Insurance regulation in a nutshell

ARTICLE IV

Market Conduct Regulation

Section IV.1.Regulation of Insurance Policy Forms

Under most state insurance laws, policy forms are subject to prior regulatory approval in the state in which the policy is being sold. Thus, if an insurer wants to offer a form of insurance policy in all states, it must generally obtain 50 separate state insurance regulatory consents.
Under New York law, life, accident and health and annuity policy forms are subject to prior regulatory approval.⁵⁰ However, as an alternative, an insurer may submit a policy form for expedited approval provided that the submission includes a certification that the policy form complies with all applicable laws and regulations.⁵¹ The grounds for disapproval are broad. New York law provides that:
The superintendent may disapprove any life insurance policy form, or any form of annuity contract or group annuity certificate, or any form of funding agreement for delivery or issuance for delivery in this state, if its issuance would be prejudicial to the interests of policyholders or members or it contains provisions which are unjust, unfair or inequitable.⁵²
Under New York law, property/casualty policy forms are generally subject to approval – but the policy form will be deemed approved unless the state insurance regulator has objected to the policy form within 30 days of filing.⁵³ Again, the standard for disapproval is quite broad:
. . . no policy form shall be delivered or issued for delivery unless it has been filed with the superintendent and either he has approved it, or thirty days have elapsed and he has not disapproved it as misleading or violative of public policy.⁵⁴
Prior to the enactment of the federal Terrorism Risk Insurance Act of 2002,⁵⁵ the New York Superintendent of Insurance used this broad policy form approval standard and rejected the use of terrorism exclusions in property/casualty insurance policies as “misleading and/or against public policy.”⁵⁶