New York Laws
Article 32 - Insurance Contracts - Life, Accident and Health, Annuities
3231 - Rating of Individual and Small Group Health Insurance Policies; Approval of Superintendent.

(b) (1) The superintendent may set standard premium tiers and standard
rating relativities between tiers applicable to all policies subject to
this section. The superintendent may set a standard relativity
applicable to child-only policies issued pursuant to section 1302(f) of
the affordable care act, 42 U.S.C. § 18022(f). The relativity for
child-only policies shall be actuarially justifiable using the aggregate
experience of insurers to prevent the charging of unjustified premiums.

The superintendent may adjust such premium tiers and relativities
periodically based upon the aggregate experience of insurers. (2) An
insurer shall establish separate community rates for individuals as
opposed to small groups. (3) If an insurer is required to issue a policy
to individual proprietors pursuant to subsection (i) of this section,
such policy shall be subject to subsection (a) of this section.
(c) (1) The superintendent shall permit the use of separate community
rates for reasonable geographic regions, which may, in a given case,
include a single county. The regions shall be approved by the
superintendent as part of the rate filing. The superintendent shall not
require the inclusion of any specific geographic regions within the
proposed community rated regions selected by the insurer in its rate
filing so long as the insurer's proposed regions do not contain
configurations designed to avoid or segregate particular areas within a
county covered by the insurer's community rates. (2) Beginning on
January first, two thousand fourteen, for every policy subject to this
section that provides physician services, medical, major medical or
similar comprehensive-type coverage, except for medicare supplement
plans, insurers shall use standardized regions established by the
superintendent.
(d) (1) Notwithstanding any other provision of this chapter to the
contrary, no policy form subject to this section shall be issued or
delivered, nor any insurance contract entered into, unless and until the
insurer has filed with the superintendent a schedule of premiums, not to
exceed twelve months in duration, to be paid under the policy forms and
obtained the superintendent's approval thereof. The superintendent may
refuse such approval if he or she finds that such premiums are
excessive, inadequate, or unfairly discriminatory. The superintendent
may consider the financial condition of such insurer in approving or
disapproving any premium. In determining whether to approve the schedule
of premiums filed, the superintendent shall, subject to the provisions
of section three thousand two hundred thirty-three of this article,
consider the prior experience of the insurer's community pool and the
insurer's projections relating to claim costs, utilization and
administrative expenses and shall not adjust the insurer's rates based
upon the rates approved for other insurers.
(2) An insurer shall provide specific claims experience to a municipal
corporation, as defined in subsection (f) of section four thousand seven
hundred two of this chapter, covered by the insurer under a community
rated policy when the municipal corporation requests its claims
experience for purposes of forming or joining a municipal cooperative
health benefit plan certified pursuant to article forty-seven of this
chapter. Notwithstanding the forgoing provisions, no insurer shall be
required to provide more than three years' claims experience to a
municipal corporation making this request.
(e) (1) (A) An insurer desiring to increase or decrease premiums for
any policy form subject to this section shall submit a rate filing or
application to the superintendent.
An insurer shall send written notice of the proposed rate adjustment,
including the specific change requested, to each policy holder and
certificate holder affected by the adjustment on or before the date the
rate filing or application is submitted to the superintendent. The
notice shall prominently include mailing and website addresses for both
the department of financial services and the insurer through which a
person may, within thirty days from the date the rate filing or
application is submitted to the superintendent, contact the department
of financial services or insurer to receive additional information or to
submit written comments to the department of financial services on the

