The Office of General Counsel issued the following opinion on September 16, 2005, representing the position of the New York State Insurance Department.
Re: Form and Rate Filing Requirements for Group Policy Issued outside New York.
If a New York authorized insurer plans to issue certificates in New York under a group master policy, which the insurer will issue outside of New York, are the group master policy and certificates subject to the rate and form filing requirements of Article 23 of the New York Insurance Law1 and N.Y. Comp. Codes R. & Regs. tit. 11, § 153.6 (1995) (Regulation 135)?
Yes. Regardless of where the group master policy will be issued, the group master policy and certificates are subject to the rate and form filing requirements of Article 23 of the New York Insurance Law and Regulation 135 because the insurer will issue certificates under the group master policy to cover risks located or resident in New York.
A New York authorized insurance company plans to issue a group master policy ("Policy") to a religious diocese of churches with certificates issued to individual churches within the diocese. The Policy will provide liability coverage. The diocese and all churches are non-profit religious institutions under Section 501(c)(3) of the Internal Revenue Code. Several of the individual churches are located in New York, but the diocese is headquartered outside of New York. The diocese issues guidelines on church operations and controls the services provided by the individual church members. The insurer will issue the Policy to the diocese outside of New York. And the insurer will authorize the diocese to: (1) bill and collect premiums from individual certificate holders, and (2) mail certificates to the dioceses churches in New York and elsewhere.
N.Y. Comp. Codes R. & Regs. tit. 11, Pt. 153 (2001) (Regulation 135) implements N.Y. Ins. Law § 3435 (McKinney 2000) and establishes the standards, requirements and procedures for property/casualty insurance policies issued on a group or quasi-group basis in New York. (Please note that under the presented facts, the insurer may issue a group policy to the diocese of churches because the diocese and its churches qualify as a permissible group of nonprofit organizations pursuant to § 3435, and N.Y. Comp. Codes R. & Regs. tit. 11, § 153.1(k)(1) and § 153.3(c)(4).)
§ 153.1(e) defines a "group master policy" as "a group policy issued to a group master policyholder and under which certificates are issued to group members, but does not include such certificates." § 153.1(g) defines a "group policy," in relevant part, as "a policy underwritten and issued on a collective basis of . . . property/casualty insurance insuring the interests of two or more persons or entities." And § 153.1(1) defines a "certificate" as "any policy, contract or other evidence of insurance, or rider or endorsement thereto, issued to a group member under a property/casualty or liability insurance group master policy."
§ 153.6 provides the form and rate filing requirements for group and quasi-group policies issued in New York. § 153.6(a)-(c) provides:
Every authorized insurer issuing or renewing in this State any group policy or (except for subdivision [e] of this section) any quasi-group policy on risks or operations in this State, in connection with State law or a Federal purchasing group, shall comply with the following requirements:
(a) All such policy forms, rating classifications and territories shall be approved by the superintendent pursuant to section 2307 of the Insurance Law.
(b) All such rates, rating plans or rating rules shall be submitted to the superintendent pursuant to the applicable provisions of article 23 of the Insurance Law.
(c) No group or quasi-group policy shall qualify for exemption from filing under section 6301 of the Insurance Law.
Under the presented facts, while the Policy will be issued outside New York, certificates under the Policy will be issued in New York to cover New York risks. Accordingly, the Policy will be subject to § 153.6s rate and form filing requirements, which include compliance with the rate and form requirements of N.Y. Ins. Law §§ 2301-2351 (McKinney 2000 & Supp. 2005) (Article 23), because the Policy will cover risks located or resident in New York through its certificates. In addition, the Policy's certificates, which cover New York risks, are subject to the rate and form filing requirements of § 153.6 and Article 23 because the Insurance Department treats each certificate that covers New York risks as a separate contract or policy of insurance when applying § 153.6 and Article 23. Therefore, regardless of where the Policy will be issued, the Policy and certificates, which cover New York risks, are subject to the rate and form filing requirements of Regulation 135 because the insurer will issue certificates under the Policy to cover risks located in New York.
For further information you may contact Associate Attorney Kristian Earl Lynch at the New York City Office.
1 N.Y. Ins. Law §§ 2301-2351 (McKinney 2000 & Supp. 2005).