Insurance Circular Letter No. 7 (2022)

April 22, 2022

STATUTORY REFERENCES: Insurance Law Article 23 and § 2607; Vehicle and Traffic Law §§ 490(2) and 502(1); Public Health Law §§ 4132 and 4138(1); Civil Rights Law Article 6-A; Chapter 158 of the Laws of 2021; and Chapter 163 of the Laws of 2022

The Gender Recognition Act (“Act”) was signed into law on June 24, 2021 as Chapter 158 of the Laws of 2021. The Act, in relevant part, amended Vehicle and Traffic Law (“VTL”) §§ 490(2) and 502(1) to allow New York residents to select a nonbinary gender (“Gender X”) on a New York State driver’s license or identification card as certified by the resident and without requiring additional documentation. The amendments to the VTL also allow the resident to amend the sex designation on the resident’s driver’s license or identification card upon request. The Act amended Public Health Law §§ 4132 and 4138(1) to codify the right of New York residents to select Gender X or amend the sex designation on a birth certificate through the New York State Department of Health as attested by the resident and without requiring additional documentation. The Act amended Civil Rights Law by adding Article 6-A, which directs courts to issue orders granting petitions for change of sex designation upon receipt of the petitioner’s gender identity affidavit and without requiring additional medical evidence. On March 18, 2022, Governor Hochul signed into law Chapter 163 of the Laws of 2022, which in relevant part delayed the effective date of the provisions of the Act amending the VTL until June 24, 2022.

The purpose of this circular letter is to advise all property/casualty insurers authorized to write motor vehicle insurance in New York State and the New York Automobile Insurance Plan (collectively, “insurers”), to the extent that they have rating plans that take into consideration an insured’s gender, that they should ensure that their insurance applications, underwriting practices, and rating plans are updated to accommodate nonbinary applicants and insureds who present adequate documentation. Adequate documentation is any form of identification recognized by the Act, including a driver’s license, identification card, birth certificate, or court order recognizing an individual’s gender identity. Insurers should not impose any requirements on applicants or insureds to identify as Gender X beyond the identity reflected on their driver’s licenses, identification cards, birth certificates, or in court orders.

Insurers should make a submission to the New York State Department of Financial Services (“DFS”) to amend their rating plans to add rating factors for Gender X. Such submissions must comply with Insurance Law Article 23, including ensuring that rating factors for Gender X not cause rates to be excessive, inadequate, or unfairly discriminatory. Potential approaches for rating Gender X include, but are not limited to, using a weighted average of the male and female rating factors and removing the effect of the gender rating factor for individuals who select Gender X. Insurers should universally apply one rating factor to all nonbinary insureds and should not file rating plans that reflect bias against nonbinary insureds, such as using the higher of the male and female rating factors to rate Gender X. Insurers’ underwriting practices and applications for insurance should likewise be updated to accommodate nonbinary applicants or insureds.

Insurers that have not already submitted amended rating plans should do so as soon as possible but no later than May 27, 2022. Insurers should also review the gender language in their policy forms and, if necessary, file amended forms by May 27, 2022, and implement them promptly upon approval. To accommodate nonbinary applicants/insureds, an insurer should change its rate for nonbinary individuals from the date the applicant/insured presents adequate documentation of the person’s gender identity. A nonbinary applicant/insured may present adequate documentation of the person’s gender identity to the insurer before the insurer’s amended rate filing has been approved by DFS or before the insurer’s system has been updated to reflect the modified rate for nonbinary individuals. In that event, the insurer should retroactively adjust premiums back to the date the applicant/insured presented adequate documentation for applicants/insureds who were overcharged as a result of the insurer’s failure to accommodate them.

The failure of any insurer to accommodate nonbinary applicants and insureds who present adequate documentation may constitute a violation of the Insurance Law or Financial Services Law. As a reminder, Insurance Law § 2607 also prohibits insurers from refusing to issue an insurance policy, or canceling or declining to renew the policy, because of the sex of the applicant or policyholder. “Sex” is defined in the statute to include sexual orientation, gender identity or expression, and transgender status.

Please direct any questions regarding this circular letter to [email protected].

Sincerely,

Stephen Doody
Deputy Superintendent, Property Bureau