New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter A - Life, Accident and Health Insurance
Part 52 - Minimum Standards For Form, Content And Sale Of Health Insurance, Including Standards Of Full And Fair Disclosure
Section 52.53 - Conditional receipts and interim insurance agreements

Universal Citation: 11 NY Comp Codes Rules and Regs § 52.53

Current through Register Vol. 46, No. 39, September 25, 2024

Except as otherwise stated herein an insurer must issue either a conditional receipt or interim insurance agreement if premium is paid prior to delivery of the policy and the insurer requires a determination of insurability as a condition precedent to the issuance of a policy. The following rules shall apply to conditional receipts and interim insurance agreements:

(a) A conditional receipt which requires a determination of insurability as a condition precedent to coverage shall include an agreement:

(1) to provide coverage subject to any reasonable limit regarding the amount of insurance specified in the receipt, contingent upon insurability; and

(2) to provide that such insurability be determined as of a date no later than the date of completion of all parts of the application, including completion of the first medical examination if one is required by the company's underwriting rules, and the required premium has been paid. Completion of a second medical examination may be required as a condition precedent to coverage if initially required by the company's underwriting rules because of the amount of insurance applied for or the age of the proposed insured.

(b) An interim insurance agreement which provides immediate coverage shall include an agreement:

(1) to provide coverage in accordance with the policy and plan of insurance described in the application subject to any reasonable limit regarding the amount or duration of insurance specified in the agreement; and

(2) to provide coverage as of the date of application. The period of coverage must be at least 60 days unless the policy applied for is issued prior to such date or the applicant receives actual notice that coverage under the agreement is cancelled because the application has been declined. If notice is given by mail, it may be deemed received on the fifth day after mailing such notice to the applicant.

(c) A determination of insurability means a determination by the company as to whether the proposed insured is insurable under its underwriting rules and practices for the plan and amount of insurance applied for and at the company's standard premium rate.

(d) If the proposed insured is insurable as of the date provided for in paragraph (a)(2) of this section, coverage shall begin not later than such date, except as provided in subdivision (f) of this section. If coverage is provided under a conditional receipt or interim insurance agreement for two or more proposed insureds, such coverage must be determined separately for each proposed insured, except, however, all proposed insureds may be rejected in the event of fraud or material misrepresentation.

(e) Although the proposed insured dies, undergoes a change in health or otherwise becomes uninsurable according to the company's underwriting standards for the plan of insurance for which application was made after the date provided for in subdivision (a) of this section but before the application is approved or rejected, and before the expiration of any time limit specified in the receipt, a company may determine that the proposed insured is not insurable only as of the date specified in subdivision (a) of this section. Information relating to a event or physical condition which is the subject of a question in any part of the company's application cannot be considered for underwriting purposes if the event or accident occurred or sickness first manifested itself after completion of that part of the application.

(f) A company may honor a written request from the applicant that coverage is to commence as of a specified date later than the date provided for in either subdivision (a) or (b) of this section. In other than replacement situations, the written request must contain a statement signed by the applicant that he understands that he may be waiving certain rights and guarantees under the conditional receipt or interim insurance agreement.

(g) Only in mail order cases, and in cases where a premium is paid in advance and certain participation requirements must be met, is it permissible for a company to postpone the effective date of coverage to the date of issuance of the policy.

(h) In franchise cases, the coverage under the conditional receipt or interim insurance agreement may be made contingent upon meeting specified participation requirements.

(i) If a policy is not issued within the time specified in the conditional receipt or interim insurance agreement, the application shall be deemed rejected and refund of all premiums shall be made.

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