Circular Letter No. 27 (2008) -- RE: Recognition in New York of Marriages Between Same-Sex Partners Legally Performed in Other Jurisdictions

I've been getting a lot of hits to the blog lately through Google searches for the "November 21, 2008 new york state insurance department opinion letter". Yesterday, that opinion letter was posted to the NYS Insurance Department's website and corresponds to the Department's Circular Letter No. 27 (2008), also dated November 21, 2008. Before you close this page thinking that the letters pertain only to health insurance, read the post to the end. First, the opinion letter:

Health Insurance for Same-Sex Spouses in Legal Out-of-State Marriages (November 21, 2008)

Question Presented:

Does the marriage of a same-sex couple legally performed in a jurisdiction outside New York confer the same rights to spousal health insurance coverage in New York as the marriage of an opposite-sex couple?

Answer:

Yes. Same-sex parties to marriages validly performed outside of New York must be treated as “spouses” for purposes of the New York Insurance Law, including all provisions governing health insurance.

Analysis:

* * * * *

Same sex couples legally marrying outside of New York and residing in the State give rise to the question of whether a same-sex spouse is considered a “spouse” for purposes of group insurance offered in accordance with the Insurance Law. The remainder of this opinion addresses that question.

Nothing in the Insurance Law – and indeed, nothing in any New York statute – either expressly authorizes or expressly prohibits this agency from interpreting the term “spouse” in the Insurance Law to include same-sex parties to marriages legally performed out of state. Moreover, while the Court of Appeals – the State’s highest court – held in Hernandez v. Robles, 7 N.Y.3d 338, 357, 366 (2006), that New York’s statutory law limits marriage to opposite-sex couples, and that this limitation is consistent with the New York Constitution, Hernandez did not address the question of whether New York should, as a matter of comity, recognize marriages of same-sex couples validly solemnized outside the State. Indeed, “the question of whether same-sex marriages valid in the jurisdiction where performed should be recognized in New York is an outgrowth of [Hernandez’s] determination that the law in New York does not compel the State to sanction same-sex marriage.” Godfrey v. Hevesi, 2007 N.Y. Misc. LEXIS 6589, at *5 (Sup. Ct. Albany Cty. Sept. 5, 2007).

While the Court of Appeals has yet to consider how marriages of same-sex couples performed outside this State should be treated in New York, see Beth R. v. Donna M., 19 Misc.3d 724, 853 N.Y.S.2d 501, 504 (Sup. Ct. N.Y. Cty. Feb. 25, 2008) (holding that “Hernandez did not address what effect New York should give to a validly entered out-of-state same-sex marriage”) (emphasis added), the Appellate Division, Fourth Department recently addressed the issue in Martinez v. Monroe Community College, 50 A.D.3d 189, 850 N.Y.S.2d 740 (4th Dep’t), lv. to appeal denied, 10 N.Y.3d 856 (2008).

* * * * *

Having found no “natural law” or “positive law” prohibition against the recognition by New York courts of a marriage between same-sex partners validly performed outside the State, the Fourth Department concluded that “[t]he Legislature may decide to prohibit the recognition of same-sex marriages solemnized abroad. Until it does so, however, such marriages are entitled to recognition in New York.” Id.; see also 2004 N.Y. Op. Atty. Gen. No. 1, 2004 WL 551537, at *12 (observing that “New York law presumptively requires that parties to [same-sex unions from other jurisdictions] must be treated as spouses for purposes of New York law.”); Legal Opinion of Office of the New York State Comptroller, dated October 8, 2004 (concluding that the New York Retirement System will recognize a Canadian marriage between same-sex partners in the same manner as a New York marriage between opposite-sex partners under the principle of comity).

* * * * *

To date, Martinez is the only Appellate Division decision to address the question of whether New York should recognize valid marriages of same-sex couples performed in jurisdictions outside of New York. The only other Appellate Division decision to consider recognition of out-of-state marriages between same-sex partners defers to Martinez. See Funderburke v. New York State Dep’t of Civil Servs., 49 A.D.3d 809 (2d Dep’t 2008) (vacating Supreme Court decision declining to order recognition of a marriage entered into in Canada between same-sex partners, citing Martinez, and dismissing appeal as moot).

