New York Laws
Article 11 - Licensing of Insurers
1116 - Prepaid Legal Services Plans and Legal Services Insurance.

(2) A prepaid legal services plan may include legal services insurance
as part of the plan, provided however, not more than an incidental
amount of the premium with respect to such prepaid legal services plan
shall be attributable to legal services for defense only coverages for
commercial or other business related lawsuits or arbitration proceedings
commenced against the business entity that purchased the policy.
(3) Legal services insurance may not be written except (i) in
conjunction with prepaid legal services plans as authorized in this
section, or (ii) pursuant to a regulation promulgated by the
superintendent permitting legal services insurance to be written as part
of a policy of liability insurance covering related risks and, provided
further, that legal services for defense only coverages for commercial
or other business related lawsuits or arbitration proceedings commenced
against the business entity that purchased the policy is not more than
an incidental part of such liability insurance.
(b) The superintendent may, in accordance with the provisions of
article twenty-three of this chapter, authorize the issuance of
contracts in connection with a prepaid legal services plan when such
plan satisfies the following criteria:
(1) its provisions are not misleading, confusing or inconsistent with
the needs of the public;
(2) it avoids interference with judicial supervision over the
professional and public obligations of lawyers;
(3) it provides for prompt resolution of grievances concerning
benefits;
(4) it does not restrict the beneficiary's choice of attorney,
provided, however, that compensation by the plan for attorneys not
participating in the plan shall be subject to the schedule of benefits
and fee structure set forth in the applicable contract and, provided
further, that nothing herein shall be construed as prohibiting an
attorney who is not participating in the plan from charging a fee for
services provided in excess of the schedule of benefits or fee structure
set forth in the applicable contract;
(5) it provides for a broad range of legal services, through personal
and telephone consultations, such as wills, residential real estate
matters and domestic relations matters, provided nothing herein shall
require or prohibit the offering of a particular type of legal services
by a prepaid legal services plan;
(6) it provides for written disclosure to contract holders, including
a description of the schedule of benefits, fee structure, exclusions or

other limitations on benefits, and an explanation of a covered person's
financial responsibility for the payment of premiums, co-payments,
deductibles or amounts charged in excess of the schedule of benefits or
fee structure by attorneys not participating in a plan;
(7) unless it provides for a shorter period, as provided in a
paragraph two of subsection (d) of section three thousand four hundred
twenty-six of this chapter, or for a longer period, the plan shall be
issued or renewed for a one-year policy period;
(8) it may be cancelled by an insurer only if cancellation is based on
one or more of the reasons set forth in paragraph one of subsection (c)
of section three thousand four hundred twenty-six of this chapter upon
no less than fifteen days written notice to a contract holder and shall
include no less than a fifteen-day grace period in the event of a
cancellation based on non-payment of premium, provided, however, in the
event a contract is issued on a group basis, an individual group member
may be canceled upon termination of his or her employment with or
membership in the group contract holder;
(9) it may be nonrenewed by an insurer for any reason upon at least
forty-five, but not more than sixty, days written notice to a contract
holder; and
(10) it may be cancelled by a contract holder for any reason upon
thirty days written notice to an insurer.
(c) The contracts may be issued on a group basis subject to
regulations promulgated by the superintendent.
(d) Such contracts shall be subject to all other applicable provisions
of this chapter and regulations thereunder.
(e) The superintendent may permit an authorized insurer subject to the
provisions of this section to enter into contracts with any corporation
or other organization, which provides or sponsors a prepaid legal
services plan not subject to this chapter, to administer such plan if
the plan satisfies the criteria set forth in subsection (b) of this
section and provided the superintendent makes the determinations set
forth in subsection (g) of this section. Such administration may
include, but need not be limited to, marketing, actuarial, data
processing, accounting, claims and other related services. Such
contracts shall provide for the payment of a reasonable fee for such
administrative services.
(f) The superintendent may permit an authorized insurer subject to the
provisions of this chapter to reinsure the risk of any prepaid legal
services plan as if it were legal services insurance if the plan
satisfies the criteria set forth in subsection (b) of this section,
provided the superintendent makes the determinations set forth in
subsection (g) of this section. Such reinsurance agreements shall
provide for the payment of a reasonable premium.
(g) The superintendent may take the actions set forth in subsections
(a), (e) and (f) of this section only if the superintendent determines,
with respect to each such action, that:
(1) the sponsors and other participants in the plan can reasonably be
anticipated to be able to carry out their responsibilities under the
plan, and
(2) the plan attempts to address the problem that desired legal
services are unavailable to some citizens of this state because some
individuals and families who are not eligible for government subsidized
programs cannot afford the cost of those services, and
(3) the proposed activity by the authorized insurer will not cause or
constitute an impairment of the insurer's ability to satisfy its
existing and anticipated contracts and other obligations, including such

standards as the superintendent prescribes concerning adequate capital
and financial requirements.
(h) The superintendent shall promulgate such regulations that are
necessary to implement the provisions of this section.