Section 3442. Credit card, debit card, or checking account group policies

(a) For purposes of this section, unless the context requires otherwise:
    (1) "Account group member" means a person:
    (A) to whom a credit card account or debit card account is issued by a
  sponsor or who has agreed with the sponsor to  pay  obligations  arising
  from the use of a credit card or debit card issued to another person; or
    (B) who may access by check an account maintained by the sponsor.
    (2)   "Account   group   policy"   means  a  group  policy,  including
  certificates issued to the group members, where the group policyholders,
  and each additional group policyholder, if any, is:
    (A) a sponsor and the policy's group members  are  its  account  group
  members  or other authorized users of the account group member's payment
  medium; or
    (B) an interchange organization, or the trustee or trustees of a trust
  established,  or  participated  in,   by   one   or   more   interchange
  organizations or one or more sponsors who are members of the interchange
  organization,  where the policy's group members are the authorized users
  of the payment medium administered by the interchange organization or by
  its member sponsors.
    (3) "Authorized user"  means  a  group  member  or  any  other  person
  designated  by  the  group  member  as an authorized user of the account
  group member's payment medium.
    (4) "Beneficiary" means an authorized user of a payment medium or  any
  other  person  who  is a recipient of the benefits of the payment medium
  who is designated as  an  additional  insured  under  an  account  group
  policy.
    (5)  "Certificate"  or  "certificate  of  insurance" means any policy,
  contract, or other  evidence  of  insurance,  or  rider  or  endorsement
  thereto, issued to a group member under an account group policy.
    (6) "Check" means a check, draft, credit union share draft, negotiable
  order  of  withdrawal,  or other written, electronic or telephonic order
  but does not include a traveler's check.
    (7)  "Commercial   creditor"   means   a   corporation,   partnership,
  association or other organization that, as part of its vocation, extends
  credit by making loans, issuing credit cards, or otherwise, including:
    (A) a bank, trust company, savings bank, savings and loan association,
  or  credit  union,  as  those  terms  are  defined in section two of the
  banking law;
    (B) a national bank, federal savings bank, federal  savings  and  loan
  association,  or  federal  credit  union,  as those terms are defined in
  title twelve of the United States Code;
    (C) a foreign banking corporation licensed to  maintain  a  branch  or
  agency in New York under article five of the banking law or title twelve
  of the United States Code;
    (D)  a creditor, as defined in section one thousand six hundred two of
  title fifteen of the United States Code;
    (E) an issuer  of  a  credit  card,  within  the  meaning  of  article
  twenty-nine-A of the general business law;
    (F)  a  transmitter of money, within the meaning of article thirteen-A
  of the banking law; or
    (G) a retailer.
    (8) "Conditional renewal" means change of limits, change  in  type  of
  coverage,  reduction or elimination of coverage, increased deductible or
  addition of exclusion, or increased premiums in excess  of  ten  percent
  (exclusive  of  any  premium increase generated as a result of increased
  exposure units or  as  a  result  of  experience  rating,  loss  rating,
  retrospective rating, or audit).

    (9)  "Credit  card"  means  a  payment medium that takes the form of a
  credit card,  credit  plate,  charge  plate,  courtesy  card,  or  other
  identification  card  or device, issued by a sponsor to an account group
  member (or a check drawn by an authorized user against the  credit  card
  account),  which an authorized user may use to obtain a loan, credit, or
  cash advance, or to purchase, hire, rent or lease property or services.
    (10) "Debit card" means a payment medium that  takes  the  form  of  a
  card, plate, or other identification card or device, issued by an issuer
  to  an  account  group  member  who  is  an  owner  of a deposit account
  maintained by the issuer, which an  authorized  user  drawing  upon  the
  deposit  account  may  use  to purchase, hire, rent or lease property or
  services. "Debit card" does not include a credit card or a check.
    (11) "Group member" means an account group member who is insured under
  the account group policy.
    (12) "Interchange organization" means  a  person  that  administers  a
  payment medium for the benefit of one or more sponsors and the sponsor's
  account group members.
    (13) "Motor vehicle" means a motor vehicle as defined in section three
  hundred  eleven of the vehicle and traffic law, whether or not used on a
  public highway, and includes a snowmobile  as  defined  in  section  two
  thousand two hundred twenty-one of the vehicle and traffic law.
