CUOMO: ZURICH AMERICAN TO REFUND $4.56M TO POLICYHOLDERS

(The following is a reformatted version of a press release
issued by the Office of the Governor of New York and received
via electronic mail. The release was confirmed by the sender.) 
April 22, 2013 
GOVERNOR CUOMO ANNOUNCES ZURICH AMERICAN TO REFUND $4.56 MILLION
TO INSURANCE POLICYHOLDERS 
Insurer Spent Less Than Required 60 Percent Minimum on Claims 
Requirement is Designed to Protect Consumers and Hold Down
Premium Costs 
Governor Andrew M. Cuomo today announced that Zurich American
Insurance Company has agreed to refund $4.56 million to
policyholders of its New York statutory disability insurance
policies because the insurer failed to spend at least 60 percent
of total premiums on claims - as required under law. 
“Ensuring that insurers dedicate the required amount of money to
paying policyholder benefits - rather than overhead or windfall
profits - is critical to protecting consumers and keeping
premium costs down,” Governor Cuomo said. “Today’s action
continues the State’s work to hold insurers accountable to
ratepayers and ensure that New York residents and businesses are
not being overcharged.” 
The money is being refunded to approximately 73,000
policyholders through an agreement with the New York State
Department of Financial Services (DFS). In this case, most of
the policyholders are small businesses, which will benefit from
the lower costs. 
Zurich failed to meet the 60 percent minimum, called a minimum
loss ratio (MLR), because it overestimated the amount of money
it would spend to pay claims when the policies were priced by
the insurer. 
The refunds involve policies issued in calendar years 2009, 2010
and 2011. 
Benjamin M. Lawsky, Superintendent of Financial Services, said,
“We’ll continue to fight hard to make sure that insurers live up
to their commitments. These refunds will put money back in the
pockets of policyholders - many of which are New York small
businesses.” 
The insurer reported the lower than required MLR to the
Department of Financial Services and has submitted a corrective
action plan detailing how the refunds will be made. 
New York State statutory disability benefits insurance provides
temporary cash benefits paid to an eligible employee to replace,
in part, wages lost when the employee is disabled by an off-the-job illness or injury, and for disabilities arising from
pregnancy. 
Employers who hire employees in New York State are required to
provide statutory disability benefits insurance unless they are
exempt under New York State law. The coverage is part of
workers’ compensation insurance. 
Additional news available at www.governor.ny.gov
New York State | Executive Chamber | press.office@exec.ny.gov |
518.474.8418 
(bjh) NY 
#<873920.660640.3.4.1.0.76>#
 
 
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