prepaid legal insurance. During the term of its authorization, a domestic stock corporation licensed to write only prepaid legal insurance shall comply with all of the provisions of the Insurance Law and regulations applicable to a domestic stock accident and health insurance company.

Section 260.3 Plan approval required.

        No domestic or foreign stock corporation organized to write only prepaid legal insurance shall be licensed to do business in this State until its plan to issue contracts in connection with experimental plans to provide benefits for prepaid legal service has been approved by the superintendent or until the superintendent has approved its plans to reinsure contracts providing benefits for prepaid legal services.

Section 260.4 Special standards.

        (a) The declaration and charter of a domestic corporation organized to write only prepaid legal insurance, as required to be filed pursuant to Insurance Law[,] section 1201, shall state the corporation's limited purpose and duration.

        (b) A mutual insurance company shall not be licensed to write only prepaid legal insurance due to the temporary nature of the authorization to write prepaid legal insurance and the amount of time required to organize such a corporation.

        (c) The investments of a domestic corporation authorized to write only prepaid legal insurance shall conform to the requirements imposed upon a domestic stock accident and health insurer, except that no obligation of any private or government institution shall have a maturity date after [December 31, 1996] March 31, 2003.

Section 260.5 Foreign stock insurance corporations.

        Except as otherwise specifically provided in Insurance Law[,] section 1116 and in this Part, a foreign stock insurance corporation organized and licensed to write only prepaid legal insurance shall comply with all of the provisions of the Insurance Law and regulations thereto applicable to a licensed foreign stock accident and health insurer. [If such corporation's plan to issue contracts in this State is approved, as provided in section 260.3 of this Part, then the superintendent may issue a license to such a corporation to write only prepaid legal insurance.] The license issued by the superintendent, or renewal thereof, shall be for a term expiring on June 30 following the date of issuance.

Section 260.6 Restriction on contract issuance.

        No contract providing benefits for prepaid legal services under this Part shall be issued after [December 31, 1991] March 31, 1999 by an insurer organized and licensed to write only prepaid legal insurance, and no such contract shall in any case contain a policy term which extends past March 31, 2003. This Part shall continue to apply to all contracts for prepaid legal service plans under this Part executed prior to April 1, 1999, until the expiration of such contracts or until April 1, 2003, whichever shall occur first.

Section 260.7 Termination.

        Every license to write only prepaid legal insurance under this Part issued to a domestic or foreign stock insurance corporation shall terminate no later than [December 31, 1996] March 31, 2003.

 

        I, Neil D. Levin, Superintendent of Insurance of the State of New York, do hereby certify that the foregoing is the first amendment to 11 NYCRR 260 (Regulation 132), promulgated by me on March 1, 2000, pursuant to the authority granted by Sections 201, 301, and 1116 of the Insurance Law and Chapter 65 of the Laws of 1998, to take effect upon publication in the State Register.

        Pursuant to the provisions of the State Administrative Procedure Act, prior notice of the proposed amendment was published in the State Register on December 1, 1999. No other publication or prior notice is required by statute.
 

__________________________
Neil D. Levin
Superintendent of Insurance
  
 

By:_________________________
GREGORY V. SERIO
FIRST DEPUTY SUPERINTENDENT

Dated: March 1, 2000