    (14) "Payment medium" means a credit card, debit card or check.
    (15)   "Person"  includes  an  individual,  corporation,  partnership,
  association, or other legal entity.
    (16) "Sponsor" means:
    (A) a commercial creditor that issues a credit card or debit  card  to
  its account group members;
    (B)  a  commercial  creditor  that  maintains  an account which may be
  accessed by check by the commercial creditor's account group members; or
    (C) the trustee or trustees of a trust  established,  or  participated
  in,  by  one  or  more  commercial  creditors  for  the  benefit  of the
  commercial creditor's account group members.
    (b) An account group policy or certificate may be issued or issued for
  delivery in this state only in compliance with the  provisions  of  this
  section.
    (c)  Coverage  under  an  account  group  policy  shall extend only to
  beneficiaries and shall be associated with the direct use or  employment
  of  a  payment  medium by an authorized user to purchase, hire, lease or
  rent property or services.
    (d) An account group policy may  provide  only  one  or  more  of  the
  following   property/casualty   insurance   coverages,  subject  to  the
  following limitations:
    (1) Loss of or damage to personal property, other than loss of use  or
  loss resulting from a defect in materials or workmanship, where:
    (A) the article of personal property is owned by;
    (i) an authorized user; or
    (ii)  a  beneficiary  other  than  an  authorized user, if coverage is
  provided under the  account  group  policy  to  the  beneficiary  as  an
  additional insured;
    (B)  the  article  of personal property is purchased using the account
  group member's payment medium;
    (C) the amount of coverage is limited to the amount charged,  debited,
  or drawn, unless the insurer repairs or replaces the article of personal
  property, but in no event shall the coverage exceed ten thousand dollars
  per article and fifty thousand dollars in the aggregate per group member
  per policy year;
    (D)  the period of coverage for each article of personal property does
  not exceed ninety days from date of purchase; and

    (E) the coverage is  excess  over  any  other  valid  and  collectible
  insurance  covering  the  same article of personal property, except that
  the coverage need not be excess over insurance issued pursuant  to  this
  paragraph.
    (2)  Obligation  to  a  person  engaged  in the business of renting or
  leasing motor vehicles, for loss of or damage to a motor vehicle  rented
  or leased from that person, where:
    (A) the obligation is incurred by:
    (i) an authorized user; or
    (ii)  another  person  driving  the  motor vehicle with the authorized
  user's permission,  if  coverage  under  the  account  group  policy  is
  provided to such beneficiary as an additional insured;
    (B)  the  rental or lease of the motor vehicle is paid wholly by means
  of the account group member's payment medium;
    (C) the period of the rental or lease coverage does not exceed:
    (i) forty-five consecutive days where the payment medium used for  the
  rental or lease was a credit card issued to an account group member that
  is an employee of a person that has contracted with a sponsor to provide
  credit cards to the person's employees primarily for business use; or
    (ii) thirty-one consecutive days for all other authorized users;
    (D)  the  coverage  is  excess  over  any  other valid and collectible
  insurance covering the same motor vehicle, except that the coverage  may
  be primary for motor vehicle rentals or leases:
    (i)  when  the  motor  vehicle  is used outside the United States, its
  territories and possessions; or
    (ii) where the payment medium used for  the  rental  or  lease  was  a
  credit  card  issued to an account group member that is an employee of a
  person that has contracted with a sponsor to provide credit cards to the
  person's employees primarily for business use; or
    (E) the motor vehicle is rented or leased without a driver.
    (3) Loss of, damage to, or loss of use of baggage  and  its  contents,
  where:
    (A) (i) the authorized user owns or uses the baggage and its contents,
  and  the  loss,  damage,  or  loss  of use occurs in connection with the
  authorized user being in transit; or
    (ii) a beneficiary other than an authorized  user  owns  or  uses  the
  baggage  and  its  contents, and the loss, damage, or loss of use occurs
  while in connection with that beneficiary being in transit, if  coverage
  under  the  policy  is  provided  in  regard  to  the  beneficiary as an
  additional insured;
    (B) the account group  member's  payment  medium  is  used  to  obtain
  transportation  or  accommodations  for the owner of the baggage and its
  contents, in connection with that owner being in transit; and
    (C) the amount of coverage does not exceed two  thousand  dollars  per
  bag,  including  contents, and ten thousand dollars in the aggregate for
  all insureds per trip.
