§ 3453 — Group policy for service providers listed in a commercial directory

* § 3453. Group policy for service providers listed in a commercial\ndirectory. (a) For purposes of this section, the following definitions\nshall apply:\n (1) "Commercial directory" means any listing of businesses in print or\nelectronic form that is issued by an entity that publishes both white\nand yellow page directories.\n (2) "Group member" means a service provider that is insured under the\ngroup policy.\n (3) "Group policyholder" means an entity that publishes commercial\ndirectories.\n (4) "Service provider" means any individual or business entity who is\nlisted in a commercial directory; purchases advertising services from a\npublisher of a commercial directory; and provides certain types of\nservices as specified by the publisher of the commercial directory.\n (b) A group policy may be issued or issued for delivery in this state\nto a group policyholder only in accordance with the provisions of this\nsection.\n (c) Coverage under a group policy shall extend only to service\nproviders, and shall be associated with the performance of contracts\nentered into by service providers.\n (d) A group policy may provide coverage for the kind of insurance\nauthorized by paragraph sixteen of subsection (a) of section one\nthousand one hundred thirteen of this chapter, and the amount of\ncoverage shall not exceed five thousand dollars for each contract\nguaranteed by the coverage.\n (e) The premium for the group policy, including certificates, may be\npaid by the group policyholder from the funds contributed:\n (1) wholly by the group policyholder;\n (2) wholly by the group members; or\n (3) jointly by the group policyholder and the group members.\n (f)(1) A group policy, including certificates, on which all or part of\nthe premium is to be derived from funds contributed by the group members\nspecifically for their insurance may be placed in force only if the\ngroup policy insures not less than fifty percent of the then eligible\nservice providers, or, if less, one hundred or more of such eligible\nservice providers excluding any as to whom evidence of individual\ninsurability is not satisfactory to the insurer. A group policy,\nincluding certificates, on which no part of the premium is to be derived\nfrom funds contributed by the group members specifically for their\ninsurance must insure all eligible service providers, excluding any as\nto whom evidence of individual insurability is not satisfactory to the\ninsurer.\n (2) The group policy shall insure at least one hundred service\nproviders at date of issue, except that if part of the premium is to be\nderived from funds to be contributed by the group members specifically\nfor their insurance, then the group policy shall insure at least two\nhundred service providers at date of issue.\n (g) (1) Any policy dividend, retrospective premium credit, or\nretrospective premium refund in respect of premiums paid by the group\npolicyholder may:\n (A) be applied to reduce the premium contribution of the group\npolicyholder, but not in excess of the proportion to its contribution;\nor\n (B) be retained by the group policyholder.\n (2) Any policy dividend, retrospective premium credit, or\nretrospective premium refund not distributed under paragraph one of this\nsubsection shall be:\n (A) applied to reduce future premiums and, accordingly, future\ncontributions, of existing or future group members, or both; or\n (B) paid or refunded to those group members insured on the date the\npayment or refund is made to the group policyholder, if distributed by\nthe group policyholder, or on the date of mailing, if distributed\ndirectly by the insurer, subject to the following requirements:\n (i) the insurer shall be responsible for determining the allocation of\nthe payment or refund to the group members;\n (ii) if the group policyholder distributes the payment or refund, the\ninsurer shall be responsible for audit to ascertain that the payment or\nrefund is actually made in accordance with the allocation procedure; and\n (iii) if the group policyholder fails to make the payment or refund,\nthe insurer shall make the payment or refund directly or use the method\nprovided in subparagraph (A) of this paragraph.\n (3) Notwithstanding paragraphs one and two of this subsection, if a\ndividend accrues upon termination of coverage under a group policy, the\npremium for which was paid out of funds contributed by group members\nspecifically for the coverage, then the dividend shall be paid or\nrefunded by the group policyholder to the group members insured on the\ndate the payment or refund is made to the group policyholder net of\nreasonable expenses incurred by the group policyholder in paying or\nrefunding the dividend to such group members.\n (4) For the purposes of this subsection, "dividend" means a return by\nan insurer to a group policyholder of excess premiums paid by that group\npolicyholder in light of favorable loss experience, including\nretrospective premium credits or retrospective premium refunds. The term\n"dividend" does not include reimbursements or fees received by a group\npolicyholder in connection with the operation or administration of a\ngroup policy, including administrative reimbursements, fees for services\nprovided by the group policyholder, or transactional service fees.\n (h) The insurer must treat in like manner all eligible group members\nof the same class and status.\n (i) A group policy or certificate shall not be eligible for placement\nby an excess line broker licensed pursuant to article twenty-one of this\nchapter.\n (j)(1) The insurer shall be responsible for the mailing or delivery of\na certificate of insurance to each group member. The insurer also shall\nbe responsible for the mailing or delivery to each group member of an\namended certificate of insurance, or endorsement to the certificate,\nwhenever there is a change of limits; change in type of coverage;\naddition, reduction, or elimination of coverage; or addition of\nexclusion, under the group policy or certificate.\n (2) The certificate shall contain in substance all material terms and\nconditions of coverage afforded to the group member, unless the group\npolicy is incorporated by reference and a copy of the group policy\naccompanies the certificate.