This story is reprinted with permission from FC&&S Legal, the industry's only comprehensive digital resource designed for insurance coverage law professionals. Visit the website to subscribe.

The New York State Department of Financial Services (DFS) has fined QBE Insurance Corp., an insurer that offers blanket accident-only coverage to groups in New York, $750,000 for violations of New York Insurance Law.

The DFS said in a statement that it found that QBE had unlawfully issued accident-only policies to institutions of higher education in New York to cover their enrolled students.

The company already has ceased sales of these products to colleges and universities.

“DFS will continue to vigorously enforce the insurance law and take action to protect all New Yorkers, including students attending college and other institutions of higher education, to ensure that they are receiving the insurance coverage they deserve in compliance with federal and state law,” said the DFS superintendent, Maria T. Vullo, in a statement. “DFS appreciates QBE's cooperation in resolving this matter and taking remedial steps to correct these violations of law.”

Accident-only coverage

The DFS investigation found that QBE unlawfully sold the accident-only coverage for the 2016–17 school year to 25 institutions of higher education, covering 99,937 students. The insurer also failed to issue certificates setting forth the essential features of the insurance coverage to each of the 99,937 students covered by the policies, according to the DFS.

A statutory change in New York law in 2014 limits policies issued to institutions of higher education to hospital and medical expense insurance policies that are compliant with the Affordable Care Act (ACA) and meet other specified requirements; policies that provide limited scope dental or vision benefits; and policies that provide coverage only for intercollegiate sports injuries. DFS also found that the company's blanket accident-only insurance policy forms had not been updated to comply with changes to New York Insurance Law unrelated to the ACA. These non-compliant forms also were issued to permissible blanket groups other than institutions of higher education.

QBE is headquartered in Pennsylvania and licensed as a property and casualty insurance company in New York.

Steven A. Meyerowitz, Esq., is the director of FC&S Legal, the editor-in-chief of the Insurance Coverage Law Report, and the founder and president of Meyerowitz Communications Inc. Email him at smeyerowitz@meyerowitzcommunications.com.

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QBE Insurance fined $750,000 by N.Y. state for selling 'impermissible insurance' to colleges

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