Section 3101. Simplified comprehensive policies of insurance. 3102. Requirements for the use of readable and understandable insurance policies. 3103. Non-conforming contracts. 3104. Contract provisions required by laws of other jurisdictions. 3105. Representations by the insured. 3106. Warranty defined; effect of breach. 3107. Sale of insurance policies by vending machine. 3108. Reinsurance contracts excepted. 3109. False statements in applications for membership in fraternal benefit societies. 3110. Withdrawal of approval of any policy form. 3111. Special provisions relating to senior citizens. 3112. Automatic bank withdrawal agreements; notification required. 3113. Consent of and notification of an irrevocable beneficiary under a court order of divorce or separation. S 3101. Simplified comprehensive policies of insurance. Simplified policies of insurance providing broad coverage of all or various combinations of risks may be approved by the superintendent and issued by insurers notwithstanding any provision of this chapter, and notwithstanding those provisions of any other law which specify the content of insurance policies, provided that such policies shall be subject to regulations promulgated by the superintendent specifying the standards which must be met by insurers for issuing such policies and assuring to policyholders and claimants protections not less favorable than they would be entitled to under a substantially similar policy which is not subject to this section. S 3102. Requirements for the use of readable and understandable insurance policies. (a) Definitions. In this section "insurance policy" means any: (1) form subject to approval under either section three thousand two hundred one or four thousand three hundred eight of this chapter; (2) comprehensive health services plan as defined in section four thousand four hundred one of the public health law; (3) contract of insurance for owners of dwellings consisting of not more than four dwelling units, and for household furnishings and personal property contained in any household unit, written for a divisible or indivisible premium which provides coverage for the peril of fire and extended coverage with or without any other kind of insurance as provided pursuant to subsection (a) of section one thousand one hundred thirteen of this chapter; (4) contract of insurance insuring against losses or liabilities arising out of the ownership, operation, or use of a motor vehicle predominantly used for non-business purposes, when a natural person is the named insured. (b) Exclusions. (1) This section shall not apply to: (A) any insurance policy which has been determined to be a security subject to federal jurisdiction; (B) certificates issued pursuant to a group life or accident and health insurance policy or group annuity contract issued to an employer covering persons employed in more than one state; (C) any group insurance policy covering a group of one hundred or more lives, other than dependents, at date of issue, and a group credit life insurance policy or a group credit accident and health insurance policy; provided, however, this shall not exempt any certificate issued pursuant to a group insurance policy delivered or issued for delivery in this state; (D) any group annuity contract which serves as a funding vehicle for pension, profit sharing or deferred compensation plans; provided, however, this shall not exempt any certificate issued pursuant to such group annuity contract; (E) any insurance policy of life and accident and health insurance used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for, an insurance policy approved prior to October first, nineteen hundred eighty-two; (F) the renewal of an insurance policy of life and accident and health insurance made, issued or delivered on a form provided prior to October first, nineteen hundred eighty-two; (G) any insurance policy issued pursuant to article sixty-three of this chapter; (H) any funding agreement issued pursuant to section three thousand two hundred twenty-two of this chapter; or (I) any service contract issued pursuant to article seventy-nine of this chapter. (2) No other statute of this state or provision of this chapter establishing language simplification standards shall apply to any insurance policy. (3) Any non-English language insurance policy made, issued or delivered in this state on a risk located or resident in this state shall be deemed to be in compliance with subparagraph (D) of paragraph one of subsection (c) of this section if the insurer certifies that such insurance policy is translated from an English language insurance policy which does comply with such subparagraph. (c) Readability requirements. (1) In addition to any other requirements of law, no insurance policy, except as set forth in subsection (b) of this section, shall be made, issued or delivered in this state on a risk located or resident in this state, unless: (A) it is written in a clear and coherent manner; (B) wherever practicable, it uses words with common and everyday meanings to facilitate readability and to aid the insured or policyholder in understanding the coverage provided; (C) it has been filed with and approved by the superintendent; (D) the text achieves a minimum score of forty-five on the Flesch reading ease test or an equivalent score on any other comparable test as provided in paragraph three of this subsection; (E) it is printed, except for specification pages, schedules and tables, in not less than ten point type, and except for applications, specification pages, schedules and tables, such type is at least one point leaded; (F) it is appropriately divided and captioned and presented in meaningful sequence; each section to contain an underlined, boldface or otherwise conspicuous title or caption at the beginning that indicates the nature of the subject matter included in or covered by the section; (G) it contains