\n (3) If coverage afforded to the group member is in excess of other\napplicable insurance coverage, then the certificate shall contain a\nnotice advising the group member that if the member has other insurance\ncoverage, specified coverages under the group policy will be excess over\nthe other insurance.\n (k) A group policyholder shall comply with the provisions of section\ntwo thousand one hundred twenty-two of this chapter, in the same manner\nas an agent or broker, in any advertisement, sign, pamphlet, circular,\ncard, or other public announcement referring to coverage under a group\npolicy or certificate.\n (l) A group policy or certificate shall not be subject to section\nthree thousand four hundred twenty-five or section three thousand four\nhundred twenty-six of this article. The following requirements shall\napply in regard to termination of coverage:\n (1)(A) An insurer may terminate a group policy or certificate only if\ncancellation is based on one or more of the reasons set forth in\nsubparagraphs (A) through (D) or (F) through (H) of paragraph one of\nsubsection (c) of section three thousand four hundred twenty-six of this\narticle; provided, however, that an act or omission by a group member\nthat would constitute the basis for cancellation of an individual\ncertificate shall not constitute the basis for cancellation of the group\npolicy.\n (B) Where the premium is derived wholly from funds contributed by the\ngroup policyholder, an insurer may cancel an individual certificate only\nif cancellation is based on one or more of the reasons set forth in\nsubparagraph (B), (C) or (H) of paragraph one of subsection (c) of\nsection three thousand four hundred twenty-six of this article.\n (2)(A) An insurer's cancellation of a group policy, including all\ncertificates, shall not become effective until fifteen days after the\ninsurer mails or delivers written notice of cancellation to the group\npolicyholder at the mailing address shown in the policy.\n (i) Where all or part of the premium is derived from funds contributed\nby the group member specifically for the coverage, the insurer also\nshall mail or deliver written notice of cancellation of the group policy\nto the group member at the group member's mailing address.\n (ii) Where none of the premium is derived from funds contributed by a\ngroup member specifically for the coverage, the group policyholder shall\nmail or deliver written notice to the group member advising the group\nmember of the cancellation of the account group policy and the effective\ndate of cancellation. The group policyholder shall mail or deliver the\nwritten notice within ninety days after receiving notice of cancellation\nfrom the insurer.\n (B) An insurer's cancellation of an individual certificate shall not\nbecome effective until fifteen days after the insurer mails or delivers\nwritten notice of cancellation to the group member at the group member's\nmailing address and to the group policyholder at the mailing address\nshown in the group policy.\n (C)(i) A group policyholder may cancel a group policy, including all\ncertificates, or any individual certificate, for any reason upon thirty\ndays written notice to the insurer and each group member; and\n (ii) The group policyholder shall mail or deliver written notice to\neach affected group member of the group policyholder's cancellation of\nthe group policy or certificate and the effective date of cancellation.\nThe group policyholder shall mail or deliver the written notice to the\ngroup member's mailing address at least thirty days prior to the\neffective date of cancellation.\n (3)(A) Unless a group policy provides for a longer policy period, the\npolicy and all certificates shall be issued or renewed for a one-year\npolicy period.\n (B) The group policyholder shall be entitled to renew the group policy\nand all certificates upon timely payment of the premium billed to the\ngroup policyholder for the renewal, unless:\n (i) the insurer mails or delivers to the group policyholder and all\ngroup members written notice of nonrenewal, or conditional renewal; and\n (ii) the insurer mails or delivers the written notice at least thirty,\nbut not more than one hundred twenty days prior to the expiration date\nspecified in the policy or, if no date is specified, the next\nanniversary date of the policy.\n (4) Where the group policyholder nonrenews the group policy, the group\npolicyholder shall mail or deliver written notice to each group member\nadvising the group member of nonrenewal of the group policy and the\neffective date of nonrenewal. The group policyholder shall mail or\ndeliver written notice at least thirty days prior to the nonrenewal.\n (5) Every notice of cancellation, nonrenewal, or conditional renewal\nshall set forth the specific reason or reasons for cancellation,\nnonrenewal, or conditional renewal.\n (6)(A) An insurer shall not be required under this subsection to give\nnotice to a group member if the insurer has been advised by either the\ngroup policyholder or another insurer that substantially similar\ncoverage has been obtained from the other insurer without lapse of\ncoverage.\n (B) A group policyholder shall not be required under this subsection\nto give notice to a group member if substantially similar coverage has\nbeen obtained from another insurer without lapse of coverage.\n (7)(A) If, prior to the effective date of cancellation, nonrenewal, or\nconditional renewal of the group policy, or a certificate, whether\ninitiated by the insurer, group policyholder or by the group member in\nregard to the group member's certificate, coverage attaches pursuant to\nthe terms of a group policy, then the coverage shall be effective until\nexpiration of the applicable period of coverage provided in the group\npolicy notwithstanding the cancellation, nonrenewal or conditional\nnonrenewal of the group policy.\n (B) Notwithstanding subparagraph (A) of this paragraph, an insurer may\nterminate coverage under an individual certificate on the effective date\nof cancellation, if the certificate is cancelled in accordance with the\nprovisions of subparagraph (B) of paragraph one of this subsection.\n (m) Notwithstanding any regulation to the contrary, rates and forms\nfor any group policy issued or issued for delivery in this state\npursuant to this section shall be filed with the superintendent in\naccordance with article twenty-three of this chapter.\n * NB There are 3 § 3453's\n