In the absence of guidance from the Court of Appeals or the other Departments of the Appellate Division, Martinez is controlling precedent for all trial courts in the State. See, e.g., Mountain View Coach Lines, Inc. v. Storms, 102 A.D.2d 663, 664 (2d Dep’t 1984) (holding that “[t]he Appellate Division is a single statewide court divided into departments for administrative convenience . . . and, therefore, the doctrine of stare decisis requires trial courts in this department to follow precedents set by the Appellate Division of another department until the Court of Appeals or this court pronounces a contrary rule.”) (citations omitted); see also People v. Turner, 5 N.Y.3d 476, 482 (2005) (following Mountain View); Tzolis v. Wolff, 39 A.D.3d 138, 142 (1st Dep’t 2007) (holding that, “[a]bsent any authority from this Court, the motion court was bound to follow the applicable ruling of another department”) (citation omitted).

* * * * *

In light of the controlling authority of Martinez and the several opinions from lower New York courts consistent with that holding, the Insurance Department is of the view that marriages between same-sex partners legally entered outside of New York must be recognized in the State for purposes of interpreting the Insurance Law. Indeed, the Insurance Department would consider an insurer’s refusal to extend health insurance coverage to same-sex and opposite-sex spouses on an equal basis to be an unfair practice under Insurance Law §§ 2402 and 2403, and to be unfair discrimination under Insurance Law § 4224. Insurance Law § 2403 prohibits any person from engaging in this State in any unfair or deceptive act or practice constituting a “determined violation,” and Insurance Law § 2402(c) defines a determined violation as:

any unfair method of competition or any unfair or deceptive act or practice, which is not a defined violation but is determined by the superintendent pursuant to section two thousand four hundred five of this article to be such method, act or practice.

Insurance Law § 4224(b)(1), in turn, provides:

(b) No insurer doing in this state the business of accident and health insurance … shall:

(1) make or permit any unfair discrimination between individuals of the same class in the amount of premiums, policy fees, or rates charged for any policy of accident and health insurance, or in the benefits payable thereon, or in any of the terms or conditions of such policies, or in any manner whatsoever.

In the Insurance Department’s view, same-sex and opposite-sex legal spouses are similarly situated for purposes of construing the Insurance Law, a principal aim of which is to ensure that all consumers have a fair opportunity to purchase appropriate protection against risk. Although the Court of Appeals concluded in Hernandez that the Legislature could rationally distinguish between same-sex and opposite-sex couples for purposes of determining which couples may marry pursuant to the Domestic Relations Law, see 7 N.Y.3d at 358-60, the bases for the distinction deemed rational in Hernandez – that it could be considered more important to promote stability for children in opposite-sex than in same-sex relationships, and that it could be considered better for children to grow up with both a mother and a father than with two same-sex parents, see id. – are not probative to the construction of the Insurance Law.

In sum, where an employer offers group health insurance to employees and their spouses, the same-sex spouse of a New York employee who legally married his or her spouse out-of-state is entitled to health insurance coverage to the same extent as any opposite-sex spouse.

Moreover, please be advised that, while the query that gives rise to this opinion and the analysis set forth herein addresses accident and health insurance, the Department’s analyses and conclusions are applicable to all other kinds of insurance as well.

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Circular Letter No. 27 (2008), entitled "Recognition in New York of Marriages Between Same-Sex Partners Legally Performed in Other Jurisdictions", underscores that "the Opinion['s] . . . analyses and conclusions are applicable to all other kinds of insurance, too" and lists various Department contacts, including someone in the Property Bureau, for "specific questions about policy forms[.]" Thus, it would be shortsighted for anyone or any insurer to think that this pair of circular and opinion letters applies only to health insurance in New York.

The term "spouse" appears multiple times in the New York State Insurance Law. With respect to property and casualty insurance in particular, "spouse" appears in sections 3420, 5102, and 5202. The term is also used to define "you" or "your" in many auto and homeowners policies expansively to include the named insured and a spouse if a resident of the named insured's household.

The laws of foreign national and state jurisdictions is in flux regarding same-sex marriages. Locally to New York State, same-sex marriages are legally performed in Canada, Connecticut and Massachusetts. Although legally recognized in other states, same-sex civil unions are generally not regarded as the same as same-sex marriages and likely won't be treated as the same by the Insurance Department under Circular Letter No. 27 (2008) and its corresponding OGC opinion letter.

Unless and until the New York State Legislature addresses this question, or a New York court invalidates Circular Letter No. 27 (2008), New York property and casualty insurers should treat the non-named insured spouse of a legally valid same-sex marriage to be an insured under auto and homeowners policies. Question undoubtedly will arise regarding the scope and applicability of certain protections and exclusions as they relate to both affording coverage in the first place, and loss settlement procedures and amounts in the event of a covered loss. In addressing and evaluating such issues, insurers should first verify the validity of the same-sex marriage under the laws of the foreign jurisdiction in which that marriage was performed.