    (4) Loss of, damage to, or loss of use of personal property  resulting
  from a defect in materials or workmanship in that property, where:
    (A) the article of personal property is owned by:
    (i) an authorized user; or
    (ii)  a  beneficiary  other  than  an  authorized user, if coverage is
  provided under the  account  group  policy  to  the  beneficiary  as  an
  additional insured;
    (B)  the  article  of  personal  property is purchased by means of the
  account group member's payment medium;
    (C) the amount of coverage is limited to the amount charged,  debited,
  or drawn, but in no event shall exceed ten thousand dollars; and

    (D) the article of personal property has one or more warranties issued
  by a manufacturer, distributor or seller.
    (5)  Loss of, damage to, or loss of use of personal property occurring
  in connection with the use of rented or leased motor vehicles where:
    (A) the article of personal property is owned by:
    (i) an authorized user; or
    (ii) a beneficiary other  than  an  authorized  user  if  coverage  is
  provided  under  the  account  group  policy  to  the  beneficiary as an
  additional insured;
    (B) the rental or lease of the motor vehicle is  paid  for  wholly  by
  means of the account group member's payment medium;
    (C) the period of coverage does not exceed the lesser of:
    (i) the rental or lease period; or
    (ii) forty-five consecutive days where the payment medium used for the
  rental or lease was a credit card issued to an account group member that
  is  an  employee  of  an  entity  that  has contracted with a sponsor to
  provide credit cards to the entity's employees  primarily  for  business
  use; or thirty-one consecutive days for all other authorized users;
    (D) the motor vehicle is rented or leased without a driver; and
    (E) the amount of the coverage does not exceed five thousand dollars.
    (6)  Losses  incurred  in  connection  with  the unauthorized use of a
  payment medium, where:
    (A) one or more individuals  are  designated  authorized  users  of  a
  payment  medium by virtue of their status as employees of a group member
  in accordance with procedures  established  by  such  group  member  for
  authorized use of the payment medium;
    (B)  the  group  member  that employs such authorized users has agreed
  with another group member to pay obligations arising  from  the  use  of
  such payment medium by such authorized users;
    (C)  an  authorized  user uses such payment medium in a manner that is
  unauthorized by the group member that employs the authorized user;
    (D) the obligation of the group member  that  employs  the  authorized
  users to such other group member, pursuant to the agreement described in
  subparagraph  (B)  of  this  paragraph for a loss incurred in connection
  with use in an unauthorized manner, is  discharged  by  payment  of  the
  insurance benefit to such other group member;
    (E) the amount of coverage shall be limited to the amount of the loss,
  but in no event shall exceed fifteen thousand dollars; and
    (F) for purposes of this paragraph only, the term "group member" shall
  include (i) those entities specified in subparagraphs (A) through (F) of
  paragraph  seven  of  subsection  (a) of this section which are insureds
  under the insurance described in subparagraph (D) of this paragraph, and
  (ii) employers of account group members who  are  designated  authorized
  users of a payment medium by virtue of their employee status.
    (7)  Loss  resulting  from  an  inability  to use a ticket to an event
  where:
    (A) the ticket was purchased with the account group  member's  payment
  medium;
    (B)  the  event  does  not fully reimburse the person for the expenses
  disbursed or to be disbursed for the  ticket,  including  any  fees,  or
  provide a ticket of equal value or a rain check;
    (C)  the amount of coverage is limited to the amount charged, debited,
  or drawn, but shall not exceed seven hundred fifty dollars  per  ticket;
  and
    (D) the coverage is excess over any other reimbursement.
    (8) Loss due to cancellation of a catered affair where:
    (A)  the  expenses  were  paid  by means of the account group member's
  payment medium;

    (B) the amount of coverage is limited to the amount charged,  debited,
  or  drawn,  but  shall  not exceed thirty thousand dollars in any twelve
  month period; and
    (C) the coverage is excess over any other reimbursement.