rate filing or application. The superintendent shall establish a process
to post on the department's website, in a timely manner, all relevant
written comments received pertaining to rate filings or applications.
The insurer shall provide a copy of the notice to the superintendent
with the rate filing or application. The superintendent shall
immediately cause the notice to be posted on the department of financial
services' website. The superintendent shall determine whether the filing
or application shall become effective as filed, shall become effective
as modified, or shall be disapproved. The superintendent may modify or
disapprove the rate filing or application if the superintendent finds
that the premiums are unreasonable, excessive, inadequate, or unfairly
discriminatory, and may consider the financial condition of the insurer
when approving, modifying or disapproving any premium adjustment. The
determination of the superintendent shall be supported by sound
actuarial assumptions and methods, and shall be rendered in writing
between thirty and sixty days from the date the rate filing or
application is submitted to the superintendent. Should the
superintendent require additional information from the insurer in order
to make a determination, the superintendent shall require the insurer to
furnish such information, and in such event, the sixty days shall be
tolled and shall resume as of the date the insurer furnishes the
information to the superintendent. If the superintendent requests
additional information less than ten days from the expiration of the
sixty days (exclusive of tolling), the superintendent may extend the
sixty day period an additional twenty days to make a determination. The
application or rate filing will be deemed approved if a determination is
not rendered within the time allotted under this section. An insurer
shall not implement a rate adjustment unless the insurer provides at
least sixty days advance written notice of the premium rate adjustment
approved by the superintendent to each policy holder and certificate
holder affected by the rate adjustment.
(B) The expected minimum loss ratio for a policy form subject to this
section, for which a rate filing or application is made pursuant to this
paragraph, other than a medicare supplemental insurance policy, or, with
the approval of the superintendent, an aggregation of policy forms that
are combined into one community rating experience pool and rated
consistent with community rating requirements, shall not be less than
eighty-two percent. In reviewing a rate filing or application, the
superintendent may modify the eighty-two percent expected minimum loss
ratio requirement if the superintendent determines the modification to
be in the interests of the people of this state or if the superintendent
determines that a modification is necessary to maintain insurer
solvency. No later than July thirty-first of each year, every insurer
subject to this subparagraph shall annually report the actual loss ratio
for the previous calendar year in a format acceptable to the
superintendent. If an expected loss ratio is not met, the superintendent
may direct the insurer to take corrective action, which may include the
submission of a rate filing to reduce future premiums, or to issue
dividends, premium refunds or credits, or any combination of these.
(2) (A) Until September thirtieth, two thousand ten, as an alternate
procedure to the requirements of paragraph one of this subsection, an
insurer desiring to increase or decrease premiums for any policy form
subject to this section may instead submit a rate filing or application
to the superintendent and such application or filing shall be deemed
approved, provided that: (i) the anticipated minimum loss ratio for a
policy form shall not be less than eighty-two percent of the premium;
and (ii) the insurer submits, as part of such filing, a certification by
a member of the American Academy of Actuaries or other individual

acceptable to the superintendent that the insurer is in compliance with
the provisions of this paragraph, based upon that person's examination,
including a review of the appropriate records and of the actuarial
assumptions and methods used by the insurer in establishing premium
rates for policy forms subject to this section. An insurer shall not
utilize the alternate procedure pursuant to this paragraph to implement
a change in rates to be effective on or after October first, two
thousand ten.
(B) Each calendar year, an insurer shall return, in the form of
aggregate benefits for each policy form filed pursuant to the alternate
procedure set forth in this paragraph at least eighty-two percent of the
aggregate premiums collected for the policy form during that calendar
year. Insurers shall annually report, no later than June thirtieth of
each year, the loss ratio calculated pursuant to this paragraph for each
such policy form for the previous calendar year. In each case where the
loss ratio for a policy form fails to comply with the eighty-two percent
loss ratio requirement, the insurer shall issue a dividend or credit
against future premiums for all policy holders with that policy form in
an amount sufficient to assure that the aggregate benefits paid in the
previous calendar year plus the amount of the dividends and credits
shall equal eighty-two percent of the aggregate premiums collected for
the policy form in the previous calendar year. The dividend or credit
shall be issued to each policy holder who had a policy which was in
effect at any time during the applicable year. The dividend or credit
shall be prorated based on the direct premiums earned for the applicable
year among all policy holders eligible to receive such dividend or
credit. An insurer shall make a reasonable effort to identify the
current address of, and issue dividends or credits to, former policy
holders entitled to the dividend or credit. An insurer shall, with
respect to dividends or credits to which former policy holders that the
insurer is unable to identify after a reasonable effort would otherwise
be entitled, have the option, as deemed acceptable by the
superintendent, of prospectively adjusting premium rates by the amount
of such dividends or credits, issuing the amount of such dividends or
credits to existing policy holders, depositing the amount of such
dividends or credits in the fund established pursuant to section four
thousand three hundred twenty-two-a of this chapter, or utilizing any
other method which offsets the amount of such dividends or credits. All
dividends and credits must be distributed by September thirtieth of the
year following the calendar year in which the loss ratio requirements
were not satisfied. The annual report required by this paragraph shall
include an insurer's calculation of the dividends and credits, as well
as an explanation of the insurer's plan to issue dividends or credits.
The instructions and format for calculating and reporting loss ratios
and issuing dividends or credits shall be specified by the
superintendent by regulation. Such regulations shall include provisions
for the distribution of a dividend or credit in the event of
cancellation or termination by a policy holder.
(3) All policy forms subject to this subsection, other than medicare
supplemental insurance policy forms, issued or in effect during calendar
year two thousand ten shall be subject to a minimum loss ratio
requirement of eighty-two percent. Insurers may use the alternate filing
procedure set forth in paragraph two of this subsection to adjust
premium rates in order to meet the required minimum loss ratio for
calendar year two thousand ten. The rate filing or application shall be
submitted no later than September thirtieth, two thousand ten.
(f) (1) In the case of disapproval or modification of a requested rate
change by more than twenty percent for any policy to which prior