a table of contents or an index of the principal sections of the insurance policy if the insurance policy has more than three thousand words or if the insurance policy has more than three pages regardless of the number of words; (H) it has margins that are adequate for the purposes of readability; and (I) it is printed in such manner that it includes sufficient contrast of ink and paper to be legible. (2) For the purposes of this subsection, a Flesch reading ease test score shall be measured by the following method: (A) For an insurance policy containing ten thousand words or less of text, the entire form shall be analyzed. For an insurance policy containing more than ten thousand words, the readability of two hundred word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least twenty printed lines. (B) The number of words and sentences in the text shall be counted and the total number of words divided by the total number of sentences. The figure obtained shall be multipled by a factor of 1.015. (C) The total number of syllables shall be counted and divided by the total number of words. The figure obtained shall be multiplied by a factor of 84.6. (D) The sum of the figures computed under subparagraphs (B) and (C) hereof subtracted from 206.835 equals the Flesch reading ease score for the insurance policy. (E) For purposes of subparagraphs (B), (C) and (D) hereof, the following procedures shall be used: (i) a contraction, hyphenated word, or numbers and letters, when separated by spaces, shall be counted as one word; (ii) a unit of words ending with a period, semicolon, or colon, but excluding headings and captions, shall be counted as a sentence; and (iii) a syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. Where the dictionary shows two or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used. (F) In this subsection "text" includes all printed matter except the following: (i) the name and address of the insurer; the name, number or title of the policy; the table of contents or index; captions and subcaptions; specification pages, schedules or tables; and (ii) any language which is drafted to conform to the requirements of any state or federal law, regulation or agency interpretation; any language required by any collectively bargained agreement; any medical terminology; and words which are defined in the insurance policy; and any language required by law or regulation; provided, however, the insurer identifies the language or terminology excepted by this subparagraph and certifies in writing that the language or terminology is entitled to be excepted by this subparagraph. (3) Any other reading test may be designated by the superintendent for use as an alternative to the Flesch reading ease test. (4) Filings subject to this subsection shall be certified by an officer of the insurer that they meet the minimum reading ease score on the test used or state that the score is lower than the minimum required but should be approved in accordance with subsection (d) of this section. To confirm the accuracy of any certification, the superintendent may require the submission of further information to verify the certification in question. (5) At the option of the insurer, riders, endorsements, applications and other forms may be scored as separate forms or as part of the insurance policy with which they may be used. (d) Lower score permitted. The superintendent may authorize a lower score than the Flesch reading ease score required in subparagraph (D) of paragraph one of subsection (c) of this section whenever, in the superintendent`s sole discretion, he finds that a lower score: (1) nevertheless reflects a readable and an understandable insurance policy which is consistent with the purposes of this section; (2) is warranted by the nature of a particular insurance policy or type or class of insurance policies; or (3) is caused by certain language which is drafted to conform to the requirements of any state law, regulation, agency or departmental interpretation. (e) Other laws. (1) Any insurance policy meeting the requirements of subparagraphs (D) through (I) of paragraph one of subsection (c) of this section may be approved notwithstanding the provisions of any other laws which specify the content of insurance policies, if in the opinion of the superintendent the insurance policy provides the policyholders and claimants protection not less favorable than they would be entitled to under such laws. (2) This section shall not prohibit the use of words or phrases or contractual provisions required by state or federal law, rule or regulation or by a governmental instrumentality or by any collectively bargained agreement. (f) Prohibition of non-conforming policies. Except as provided in subsection (b) of this section: (1) no insurance policy described in paragraph one or two of subsection (a) of this section shall be made, issued or delivered in this state on a risk located or resident in this state, unless the policy complies with the requirements of this section; (2) no insurance policy described in paragraph three or four of subsection (a) of this section and no renewal or extension certificate in connection therewith shall be made, issued or delivered in this state unless the insurance policy complies with the requirements of this section. S 3103. Non-conforming contracts. (a) Except as otherwise specifically provided in this chapter, any policy of insurance or contract of annuity delivered or issued for delivery in this state in violation of any of the provisions of this chapter shall be valid and binding upon the insurer issuing the same, but in all respects in which its provisions are in violation of the requirements or prohibitions of this chapter it shall be enforceable as if it conformed with such requirements or prohibitions. (b) No policy of insurance or contract of annuity delivered or issued for delivery in this state shall provide