    (9)  Loss of tuition and other educational expenses due to a student's
  dismissal or withdrawal from an educational institution where:
    (A) expenses were paid by means of the account group member's  payment
  medium;
    (B)  the amount of coverage is limited to the amount charged, debited,
  or drawn, but shall not exceed sixty  thousand  dollars  in  any  twelve
  month period; and
    (C) the coverage is excess over any other reimbursement.
    (10)  Loss  resulting from the cancellation or interruption of a trip,
  where:
    (A) coverage is limited to a specific trip;
    (B) the trip was paid by means of the account group  member's  payment
  medium;
    (C)  the amount of coverage is limited to the amount charged, debited,
  or drawn, but shall not exceed fifteen thousand dollars per trip; and
    (D) the coverage is excess over any other reimbursement.
    (11) Loss of or damage to personal property, where:
    (A) (i) the authorized user owns or uses the  personal  property,  and
  the loss or damage occurs in connection with a specific trip; or
    (ii)  a  beneficiary  other  than  an authorized user owns or uses the
  personal property, and the loss or damage occurs in  connection  with  a
  specific trip, if coverage is provided under the account group policy to
  the beneficiary as an additional insured;
    (B)  the  trip was paid by means of the account group member's payment
  medium;
    (C) the amount of coverage does not exceed one  thousand  dollars  per
  article of personal property, and five thousand dollars in the aggregate
  for all insureds per trip; and
    (D)  the  coverage  is  excess  over  any  other valid and collectible
  insurance covering the same article of personal property.
    (12) Coverages which,  in  the  opinion  of  the  superintendent,  are
  determined to be substantially similar to one of the foregoing coverages
  specified  in  paragraphs one through eleven of this subsection, or such
  other coverages that the superintendent determines are limited in scope,
  and not  duplicative  or  a  substitute  for  other  more  comprehensive
  coverages, and thereupon for purposes of this section shall be deemed to
  be    permissible   pursuant   to   regulations   promulgated   by   the
  superintendent.
    (e) (1) An account group policy  shall  not  cover  a  motor  vehicle,
  except  in  regard  to coverage under paragraph two of subsection (c) of
  this section.
    (2) An account group policy shall not be considered  a  motor  vehicle
  policy for purposes of this chapter.
    (f)  The premium for the account group policy, including certificates,
  may be paid by the group policyholder from funds contributed:
    (1) wholly by the group policyholder;
    (2) wholly by the group members; or
    (3) jointly by the group policyholder and group members.
    (g)  (1)  Any  policy  dividend,  retrospective  premium  credit,   or
  retrospective  premium  refund  in respect of premiums paid by the group
  policyholder may:
    (A) be applied  to  reduce  the  premium  contribution  of  the  group
  policyholder,  but  not in excess of the proportion to its contribution;
  or

    (B) be retained by the group policyholder.
    (2)   Any   policy   dividend,   retrospective   premium   credit,  or
  retrospective premium refund not distributed under paragraph one of this
  subsection shall be:
    (A)  applied  to  reduce  future  premiums  and,  accordingly,  future
  contributions, of existing or future group members, or both; or
    (B)  paid  or  refunded to those group members insured on the date the
  payment or refund is made to the group policyholder, if  distributed  by
  the  group  policyholder,  or  on  the  date  of mailing, if distributed
  directly by the insurer, subject to the following requirements:
    (i) the insurer shall be responsible for determining the allocation of
  the payment or refund to the group members;
    (ii) if the group policyholder distributes the payment or refund,  the
  insurer  shall be responsible for audit to ascertain that the payment or
  refund is actually made in accordance with the allocation procedure; and
    (iii) if the group policyholder fails to make the payment  or  refund,
  the  insurer shall make the payment or refund directly or use the method
  provided in subparagraph (A) of this paragraph.
    (3) Notwithstanding paragraphs one and two of this  subsection,  if  a
  dividend  accrues  upon  termination  of coverage under an account group
  policy, the premium for which was paid out of funds contributed by group
  members specifically for the coverage, the dividend  shall  be  paid  or
  refunded  by  the group policyholder to the group members insured on the
  date the payment or refund is made to the  group  policyholder,  net  of
  reasonable  expenses  incurred  by  the  group policyholder in paying or
  refunding the dividend to such group members.