approval applies, the insurer shall have the right to request a hearing
before the superintendent, or his or her representative, in order for
the insurer to present any evidence, arguments or other information as
to why the insurer believes the superintendent's disapproval or
modification is not appropriate. Such hearing shall not be a required
condition prior to any challenge to the disapproval or modification
pursuant to the civil practice law and rules, but if an insurer
challenges the superintendent's disapproval or modification pursuant to
the civil practice law and rules, the insurer shall not be entitled to
such hearing. An insurer entitled to such hearing must make a written
request for such hearing no later than thirty days after the date of the
superintendent's decision. The hearing shall be held as soon as
practicable thereafter, but not sooner than twenty days from receipt of
the request for the hearing. A stenographic record of all hearings shall
be made. The superintendent shall provide the insurer with a written
response to the insurer's presentation at the hearing no later than
forty-five days after the date of the hearing. The superintendent's
written response pursuant to this subsection shall be subject to
challenge as provided for in article seventy-eight of the civil practice
law and rules.
(2) Such hearing shall not be required in any case where the
superintendent returns the initial filing within thirty days on the
basis that the premium increase or decrease requested by the insurer is
unreasonable.
(g) * (1) (A) This section shall also apply to policies issued to a
group defined in subsection (c) of section four thousand two hundred
thirty-five of this chapter, including but not limited to an association
or trust of employers, if the group includes one or more member
employers or other member groups having one hundred or fewer employees
or members exclusive of spouses and dependents. For a policy issued or
renewed on or after January first, two thousand fourteen, if the group
includes one or more member small group employers eligible for coverage
subject to this section, then such member employers shall be classified
as small groups for rating purposes and the remaining members shall be
rated consistent with the rating rules applicable to such remaining
members pursuant to paragraph two of this subsection. (B) Subparagraph A
of this paragraph shall not apply to either the renewal of a policy
issued to a group or the issuance, between January first, two thousand
sixteen and December thirty-first, two thousand sixteen, of a policy,
and any renewal thereof, to a group, provided that the following three
requirements are met: (I) the group had been issued a policy that was in
effect on July first, two thousand fifteen; (II) the group had member
employers, who, on or after July first, two thousand fifteen, have
between fifty-one and one hundred employees, exclusive of spouses and
dependents; and (III) the group is either: (i) comprised entirely of one
or more municipal corporations or districts (as such terms are defined
in section one hundred nineteen-n of the general municipal law); or (ii)
comprised entirely of nonpublic schools providing education in any grade
from pre-kindergarten through twelfth grade.
* NB Effective until December 28, 2025
* (1) This section shall also apply to policies issued to a group
defined in subsection (c) of section four thousand two hundred
thirty-five, including but not limited to an association or trust of
employers, if the group includes one or more member employers or other
member groups which have one hundred or fewer employees or members
exclusive of spouses and dependents. For policies issued or renewed on
or after January first, two thousand fourteen, if the group includes one
or more member small group employers eligible for coverage subject to

this section, then such member employers shall be classified as small
groups for rating purposes and the remaining members shall be rated
consistent with the rating rules applicable to such remaining members
pursuant to paragraph two of this subsection.
* NB Effective December 28, 2025
(2) If a policy is issued to a group defined in subsection (c) of
section four thousand two hundred thirty-five of this chapter, including
an association group, that includes one or more individual or individual
proprietor members, for rating purposes the insurer shall include such
members in its individual pool of risks in establishing premium rates
for such members.
(h) * (1) Notwithstanding any other provision of this chapter, no
insurer, subsidiary of an insurer, or controlled person of a holding
company system may act as an administrator or claims paying agent, as
opposed to an insurer, on behalf of small groups which, if they
purchased insurance, would be subject to this section. No insurer may
provide stop loss, catastrophic or reinsurance coverage to small groups
which, if they purchased insurance, would be subject to this section.
Provided, however, the provisions of this paragraph shall not apply to:
(A) the renewal of stop loss, catastrophic or reinsurance coverage
issued and in effect on January first, two thousand fifteen to small
groups covering between fifty-one and one hundred employees or members
of the group; and (B) the issuance between January first, two thousand
sixteen and December thirty-first, two thousand sixteen, of stop loss,
catastrophic or reinsurance coverage, and any renewal thereof, to a
small group covering between fifty-one and one hundred employees or
members of the group, provided that such group had stop loss,
catastrophic or reinsurance coverage issued and in effect on January
first, two thousand fifteen.
* NB Effective until December 28, 2025
* (1) Notwithstanding any other provision of this chapter, no insurer,
subsidiary of an insurer, or controlled person of a holding company
system may act as an administrator or claims paying agent, as opposed to
an insurer, on behalf of small groups which, if they purchased
insurance, would be subject to this section. No insurer, subsidiary of
an insurer, or controlled person of a holding company may provide stop
loss, catastrophic or reinsurance coverage to small groups which, if
they purchased insurance, would be subject to this section.
* NB Effective December 28, 2025
(2) This subsection shall not apply to coverage insuring a plan which
was in effect on or before December thirty-first, nineteen hundred
ninety-one and was issued to a group which includes member small
employers or other member small groups, including but not limited to
association groups, provided that (A) acceptance of additional small
member employers (or other member groups comprised of fifty or fewer
employees or members, exclusive of spouses and dependents) into the
group on or after June first, nineteen hundred ninety-two and before
April first, nineteen hundred ninety-four does not exceed an amount
equal to ten percent per year of the total number of persons covered
under the group as of June first, nineteen hundred ninety-two, but
nothing in this subparagraph shall limit the addition of larger member
employers; (B) (i) after April first, nineteen hundred ninety-four, the
group thereafter accepts member small employers and member small groups
without underwriting by any more than the imposition of a pre-existing
condition limitation as permitted by this article and the cost for
participation in the group for all persons covered shall be the same
based on the experience of the entire pool of risks covered under the
entire group, without regard to age, sex, health status or occupation;

