State RegulationsNY specificDifficulty 2/5
An insurer's underwriting department manager writes to a policyholder agreeing to broaden a benefit under her individual accident and health policy, but the change is never approved by an executive officer of the insurer, and no endorsement is attached to the policy. Under N.Y. Ins. Law §3216(d)(1)(A), the change is:
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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(d)(1)(A), no change in an individual accident and health policy is valid unless it is approved by an executive officer of the insurer and that approval is endorsed on or attached to the policy. A letter from an underwriting department manager, without executive-officer approval and without an endorsement, is therefore ineffective. The rule protects policyholders from informal modifications while ensuring that only the insurer's officer level can alter the bargain.
Why the other options are wrong
- A) Being an insurer employee is not enough; the statute requires approval by an executive officer of the insurer.
- C) The policyholder's reliance cannot validate a change that was never approved by an executive officer and endorsed on the policy.
- D) Paying a later premium does not transform an informal letter into a valid change to the policy.
Memory hook
Policy change = executive officer's approval + endorsement on the policy.