that the rights or obligations of the insured or of any person rightfully claiming thereunder, with respect to: (1) a policy of life, accident and health insurance or contract of annuity upon a person resident in this state, (2) a policy of insurance upon property then in this state, or (3) the liabilities to be incurred by the insured as a result of activity then carried on by the insured in this state, shall be governed by the laws of any jurisdiction other than this state. This subsection shall not apply to policies of marine insurance. (c) In any action to recover under the provisions of any policy of insurance or contract of annuity delivered or issued for delivery in this state which the superintendent is authorized by this chapter to approve if in his opinion its provisions are more favorable to policyholders, the court shall enforce such policy or contract as if its provisions were the same as those specified in this chapter unless the court finds that its actual provisions were more favorable to policyholders at the date when the policy or contract was issued. S 3104. Contract provisions required by laws of other jurisdictions. (a) Any foreign or alien insurer authorized to do business in this state may, with the approval of the superintendent, include in any life, accident and health insurance policy or contract of annuity delivered or issued for delivery in this state any provisions required by the laws of the jurisdiction in which such insurer is domiciled if such provisions are not substantially in conflict with the laws of this state. (b) Any domestic insurer may include in any policy of insurance or contract of annuity issued for delivery in another jurisdiction and governed by the laws thereof, any provision required by the laws of such other jurisdiction applicable to such policy or contract. S 3105. Representations by the insured. (a) A representation is a statement as to past or present fact, made to the insurer by, or by the authority of, the applicant for insurance or the prospective insured, at or before the making of the insurance contract as an inducement to the making thereof. A misrepresentation is a false representation, and the facts misrepresented are those facts which make the representation false.
(b) No misrepresentation shall avoid any contract of insurance or defeat recovery thereunder unless such misrepresentation was material. No misrepresentation shall be deemed material unless knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such contract. (c) In determining the question of materiality, evidence of the practice of the insurer which made such contract with respect to the acceptance or rejection of similar risks shall be admissible. (d) A misrepresentation that an applicant for life or accident and health insurance has not had previous medical treatment, consultation or observation, or has not had previous treatment or care in a hospital or other like institution, shall be deemed, for the purpose of determining its materiality, a misrepresentation that the applicant has not had the disease, ailment or other medical impairment for which such treatment or care was given or which was discovered by any licensed medical practitioner as a result of such consultation or observation. If in any action to rescind any such contract or to recover thereon, any such misrepresentation is proved by the insurer, and the insured or any other person having or claiming a right under such contract shall prevent full disclosure and proof of the nature of such medical impairment, such misrepresentation shall be presumed to have been material. S 3106. Warranty defined; effect of breach. (a) In this section "warranty" means any provision of an insurance contract which has the effect of requiring, as a condition precedent of the taking effect of such contract or as a condition precedent of the insurer`s liability thereunder, the existence of a fact which tends to diminish, or the non-existence of a fact which tends to increase, the risk of the occurrence of any loss, damage, or injury within the coverage of the contract. The term "occurrence of loss, damage, or injury" includes the occurrence of death, disability, injury, or any other contingency insured against, and the term "risk" includes both physical and moral hazards. (b) A breach of warranty shall not avoid an insurance contract or defeat recovery thereunder unless such breach materially increases the risk of loss, damage or injury within the coverage of the contract. If the insurance contract specified two or more distinct kinds of loss, damage or injury which are within its coverage, a breach of warranty shall not avoid such contract or defeat recovery thereunder with respect to any kind or kinds of loss, damage or injury other than the kind or kinds to which such warranty relates and the risk of which is materially increased by the breach of such warranty. (c) This section shall not affect the express or implied warranties under a contract of marine insurance in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on, over or under any seas or inland waters, nor shall it affect any provision in an insurance contract requiring notice, proof or other conduct of the insured after the occurrence of loss, damage or injury. S 3107. Sale of insurance policies by vending machine. (a) Any provision in a policy of accident insurance, requiring the signature of the insured, where such insurance is sold by a vending machine, shall be inoperative and of no effect, unless a notice shall have been placed upon such vending machine, containing letters each at least one-half inch high, advising that the signature of the insured must be placed upon such policy or contract, at time of purchase, to make such policy or contract valid. (b) No insurance shall be offered for sale, issued or sold by or from any vending machine or appliance or any other medium, device or object designed