§ 1116. Prepaid legal services plans and legal services insurance. (a)\n(1) An authorized insurer subject to the provisions of this chapter\n(except an insurer organized to write the kinds of insurance specified\nin paragraph eighteen, twenty-three or twenty-five of subsection (a) of\nsection one thousand one hundred thirteen of this article or any\ncorporation licensed or organized pursuant to article sixty-six of this\nchapter) may, if licensed to transact legal services insurance, as\ndefined in paragraph twenty-nine of subsection (a) of section one\nthousand one hundred thirteen of this article, be authorized by the\nsuperintendent to issue contracts of legal services in connection with a\nprepaid legal services plan, if such plans satisfy the criteria set\nforth in subsection (b) of this section and the superintendent makes the\ndeterminations set forth in subsection (g) of this section. The\nprovisions of this section shall be applicable to a corporation\norganized pursuant to article forty-three of this chapter only if the\nproposed plan and method of operations have been approved by a vote of\nat least two-thirds of the corporation's board of directors before the\nplan is submitted to the superintendent.\n (2) A prepaid legal services plan may include legal services insurance\nas part of the plan, provided however, not more than an incidental\namount of the premium with respect to such prepaid legal services plan\nshall be attributable to legal services for defense only coverages for\ncommercial or other business related lawsuits or arbitration proceedings\ncommenced against the business entity that purchased the policy.\n (3) Legal services insurance may not be written except (i) in\nconjunction with prepaid legal services plans as authorized in this\nsection, or (ii) pursuant to a regulation promulgated by the\nsuperintendent permitting legal services insurance to be written as part\nof a policy of liability insurance covering related risks and, provided\nfurther, that legal services for defense only coverages for commercial\nor other business related lawsuits or arbitration proceedings commenced\nagainst the business entity that purchased the policy is not more than\nan incidental part of such liability insurance.\n (b) The superintendent may, in accordance with the provisions of\narticle twenty-three of this chapter, authorize the issuance of\ncontracts in connection with a prepaid legal services plan when such\nplan satisfies the following criteria:\n (1) its provisions are not misleading, confusing or inconsistent with\nthe needs of the public;\n (2) it avoids interference with judicial supervision over the\nprofessional and public obligations of lawyers;\n (3) it provides for prompt resolution of grievances concerning\nbenefits;\n (4) it does not restrict the beneficiary's choice of attorney,\nprovided, however, that compensation by the plan for attorneys not\nparticipating in the plan shall be subject to the schedule of benefits\nand fee structure set forth in the applicable contract and, provided\nfurther, that nothing herein shall be construed as prohibiting an\nattorney who is not participating in the plan from charging a fee for\nservices provided in excess of the schedule of benefits or fee structure\nset forth in the applicable contract;\n (5) it provides for a broad range of legal services, through personal\nand telephone consultations, such as wills, residential real estate\nmatters and domestic relations matters, provided nothing herein shall\nrequire or prohibit the offering of a particular type of legal services\nby a prepaid legal services plan;\n (6) it provides for written disclosure to contract holders, including\na description of the schedule of benefits, fee structure, exclusions or\nother limitations on benefits, and an explanation of a covered person's\nfinancial responsibility for the payment of premiums, co-payments,\ndeductibles or amounts charged in excess of the schedule of bene
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