NY| Circular Letter No. 1 (2025) from the New York Department of Financial Services provides guidance on government benefit offset provisions in disability income insurance policies, including: Social Security Disability Income, Workers’ Compensation, Employers’ Liability, and Occupational Disease Law Benefit Offset Provisions in Individual, Group, and Blanket Disability Income Insurance Policies . It clarifies that insurers cannot limit or exclude benefits based on estimates of potential government benefits, but only on benefits actually received by the insured. The letter also outlines additional standards for individual disability income insurance policies, including optional provisions for overinsurance situations and social insurance substitute coverage.
Key Points:
- Insurers are not permitted to reduce benefits based on estimated government benefits, only on those actually received by the insured.
- Individual disability income insurance policies may include optional provisions for overinsurance situations and social insurance substitute coverage.
- Mandatory requirements for insureds to apply for or appeal government benefits are not allowed, except in specific cases of individual social insurance substitute disability income coverage.