or used for vending purposes, herein called a device, except as provided in this section. (c) A licensed agent may solicit applications for and issue policies of accident insurance or baggage insurance on personal effects by means of mechanical vending machines or other coin operated devices supervised by him and placed at airports, railroad stations or bus stations or other places to meet the convenience of the public, subject to the provisions of this section. (d) Each policy to be sold by or from a device shall be reasonably suited for sale and issuance through such a device, and the location of such device shall be one that is of material convenience to the public. (e) No policy of insurance, issued through any such device shall be for a period of time longer than ten days, or for the duration of a one-way or round trip, as applicable. S 3108. Reinsurance contracts excepted. The provisions of this article shall not apply to contracts of reinsurance, except as otherwise provided by law. S 3109. False statements in applications for membership in fraternal benefit societies. No applicant, officer, solicitor, examining physician, surgeon or other person shall knowingly or wilfully make any false or fraudulent statements or representations in or with reference to any application for membership or reinstatement or any other documentary or other proof for the purpose of obtaining or reinstating membership in or benefit from any fraternal benefit society, order or association, any corporation, association or society transacting the business of life or casualty insurance or both, upon the co-operative or assessment plan, or a corporation for the insurance of domestic animals. S 3110. Withdrawal of approval of any policy form. Whenever by the provisions of this chapter the superintendent is authorized to give his approval of any form of insurance policy or contract, he may, after notice and hearing given to the insurer which submitted such form for approval, withdraw an approval previously given, if the use of such form is contrary to the requirements applicable to such form at the time of such withdrawal. Any such withdrawal shall be effective at the expiration of such period, not less than ninety days after the giving of notice of withdrawal, as the superintendent shall in such notice prescribe. S 3111. Special provisions relating to senior citizens. (a) Every insurer that has in force any policy of insurance subject to the provisions of section three thousand four hundred twenty-five of this chapter shall permit senior citizen insureds to designate a third party to whom the insurer shall transmit notices of cancellation, nonrenewal and conditional renewal. The senior citizen insured shall notify the insurer that a third party has been so designated. Such notification shall be delivered to the insurer by certified mail, return receipt requested, and shall be effective not later than ten business days from the date of receipt by the insurer. The notification must contain, in writing, an acceptance by the third party designee to receive notices of cancellation, nonrenewal and conditional renewal from the insurer. Should the third party designee desire to terminate his or her status as a third party designee, such designee shall provide written notice to both the insurer and the senior citizen insured. Should the senior citizen insured desire to terminate the third party designation, the insured shall provide written notice to the insurer. The transmission to the third party designee of any notice of cancellation, nonrenewal or conditional renewal shall be in addition to a copy of such document transmitted to the senior citizen insured and when a third party is so designated all such notices shall be mailed in an envelope clearly marked on its face with the following: "IMPORTANT INSURANCE POLICY INFORMATION: OPEN IMMEDIATELY". Designation as a third party shall not constitute acceptance of any liability on the third party for services provided to such senior citizen. The insurer shall notify its senior citizen insureds annually in writing of the availability of the third party designee notice procedure and provide information on how the insured can commence this procedure, however, such notice need not be provided once a senior citizen has made a designation. (b) Every insurer that has in force a premium paying individual life insurance policy on the life of a senior citizen insured, who has made a designation in accordance with paragraph one of subsection (b) of section three thousand two hundred eleven of this chapter, shall upon appropriate notification as described herein, provide such senior citizen with a copy of the notice of cancellation for nonpayment of premiums before the lapse date of the policy. The senior citizen insured shall notify the insurer that in addition to the person designated in accordance with paragraph one of subsection (b) of section three thousand two hundred eleven of this chapter, a copy of such notices of cancellation shall be transmitted to the senior citizen insured and when a third party is so designated all such notices shall be mailed in an envelope clearly marked on its face with the following: "IMPORTANT INSURANCE POLICY INFORMATION: OPEN IMMEDIATELY". Such notification to the insurer shall be in writing delivered to the insurer by certified mail, return receipt requested and shall be effective not later than ten business days from the date of receipt by the insurer. Should the senior citizen insured desire to terminate receipt of such notices of cancellation, such senior citizen shall provide written notice to the insurer. The insurer shall at the time the senior citizen insured makes a designation in accordance with paragraph one of subsection (b) of section three thousand two hundred eleven of this chapter inform the senior citizen in writing about the notice procedure and provide information on how the