State RegulationsNY specificDifficulty 1/5
An individual accident and health policy delivered in New York contains a 'Conformity with State Statutes' provision. What is the effect of this provision?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under N.Y. Ins. Law §3216(d)(2)(I), a New York individual accident and health policy may include a conformity provision under which the policy is construed to conform to the statutes of the state in which the insured resides at the time it is issued, and any provision that conflicts with those statutes is amended to conform. The practical effect is that a defective clause cures itself: the policy stays in force and the offending language is read as the statute requires.
Why the other options are wrong
- B) The insurer gets no choice of governing law; the conformity provision fixes the applicable statutes by rule, not by company election.
- C) A conflicting provision is reformed, not fatal; the remainder of the contract continues in force.
- D) The clause points to state statutes, not federal standards; New York insurance contracts are governed by New York law.
Memory hook
Conformity cures: the clause bends so the policy does not break.