N.Y. Comp. Codes R. & Regs. tit. 11 § 46.7

Current through Register Vol. 46, No. 51, December 18, 2024

Section 46.7 - Provisions of policies and certificates of insurance

(a) No life insurance policy providing for unemployment lapse protection benefit shall be delivered or issued for delivery in this State, unless it contains a provision:

(1) that describes the types or causes of unemployment that are covered by the unemployment lapse protection benefit;

(2) that sets forth the conditions of eligibility for coverage. The conditions may include:

(i) a requirement that the insured be actively at work on a full-time basis on the date of application or issue, or prior to the date of application or issue for a minimum period not exceeding 12 months. The term full-time shall be defined in the policy to mean a minimum number of hours no greater than 30 hours per week;

(ii) a requirement that the insured has not received or been eligible to receive a State or Federal unemployment benefit for a minimum period of time, not exceeding 12 months, prior to the application date or the issue date; and

(iii) a requirement that the insured be an eligible age on the date of application or issue, provided that the maximum age shall not be less than 65;

(3) indicating when, after commencement of involuntary unemployment, the life insurance coverage first becomes protected against lapse and, if applicable, that required premiums must be paid by the insured until that time;

(4) that describes where the notice of claim forms can be obtained or, if no claim form is required, the information required for such notice of claim, together with the address where such notice must be delivered;

(5) that specifies any documents or other information needed to serve as proof of unemployment;

(6) that describes the conditions or circumstances that must occur to make a claim under the policy for the unemployment lapse protection benefit. The conditions or circumstances may include the following:

(i) a requirement that the insured actually receive or be eligible to receive State or Federal unemployment benefits for a minimum period specified in the form;

(ii) a requirement regarding the type or cause of the insured's unemployment to be a covered unemployment as set forth in the form;

(iii) a requirement that the life insurance coverage be in effect a minimum period of time before any payments are payable; provided that, if the minimum period of time exceeds one year, no identifiable charge for the unemployment lapse protection benefit may be collected until the expiry of this period;

(iv) a requirement that a notice of claim and proof of unemployment shall be provided to the insurer within a reasonable time after commencement of a period of unemployment; and

(v) a requirement that the insured be unemployed for a minimum specified period not to exceed 180 days.

(7) that describes the coverage to which the unemployment lapse protection benefit applies as well as the terms and conditions applicable to the benefit with regard to coverage in force prior to termination of employment. The description shall identify the specific benefits or coverages (e.g., basic life, supplemental life, accidental death and dismemberment, guaranteed insurance, waiver of premium for disability benefit, some specified portion of or all dependent coverage, etc.) to which the unemployment lapse protection benefit applies, if the unemployment lapse protection benefit does not apply to all coverages provided under the policy; and

(8) that describes each basis for excluding or denying a claim for an unemployment lapse protection benefit. Some of the bases for excluding or denying a claim for an unemployment lapse protection benefit are:

(i) voluntary separation from employment, without good cause (as such term is defined in section 593 of the Labor Law);

(ii) retirement;

(iii) loss of income due to disability caused by accident, sickness, disease or pregnancy;

(iv) loss of income due to termination of employment as the result of willful misconduct (as defined in the form), criminal misconduct or unlawful behavior as determined in judicial or administrative proceedings;

(v) strikes, lockouts, illegal walkouts, and industrial controversy (as such term is defined in section 592[1] of the Labor Law); and

(vi) normal or routine scheduled layoff or plant closing where the employee is expected to be rehired.

(b) Disclosure provisions.

(1) If eligibility for benefits is dependent on being eligible for a State or Federal unemployment benefit, as appropriate, the policy must include a statement prominently displayed setting forth the following or its equivalent:

Your eligibility for this coverage is dependent on your being eligible to receive State or Federal [as appropriate] unemployment benefits. A change in your employment may affect your eligibility for benefits. If you have any questions you should contact the insurance company.

(2) The policy and application therefor shall include prominent disclosure of the extent to which the receipt of the unemployment lapse protection benefit may be considered taxable income.

(3) The application shall include a question or statement corresponding to each unemployment lapse protection benefit eligibility condition.

(c) A policy may impose conditions under which an insured becomes re-eligible for the maximum unemployment lapse protection benefit after a period of receiving benefits. If re-eligibility conditions are required for full benefits for a subsequent period of unemployment, the conditions may not be more stringent than the initial eligibility conditions (with no more than a 12-month actively at work requirement). If an insured has not satisfied the re-eligibility requirement at the time of a subsequent unemployment, such unemployment shall be considered a continuation of the prior unemployment with no waiting period, and with a maximum benefit period equal to the unused portion of the maximum benefit period for the prior unemployment.

(d) If a policy does not provide for the insured to become re-eligible for the maximum amount of unemployment lapse protection benefit after a period of receiving unemployment lapse protection benefits, then the policy shall provide for notification that benefits have ended and include with the notice a statement of whether any portion of the unemployment lapse protection benefit would be payable for a subsequent period of unemployment. If such benefit remains, then the notice shall provide the amount of the remaining benefits and the premium required to maintain the unemployment lapse protection benefit.

(e) Termination provisions.

(1) The policy shall set forth termination provisions for the unemployment lapse protection benefit. Some of the bases for termination of the unemployment lapse protection benefit, or some portion thereof, may include:

(i) the coverage continues as paid-up insurance;

(ii) the policy is terminated or cancelled prior to termination of employment;

(iii) the insured reaches a maximum age specified in the policy, which shall not be less than age 66;

(iv) the policy is surrendered or lapses; and

(v) the specified maximum unemployment lapse protection benefit has been paid.

(2) For group life insurance, termination of the group policy shall not cause the insured's certificate to terminate while the unemployment lapse protection benefit or waiting period is in effect. The unemployment lapse protection benefit shall provide that payment of the death benefit is unaffected by the termination of the group policy when life insurance coverage is being continued under a valid unemployment lapse protection benefits claim that occurred prior to the termination of the group policy.

(f) For renewable term policies, if the renewal date occurs while the unemployment lapse protection benefit or waiting period is in effect, policy renewal shall be automatic.

(g) Coordination of benefits. If a policy providing for a waiver of premium for unemployment also provides a waiver of premium or charges for disability benefit or other disability-related benefits, the policy shall specify how the benefits interact.

(h) Coverage of other policies. A policy that includes a lapse protection benefit in the event of the unemployment of the insured may also provide for protection against lapse due to the insured's unemployment on insurance provided in either the same policy or in additional policies on the insured's dependents, provided that for protection of additional policies:

(1) the policies insuring the dependents are identified in the insured's policy either by actually being listed or by description; and

(2) the effect, if any, of each policy being protected against lapse on the premium charge for this benefit be set forth in the insured's policy.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 46.7