    (4) For the purposes of this subsection, "dividend" means a return  by
  an insurer to a group policyholder of excess premiums paid by that group
  policyholder   in   light   of   favorable  loss  experience,  including
  retrospective premium credits or retrospective premium refunds. The term
  "dividend" does not include reimbursements or fees received by  a  group
  policyholder  in  connection  with the operation or administration of an
  account group policy, including administrative reimbursements, fees  for
  services  provided  by  the group policyholder, or transactional service
  fees.
    (h) The insurer must treat in like manner all eligible  account  group
  members of the same class and account status.
    (i) The group shall consist of at least one thousand members.
    (j)  An  account group policy or certificate shall not be eligible for
  placement  by  an  excess  line  broker  licensed  pursuant  to  article
  twenty-one of this chapter.
    (k)  Coverage  provided  under  an account group policy or certificate
  issued pursuant to paragraph four of  subsection  (d)  of  this  section
  shall  be  deemed  miscellaneous  property  insurance,  as enumerated in
  paragraph five of subsection (a) of section  one  thousand  one  hundred
  thirteen of this chapter.
    (l)  (1)  The insurer shall be responsible for the mailing or delivery
  of a certificate of insurance to each group  member  insured  under  the
  account  group  policy.  The  insurer  shall also be responsible for the
  mailing or delivery to each group member of an  amended  certificate  of
  insurance, or endorsement to the certificate, whenever there is a change
  of   limits;  change  in  type  of  coverage;  addition,  reduction,  or
  elimination of coverage; or addition of  exclusion,  under  the  account
  group policy or certificate.
    (2)  The certificate shall contain in substance all material terms and
  conditions of coverage afforded to the group member, unless the  account
  group policy is incorporated by reference and a copy of the group policy
  accompanies the certificate.

    (3)  If  coverage  afforded  to  the  group  member is excess of other
  applicable insurance coverage, the certificate shall  contain  a  notice
  advising  the  group  member  that,  if  the  member has other insurance
  coverage, specified coverages under the account  group  policy  will  be
  excess over the other insurance.
    (m)  A  group policyholder shall comply with the provisions of section
  two thousand one hundred twenty-two of this chapter, in the same  manner
  as  an  agent or broker, in any advertisement, sign, pamphlet, circular,
  card, or other  public  announcement  referring  to  coverage  under  an
  account group policy or certificate.
    (n)  An  account  group  policy or certificate shall not be subject to
  section  three  thousand  four  hundred  twenty-five  or  section  three
  thousand   four  hundred  twenty-six  of  this  article.  The  following
  requirements shall apply in regard to termination of coverage:
    (1) (A) An account group policy or certificate may be cancelled by  an
  insurer  only if cancellation is based on one or more of the reasons set
  forth in subparagraphs (A) through (D) or (F) through (H)  of  paragraph
  one  of subsection (c) of section three thousand four hundred twenty-six
  of this article; provided, however, that an act or omission by  a  group
  member   which  would  constitute  the  basis  for  cancellation  of  an
  individual certificate shall not constitute the basis  for  cancellation
  of the account group policy.
    (B)  Where the premium is derived wholly from funds contributed by the
  group policyholder, an individual certificate may be  cancelled  by  the
  insurer  only if cancellation is based on one or more of the reasons set
  forth in subparagraph (B), (C) or (H) of paragraph one of subsection (c)
  of section three thousand four hundred twenty-six of this article.
    (2)  (A)  An  insurer's  cancellation  of  an  account  group  policy,
  including  all  certificates,  shall  not become effective until fifteen
  days after the insurer mails or delivers written notice of  cancellation
  to the group policyholder at the mailing address shown in the policy.
    (i) Where all or part of the premium is derived from funds contributed
  by  a  group  member  specifically  for  the coverage, written notice of
  cancellation of the  account  group  policy  shall  also  be  mailed  or
  delivered  by  the  insurer  to  the  group member at the group member's
  mailing address.
    (ii) Where none of the premium is derived from funds contributed by  a
  group member specifically for the coverage, the group policyholder shall
  mail  or  deliver  written notice to the group member advising the group
  member of the cancellation of the account group policy and the effective
  date of cancellation. The written notice shall be mailed or delivered by
  the group policyholder within ninety  days  after  receiving  notice  of
  cancellation from the insurer.
