NYS to Prohibit Discretionary Clauses
The New York State Insurance Department has issued a proposed regulation prohibiting insurers from placing discretionary clauses in insurance policies. This regulation is hugely important to long term disability claimants. If this regulation becomes law, it would enable courts to fully scrutinize the claim determinations of insurance companies. Under the current law, a court will only overturn a claim denial if the insurance company's determination is an abuse of discretion. This regulation would constitute a turning point in this area of the law.
The Insurance Department is seeking comments from the public, which must be sent to the Department by May 5, 2010. We encourage everyone to contact the Department to express your support. Emails may be sent to dkullman@ins.state.ny.us
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