State RegulationsNY specificDifficulty 3/5
After giving the required notice and plan, a New York insurer completely withdraws from the individual accident and health market in the state. What restriction does N.Y. Ins. Law §3216(g) impose on the insurer afterward?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §3216(g)(3) and (g)(4), an insurer that completely withdraws from the individual accident and health market must give 180 days' notice and a written plan, and it is then barred from re-entering that market for five years. The five-year bar prevents insurers from churning the market - leaving when claims run high and returning when profits look better. It is not a permanent ban on all New York business, only on the individual health market.
Why the other options are wrong
- A) The withdrawal penalty is a five-year bar on the individual health market, not a permanent ban on all lines of insurance.
- C) Claims activity does not create a duty to renew once the insurer has lawfully withdrawn after proper notice.
- D) Withdrawal does not trigger any conversion of individual policies into group coverage; the insureds receive notice and an orderly wind-down instead.
Memory hook
Bail out of the individual market, sit out five years.