State RegulationsNY specificDifficulty 2/5
A New York insurer wants to stop renewing a small employer's group medical policy because the group's employees filed substantial claims last year. Under Reg 145, may it refuse renewal?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Reg 145 (11 NYCRR Part 360.2(e)), small employer coverage is guaranteed renewable: the insurer must renew the coverage at the option of the small employer so long as premiums are paid. Claims experience and the health status of the employees are not permitted grounds for refusing renewal, though the duty to renew does not by itself freeze the group's premium.
Why the other options are wrong
- A) Adverse claims experience is not a permitted ground to refuse renewal of small employer coverage.
- C) Advance notice cannot convert an impermissible ground for refusal into a permissible one; the ground itself is invalid.
- D) The renewal obligation does not freeze premiums; rating is a separate question from the duty to renew.
Memory hook
Premiums paid, renewal owed: claims cannot close a small group policy.