    (B)  An  insurer's cancellation of an individual certificate shall not
  become effective until fifteen days after the insurer mails or  delivers
  written notice of cancellation to the group member at the group member's
  mailing  address  and  to  the group policyholder at the mailing address
  shown in the account group policy.
    (C) (i) A group policyholder  may  cancel  an  account  group  policy,
  including  all  certificates,  or  any  individual  certificate, for any
  reason upon thirty days written notice to the  insurer  and  each  group
  member; and
    (ii)  The  group  policyholder shall mail or deliver written notice to
  each affected group member of the group policyholder's  cancellation  of
  the  account  group  policy  or  certificate  and  the effective date of
  cancellation. Such written notice shall be mailed or  delivered  to  the
  group  member's  mailing  address  at  least  thirty  days  prior to the
  effective date of the cancellation.

    (3) (A) Unless an account group policy provides for  a  longer  policy
  period, the policy and all certificates shall be issued or renewed for a
  one-year policy period.
    (B)  The  group  policyholder  shall  be entitled to renew the account
  group policy and all certificates upon timely  payment  of  the  premium
  billed to the group policyholder for the renewal, unless:
    (i)  the  insurer  mails or delivers to the group policyholder and all
  group members written notice of nonrenewal, or conditional renewal; and
    (ii) the written notice is mailed or delivered at  least  thirty,  but
  not  more  than  one  hundred  twenty  days prior to the expiration date
  specified  in  the  policy  or,  if  no  date  is  specified,  the  next
  anniversary date of the policy.
    (C)  Notwithstanding  subparagraph  (A)  of this paragraph, an account
  group policy insuring an experimental program that is test marketed  for
  a  period  of  one  hundred  twenty  days or less may be issued for that
  policy period. The provisions of  subparagraph  (B)  of  this  paragraph
  shall  not  apply  if  the group members were previously notified of the
  expiration date of the account group policy.
    (4) (A) Where the account group policy  is  nonrenewed  by  the  group
  policyholder,  the  group  policyholder  shall  mail  or deliver written
  notice to each group member advising the group member of  nonrenewal  of
  the  account  group  policy  and  the  effective date of nonrenewal. The
  written notice shall be mailed or delivered by the group policyholder at
  least thirty days prior to the nonrenewal.
    (B) The provisions of subparagraph (A) of  this  paragraph  shall  not
  apply  in  the  case  of  a  sponsor's  nonrenewal in connection with an
  account group policy insuring an experimental program test marketed  for
  a  period  of one hundred twenty days or less, if the group members were
  previously notified of the expiration date of the account group policy.
    (5) Every notice of cancellation, nonrenewal, or  conditional  renewal
  shall   contain   the  specific  reason  or  reasons  for  cancellation,
  nonrenewal, or conditional renewal.
    (6) (A) An insurer shall not be required under this subsection to give
  notice to a group member if the insurer has been advised by  either  the
  group   policyholder  or  another  insurer  that  substantially  similar
  coverage has been obtained from  the  other  insurer  without  lapse  of
  coverage.
    (B)  A  group policyholder shall not be required under this subsection
  to give notice to a group member if substantially similar  coverage  has
  been obtained from another insurer without lapse of coverage.
    (7)  (A)  If, prior to the effective date of cancellation, nonrenewal,
  or conditional renewal of the account group policy,  or  a  certificate,
  whether  initiated  by  the  insurer, group policyholder or by the group
  member in regard to the group member's  certificate,  coverage  attaches
  pursuant  to the terms of an account group policy providing insurance of
  one or more of the types enumerated in this section, then  the  coverage
  shall be effective until expiration of the applicable period of coverage
  provided  in  the account group policy notwithstanding the cancellation,
  nonrenewal or conditional nonrenewal of the account group policy.
    (B) Notwithstanding subparagraph (A) of this paragraph, an insurer may
  terminate coverage under an individual certificate on the effective date
  of cancellation, if the certificate is cancelled in accordance with  the
  provisions of subparagraph (B) of paragraph one of this subsection.
    (o)  The  superintendent  may,  pursuant  to  regulation,  adjust  the
  monetary limitations set forth in subsection (d)  of  this  section  for
  inflation.