State RegulationsNY specificDifficulty 2/5
A New York insurer drafts an individual health policy with a grace period shorter than the Insurance Law allows for its premium mode. If the policy is issued as drafted, what happens to the deficient provision?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §3216(d)(2)(I), provisions that conflict with New York statutes are amended to meet the minimum statutory standard. A grace clause below the level required by §3216(d)(1)(C), which sets seven days for weekly, ten days for monthly, and thirty-one days for other modes, is therefore treated as providing the statutory minimum, and the insured loses nothing by the drafting error.
Why the other options are wrong
- A) A short grace clause does not void the contract.
- B) The insured receives at least the statutory minimum grace, not none.
- C) Correction occurs by operation of law, not by the agent redrafting the policy.
Memory hook
A short grace clause is topped up to the legal minimum.