State RegulationsNY specificDifficulty 1/5
When an insurer pays a claim under an individual accident and health policy, one premium is then due and unpaid. Under the unpaid premium provision required by N.Y. Ins. Law §3216(d)(2)(G), what may the insurer do?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §3216(d)(2)(G), upon the payment of a claim under an individual accident and health policy, any premium then due and unpaid, or covered by any note or written order, may be deducted from the claim payment. The insurer satisfies the overdue premium out of the benefits it is already paying rather than withholding the claim or taking separate collection action.
Why the other options are wrong
- B) The claim is not held hostage to premium payment; the insurer pays the claim and simply deducts the amount of the due and unpaid premium.
- C) The provision does not authorize forfeiting the claim; the remedy is deduction from the payment being made.
- D) Separate collection is unnecessary; the provision permits the insurer to deduct the unpaid premium directly from the claim payment.
Memory hook
Unpaid premium when a claim is paid? Deduct it from the check.