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However, a group commercial liability policy may be issued if it complies with the requirements of N. The Department received a complaint from an insurance agent of a life insurance company. The agent had been told by the life insurer that he was required to purchase liability insurance from XYZ Casualty Insurance Co.
The policy did not insure the securities affiliate itself and a separate policy was issued to it. However, the policy provided coverage to an insurance agent regardless of whether the agent was acting on behalf of the life insurer. During discussions, the life insurance company advised us that prior to the policy period August 1, through August 1, , the master policy had been issued to the life insurance company outside of New York but that the policy had been issued to it in New York in error.
In addition, prior to the year, coverage under the policy was optional and the life insurance company had not required its agents to purchase the coverage.
Based upon our review of the facts, we advised the inquirer that XYZ had issued an illegal group insurance policy in New York and that the only way the coverage could be offered on a group basis was on a purchasing group basis.
However, even if the policy was restructured and a purchasing group was formed, the policy may not contain a group aggregate nor may the group policyholder the life insurance company or the securities affiliate require that the members of the group the agents and representatives purchase the insurance.
In a July 11, letter, and in subsequent discussions, XYZ advised us that the renewal policy would be issued on a purchasing group basis. Further, XYZ stated that the policy will not have a group aggregate limit.
Both the life insurance company and the securities affiliate have agreed that they will not mandate that the agents or representatives be covered under the policy. Although XYZ has agreed to revise the policy in accordance with our conversations, it requested that we provide it with a written response regarding the legal issues involved.
In particular, XYZ wished us to address why the Department has concluded that the policy could not be written under N. This opinion is limited to addressing the questions posed by XYZ and by the agent; specifically, whether the policy may be issued on a group excess or other group basis; whether the group policyholder or the insurer may require the agents and representatives to be covered under the policy; and whether there may be a group aggregate.
Under the LRRA and Article 59, a purchasing group may obtain only liability insurance for business-related liability on a group basis 1. However, the policy could not have been issued on a group basis.
Nor could the purchasing group provisions be relied upon because a purchasing group had not been formed and registered with the Department for this group in accordance with the requirements of the LRRA and Article Since the enactment of Regulation No.
Two of those provisions clearly have no applicability here: It is in regard to the remaining group provision, N. Section authorizes "employer sponsored group personal excess insurance. This type of insurance is typically offered by employers and partnerships as an incentive for employees and partners to participate in community activities such as serving on volunteer not-for-profit boards, engaging in youth activities and fulfilling various other civic duties.
Enactment of this legislation would also help New York employers to remain competitive relative to businesses that offer this coverage as a benefit, and encourage valued employees to participate in community activities. The coverage is not excess but primary coverage. Nor does the policy meet the express purpose behind the bill, that is, to provide an incentive for employees and partners to participate in community affairs since the policy provides errors and omissions insurance.
We advised XYZ that, if a purchasing group were utilized in accordance with the LRRA and Article 59, at least two aspects of the prior policy would have to be modified. As indicated by this provision, the previous policy would not be acceptable in that it was a group policy that is subject to an aggregate liability limit. XYZ states that the policy has eliminated the group aggregate in regard to the New York members. In addition to Regulation No. This response is limited to the specific issues raised by the agent and that XYZ requested that we address.
Since the policy has not been filed yet, we will not address any other issues that may arise in connection with that filing. For further information you may contact Principal Attorney Paul A. Zuckerman at the New York City Office. B any activity of any state or local government, or any agency or political subdivision thereof; and.
Your browser does not support iFrames. No insurer shall provide coverage in regard to a group or quasi-group program that: