New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter XI - Prepaid Legal Services Plans And Legal Services Insurance
Part 261 - Prepaid Legal Services Plans
Section 261.5 - Prepaid legal services plans; group basis
Universal Citation: 11 NY Comp Codes Rules and Regs ยง 261.5
Current through Register Vol. 46, No. 12, March 20, 2024
(a) A policy or certificate of a prepaid legal services plan may be issued or delivered on a group basis only if the group conforms to one of the following descriptions:
(1) A policy issued to an employer or to a
trustee or trustees of a fund established by an employer, which employer or
trustee or trustees shall be deemed the policyholder, covering employees of
such employer, and covering all of such employees or all of any class or
classes thereof, including retired employees, determined by conditions
pertaining to the employment. The premium for the policy shall be paid by the
policyholder, either wholly from the employer's funds, or from funds
contributed by the covered employees, or from funds contributed jointly by the
employer and employees. A policy on which no part of the premium is to be
derived from funds contributed by the covered employees specifically for their
coverage must cover all eligible employees. If all or part of the premium is to
be derived from funds contributed by the covered employees, then such employees
shall have the right to decline coverage under the policy.
(2) A policy issued to a trustee or trustees
of a fund established by, or participated in, by the employer members of a
trade association, which trustees shall be deemed the policyholder for the sole
benefit of the employees of such employers. The policy shall conform to the
following requirements:
(i) The policy may be
issued only if the association has been in existence for at least two years and
was formed principally for purposes other than obtaining insurance.
(ii) The persons eligible for coverage under
the policy shall be all of the employees of the participating employers, or all
of any class or classes thereof determined by conditions pertaining to their
employment.
(iii) The premium for
the policy shall be paid by the trustee or trustees either from funds
contributed wholly by the employers or wholly by the employees, or funds
contributed jointly by the employers and the employees. A policy on which no
part of the premium so payable is to be derived from funds contributed by the
covered employees specifically for their coverage must insure all eligible
employees. If all or part of the premium is to be derived from funds
contributed by the covered employees, then such employees shall have the right
to decline coverage under the policy.
(3) A policy issued to a labor union, or to a
duly organized association of civil service employees, which shall be deemed
the policyholder, covering members of such union and covering all of such
members or of any class or classes thereof determined by conditions pertaining
to their employment or membership in the union or both. A policy on which no
part of the premium is to be derived from funds contributed by the covered
members specifically for their coverage must cover all eligible members. If all
or part of the premium is to be derived from funds contributed by the covered
members, then such members shall have the right to decline coverage under the
policy.
(4) A policy issued to a
trustee or trustees of a fund established, or participated in, by two or more
employers or by one or more labor unions, or by one or more employers and one
or more labor unions, which trustee or trustees shall be deemed the
policyholder, to cover employees of the employers or members of the unions for
the benefit of persons other than the employers or the unions, subject to the
following requirements:
(i) The persons
eligible for coverage shall be all of the employees of the employers or all of
the members of the unions, or all of any class or classes thereof determined by
conditions pertaining to their employment, or to membership in the unions, or
to both.
(ii) The premium for the
policy shall be paid by the trustee or trustees either wholly from funds
contributed by the employer or employers of the covered person or by the union
or unions, or by both, or jointly from such funds and funds contributed by the
covered persons specifically for their coverage or from contributions by the
covered persons. A policy on which no part of the premium so payable is to be
derived from funds contributed by the covered persons specifically for their
coverage must cover all eligible persons. If all or part of the premium is to
be derived from funds contributed by the covered persons, then such persons
shall have the right to decline coverage under the policy.
(iii) With respect to a policy issued to a
trustee or trustees of a fund established by one or more labor unions, or by
one or more employers and one or more labor unions, the insurer shall obtain a
written certification that a reasonable number of comparative bids have been
obtained from different insurers and that such bids have been considered by the
trustees before making a decision concerning which bid to accept. The
certification shall state that such decision was made at a trustees' meeting
held on a date certain, and a copy of the minutes of such meeting shall be
attached to such certification.