insured can commence this procedure. (c) Every insurer that has in force a medicare supplemental insurance policy as defined in section three thousand two hundred eighteen of this chapter the premiums for which are paid directly to the insurer by the senior citizen insured shall permit senior citizen insureds to designate a third party to whom the insurer shall transmit notices of nonpayment of premiums due or notice of cancellation for nonpayment of premiums, as determined by the insurer. The senior citizen shall notify the insurer that a third party has been so designated. Such notification shall be delivered to the insurer by certified mail, return receipt requested, and shall be effective not later than ten business days from the date of receipt by the insurer. The notification must contain, in writing, an acceptance by the third party designee to receive such notices of cancellation. Should the third party designee desire to terminate his or her status as a third party designee, such designee shall provide written notice to both the insurer and the senior citizen insured. Should the senior citizen insured desire to terminate the third party designation, the insured shall provide written notice to the insurer. The transmission to the third party designee of any such notice of cancellation shall be in addition to a copy of such document transmitted to the senior citizen insured and when a third party is so designated all such notices shall be mailed in an envelope clearly marked on its face with the following: "IMPORTANT INSURANCE POLICY INFORMATION: OPEN IMMEDIATELY". Designation as a third party shall not constitute acceptance of any liability on the third party for services provided to such senior citizen. The insurer shall notify its senior citizen insureds annually in writing of the availability of the third party designee notice procedure and provide information on how the insured can commence this procedure; however, such notice need not be provided once a senior citizen has made a designation. (d) In the case of a medicare supplemental insurance policy as defined in section three thousand two hundred eighteen of this chapter offered by or through a group the premiums for which are paid to the insurer by the group policyholder or group remitting agent, the group policyholder or group remitting agent shall permit senior citizen insureds to designate a third party to whom the group policyholder or group remitting agent shall transmit notices of nonpayment of premiums due or notice of cancellation for nonpayment of premiums, as determined by the group policyholder or group remitting agent. The senior citizen shall notify the group policyholder or group remitting agent that a third party has been so designated. Such notification shall be delivered to the group policyholder or group remitting agent by mail, and shall be effective not later than ten business days from the date of receipt by the group policyholder or group remitting agent. The notification must contain, in writing, an acceptance by the third party designee to receive such notices of cancellation. Should the third party designee desire to terminate his or her status as a third party designee, such designee shall provide written notice to both the group policyholder or group remitting agent and the senior citizen insured. Should the senior citizen insured desire to terminate the third party designation, the insured shall provide written notice to the group policyholder or group remitting agent. The transmission to the third party designee of any such notice of cancellation shall be in addition to a copy of such document transmitted to the senior citizen insured and when a third party is so designated all such notices shall be mailed in an envelope clearly marked on its face with the following: "IMPORTANT INSURANCE POLICY INFORMATION: OPEN IMMEDIATELY". Designation as a third party shall not constitute acceptance of any liability on the third party for services provided to such senior citizen. The group policyholder or group remitting agent shall notify its senior citizen insureds annually in writing of the availability of the third party designee notice procedure and provide information on how the insured can commence this procedure; however, such notice need not be provided once a senior citizen has made a designation. (e) For purposes of this section, "senior citizen insured" shall mean a New York resident who is the policyowner or the insured and is age sixty-five or older. The superintendent may promulgate regulations necessary to carry out the purposes of this section. S 3112. Automatic bank withdrawal agreements; notification required. Any insurer licensed to issue insurance in the state who has an automatic bank withdrawal agreement with an insured for the payment of insurance premiums for any type of insurance shall give the insured at least fifteen days advance written notice of any increase in policy premiums prior to any automatic bank withdrawal of an increased premium. S 3113. Consent of and notification of an irrevocable beneficiary under a court order of divorce or separation. In any case where a policy owner has, pursuant to an order of separation or divorce, designated his or her spouse or children as the irrevocable beneficiary of a policy of insurance subject to the provisions of section three thousand two hundred three of this chapter, and a copy of such order has been served, by registered mail, on the home office of the insurer specifying the name and mailing address of the spouse or children, such insurer shall: (a) prohibit the policy holder from borrowing from the cash value or changing the named beneficiary of such insurance policy without the written consent of the irrevocable beneficiary; and (b) provide written notification to the irrevocable beneficiary in the event that such insurance policy is scheduled to lapse due to non-payment of premium.