[§481X-8]  Contractual liability insurance policies.  (a)  Contractual liability insurance policies in this State shall provide that if covered service is not provided by the service contract provider or administrator within sixty days of proof of loss by the contract holder, the contract holder is entitled to apply directly to the contractual liability insurance company for services under the service contract that are covered under the policy.

     (b)  A contractual liability insurance policy insurer shall not terminate the policy until it has issued a notice of termination required by the commissioner under the insurance laws of this State.  The termination of a contractual liability insurance policy shall not reduce the insurer's responsibility for service contracts issued by providers prior to the date of termination.

     (c)  A provider covered by a contractual liability insurance policy shall be considered the agent of the contractual liability insurance policy insurer, for purposes of determining duties owed by the insurer to contract holders in accordance with the service contract and this chapter.

     (d)  Insurers issuing reimbursement insurance to providers are deemed to have received the premiums for the insurance upon the payment of provider fees by consumers for service contracts issued by the insured provider. [L 2000, c 221, pt of §2]