(5) A policy issued to an association, or to
a trustee or trustees of a fund established, created or maintained for the
benefit of members of one or more associations, all of whose eligible members
have the same profession, trade or occupation, which association or
associations have been organized and maintained in good faith for purposes
principally other than that of obtaining coverage and have been in active
existence for at least two years. The policy shall cover members, or employees
of members, of such association or associations for the benefit of persons
other than employers and the association or associations, or any officials,
representatives, trustees or agents thereof. The members or employees eligible
for the coverage under the policy shall be all the members, or all the members
and their employees, or all of any class or classes thereof determined by
conditions pertaining to their employment or to association membership or
both.
(6) A policy issued to a
continuing care retirement community operating under a certificate of authority
issued pursuant to article 46 of the Public Health Law which insures the
residents of the community.
(7) A
policy covering persons employed under
32 U.S.C. section
709, members of the national guard on
full-time training duty under title 32 of the United States Code, or on active
duty or active duty for training under title 10 of the United States Code,
under the full-time manning program, issued to the adjutant general, who shall
be deemed the policyholder, or to a trustee or trustees of a fund established,
created, or maintained for the benefit of such individuals covered, which
trustee or trustees shall be deemed the policyholder, the premium of which is
to be paid by the individuals covered either directly or by deduction from
wages or salary.
(8) A policy
issued to a college, school or other institution of learning or to the head or
principal thereof, who or which shall be deemed the policyholder, covering the
students of such college, school or other institution of learning.
(b)
(1) Except as provided in paragraph (2) of
this subdivision, coverage under a group prepaid legal services policy shall be
based upon a plan precluding individual selection either by the insureds or by
the policyholder.
(2) A group
recognized pursuant to paragraph (a)(2), (4), or (5) of this section, may
permit a number of selections by the policyholder, if the selections offered
utilize consistent plans of coverage so that the resulting plans of coverage
are reasonable.
(3) Any policy
issued under subdivision (a) of this section may permit a limited number of
selections by the group members if the selections offered utilize consistent
plans of coverage for individual group members so that the resulting plans of
coverage are reasonable.
(c) A group policy shall cover all persons without evidence of insurability, provided that coverage is elected during an initial period of eligibility of at least 30 days. Rules may be established limiting future enrollment to specified time periods. An insurer shall establish minimum participation requirements that afford adequate protection against anti-selection where all or part of the premiums are derived from funds contributed by the covered group members specifically for their coverage.
(d) A certificate issued to a group member under a group master policy shall contain all material terms and conditions affecting an insured, unless the group master policy is incorporated by reference and a copy of the master policy accompanies the certificate.
(e) Except as specifically permitted under subdivision (a) of this section, no insurer shall provide coverage in regard to a group policy that:
(1) requires the purchase of insurance as a
condition of group membership; or
(2) imposes any penalty upon a group member
if insurance is not purchased.
(f) Except as specifically permitted under subdivision (a) of this section, no insurer shall provide coverage in regard to a group policy if:
(1) the purchase of any
good or service from the group is a condition of purchasing insurance by a
group member; or
(2) the purchase
of insurance by a group member is a condition of purchasing any good or service
from the group.
(g) No group policy, master policy or certificate shall be subject to a group or sub-group aggregate group policy limit of any kind at any time, and any policy limit applicable to an insured shall:
(1) be
separate and apart from any limit to which any other insured under the group
policy may be subject; and
(2)
operate unaffected by the experience of any other insured or the overall
experience of the group itself.
(h) Except as provided for in this Part, a group policy under this Part shall be subject to the provisions of sections 153.3(f) and (g), 153.4(b), 153.5, 153.6, and 153.7(a), (b), (d) and (e) of this Title (Regulation 135) as those provisions relate to group insurance.
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