Press Release

For Immediate Release: April 22, 2013

State of New York | Executive Chamber
Andrew M. Cuomo | Governor


Insurer Spent Less Than Required 60 Percent Minimum on Claims

Requirement is Designed to Protect Consumers and Hold Down Premium Costs

NEW YORK, NY -- Governor Andrew M. Cuomo today announced that Zurich American Insurance Company has agreed to refund $4.56 million to policyholders of its New York statutory disability insurance policies because the insurer failed to spend at least 60 percent of total premiums on claims – as required under law.

“Ensuring that insurers dedicate the required amount of money to paying policyholder benefits – rather than overhead or windfall profits – is critical to protecting consumers and keeping premium costs down," Governor Cuomo said. "Today's action continues the state's work to hold insurers accountable to ratepayers and ensure that New York residents and businesses are not being overcharged."

The money is being refunded to approximately 73,000 policyholders through an agreement with the New York State Department of Financial Services (DFS). In this case, most of the policyholders are small businesses, which will benefit from the lower costs.

Zurich failed to meet the 60 percent minimum, called a minimum loss ratio (MLR), because it overestimated the amount of money it would spend to pay claims when the policies were priced by the insurer.

The refunds involve policies issued in calendar years 2009, 2010 and 2011.

Benjamin M. Lawsky, Superintendent of Financial Services, said: “We’ll continue to fight hard to make sure that insurers live up to their commitments. These refunds will put money back in the pockets of policyholders – many of which are New York small businesses.”

The insurer reported the lower than required MLR to the Department of Financial Services and has submitted a corrective action plan detailing how the refunds will be made.

New York State statutory disability benefits insurance provides temporary cash benefits paid to an eligible employee to replace, in part, wages lost when the employee is disabled by an off-the-job illness or injury, and for disabilities arising from pregnancy.

Employers who hire employees in New York State are required to provide statutory disability benefits insurance unless they are exempt under New York State law. The coverage is part of workers’ compensation insurance.


Additional news available at
New York State | Executive Chamber | [email protected] | 518.474.8418