and (ii) once accepted for coverage, an individual or small group cannot
be terminated due to claims experience; (C) the insurer has registered
the names of such groups, including the total number of persons covered
as of June first, nineteen hundred ninety-two, with the superintendent,
in a form prescribed by the superintendent, on or before April first,
nineteen hundred ninety-three and shall report annually thereafter until
such groups comply with the provisions of subparagraph (B) of this
paragraph; and (D) the types or categories of employers or groups
eligible to join the association are not altered or expanded after June
first, nineteen hundred ninety-two.
(3) An insurer may apply to the superintendent for an extension or
extensions of time beyond April first, nineteen hundred ninety-four in
which to implement the provisions of this subsection as they relate to
groups registered with the superintendent pursuant to subparagraph (C)
of paragraph two of this subsection; any such extension or extensions
may not exceed two years in aggregate duration, and the ten percent per
year limitation of subparagraph (A) of paragraph two of this subsection
shall be reduced to five percent per year during the period of any such
extension or extensions. Any application for an extension shall
demonstrate that a significant financial hardship to such group would
result from such implementation.
(i)(1) If an insurer issues coverage to an association group
(including chambers of commerce), as defined in subparagraph (K) of
paragraph one of subsection (c) of section four thousand two hundred
thirty-five of this chapter, the insurer must issue the same coverage to
individual proprietors which purchase coverage through the association
group as the insurer issues to groups which purchase coverage through
the association group; provided, however, that an insurer which, on the
effective date of this subsection, is issuing coverage to individual
proprietors not connected with an association group, may continue to
issue such coverage provided that the coverage is otherwise in
accordance with this subsection and all other applicable provisions of
law.
(2) For coverage purchased pursuant to this subsection, through
December thirty-first, two thousand thirteen, individual proprietors
shall be classified in their own community rating category, provided
however, up to and including December thirty-first, two thousand
thirteen, the premium rate established for individual proprietors
purchased pursuant to paragraph one of this subsection shall not be
greater than one hundred fifteen percent of the rate established for the
same coverage issued to groups. Coverage purchased or renewed pursuant
to this subsection on or after January first, two thousand fourteen
shall be classified in the individual rating category.
(3) An insurer may require members of the association purchasing
health insurance to verify that all employees electing health insurance
are legitimate employees of the employers, as documented on New York
state tax form NYS-45-ATT-MN or comparable documentation. In order to be
eligible to purchase health insurance pursuant to this subsection and
obtain the same group insurance products as are offered to groups, a
sole employee of a corporation or a sole proprietor of an unincorporated
business or entity must (A) work at least twenty hours per week, (B) if
purchasing the coverage through an association group, be a member of the
association for at least sixty days prior to the effective date of the
insurance policy, and (C) present a copy of the following documentation
to the insurer or health plan administrator on an annual basis:
(i) NYS tax form 45-ATT, or comparable documentation of active
employee status;
(ii) for an incorporated business, the prior year's federal income tax
Schedule C for an incorporated business subject to Subchapter S with a
sole employee, federal income tax Schedule E for other incorporated
businesses with a sole employee, a W-2 annual wage statement, or federal
tax form 1099 with federal income tax Schedule F; or
(iii) for a business in business for less than one year, a cancelled
business check, a certificate of doing business, or appropriate tax
documentation; and
(iv) such other documentation as may be reasonably required by the
insurer as approved by the superintendent to verify eligibility of an
individual to purchase health insurance pursuant to this subsection.
(4) Notwithstanding the provisions of item (I) of clause (i) of
subparagraph (K) of paragraph one of subsection (c) of section four
thousand two hundred thirty-five of this chapter, for the purposes of
this section, an association group shall include chambers of commerce
with less than two hundred members and which are 501C3 or 501C6
organizations.
* NB There are 2 § 3231's

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