NY Insurance Law

Inciting Smiles

I don’t know about you, but I find that after I have been looking at the same insurance policy forms for the past several hours, it takes very little to amuse me.

The other day I was humming along, reviewing application forms for individual corporate-owned life insurance, when I saw in the COLI checklist a reference to § 4216, which is one of the most important sections of the NY Insurance Law for the review of group life insurance policies, but one I do not have printed at my desk.

So, acting almost on auto-pilot, I dutifully logged in to Westlaw, entered my search terms of 4216 and New York, hit enter, waited for the results (which always, irritatingly, defaults to case law), clicked on Statutes, waited again, then automatically moved my mouse toward the first hit: Section 4216.

But then, I really smiled. Not quite an LOL, but close.

This statute that came up first on the list was from the Public Health Law, not the Insurance Law.

It read: § 4216 -- Body Stealing.

Of course I had to read the statute, which, fortunately, was only one paragraph. It turns out that removing any part of a dead body without having the authority to do so, from graveyards or vaults or really anywhere, for the purpose of selling it, or dissecting it, or because you’re feeling malicious or wanton, is a class D felony in New York.

As I said, some days it doesn’t take much.

If you’re wondering, the correct cite is §4216 -- Group life insurance; premium requirements; notice of conversion; filing of compensation. It’s 14 pages long. No body parts or felonies are mentioned. I noted that the employee has to be notified if the employer will be the beneficiary of the policy he’s applying for. But now I also know that even if the employee dies, and even if the employer gets the death benefit, the employer is still under no circumstances allowed to steal his body parts.

New York Has New Law on “Senior” Designations

On November 21, 2014, New York’s Governor Cuomo signed into law Assembly Bill 1787, which amends the general business law to provide for mandatory disclosure in advertising using senior specific designations. This is not limited to insurance transactions, but will have an impact on insurance producers who market themselves or their businesses as having credentials related to seniors.

When Alan Prochoroff, Editor and Publisher of Insurance Compliance Insight notified me of this legislation, I was intrigued because it takes a different approach than many of the senior-specific insurance designation regulations, including NY’s. Unlike many insurance-specific rules on senior designations, this law does not prohibit certain combinations of words or mandate certain educational standards for designations. It should be noted that disclosure under the new law appears to be in addition to Regulation 199 that prohibits certain designations.

This new law requires clear and prominent disclosure in advertising of the designation source, whatever it may be – or not be. The law specifically contemplates (and allows) designations that are self-created, but requires advertising disclose that the designation is created by the business or individual doing the soliciting. It appears that this means even if an insurance producer is using an insurance-permitted designation, s/he still must disclose the source of the designation. It appears a producer in NY needs to check that Regulation 199 permits the designation and then make sure that all advertising complies with this new law.

One thing that I like about this approach is the broad definition of “designation.” It specifically includes “professional description that indicates the person has expertise or training specifically related to seniors in their field.” Since the proliferation of rules regarding insurance-specific senior designations, including Reg. 199, we have seen a move to using the word combinations in URLs, business names, and tag lines. The argument of those using the same combinations of words in different places is that they are not designations. While we have strongly argued against use of the words in business names, tag lines, and URLs, this law helps support that recommendation because it includes professional descriptions in the definition of a designation.

As for penalties, the new law provides for generally available civil penalties, but it also provides that the attorney general can issue injunctions without the need to prove that any individuals have, in fact, been injured.

Businesses in NY who have names, taglines, or other descriptions that suggest an expertise in seniors or insurance products specifically relevant to seniors should pay just as much attention to this new law as those who are using senior-specific designations. Producers who are honest about their expertise don’t appear to have anything to worry about.