State RegulationsNY specificDifficulty 2/5
An insured gave the producer a signed written order for an overdue premium on an individual accident and health policy, and the insurer is now paying a claim under that policy. Under N.Y. Ins. Law §3216(d)(2)(G), the insurer may:
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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)(G), upon the payment of a claim, any premium then due and unpaid or covered by any note or written order may be deducted from the payment. A premium financed by the insured's signed written order is treated the same as an overdue premium, so the insurer applies it against the claim proceeds without any extra charge or objection window.
Why the other options are wrong
- A) The provision covers premiums covered by a note or written order as well as simply unpaid premiums; both are deductible.
- B) No 10-day objection period applies; the deduction is permitted as part of paying the claim.
- C) The deduction is limited to the premium amount; no service charge or penalty may be added under the provision.
Memory hook
Note, written order, or plain past-due: all deductible from claim proceeds.