Offering Multiple Product Versions May Discriminate, N.Y. Official Warns

Although those reasons may make sense to insurers, "consumers have no way of knowing that there are other versions of the product — versions that may be more suitable for them — that are offered and sold to other consumers with identical needs, goals, or circumstances, and that may be cheaper," Bhalla said. "These sales practices result in unfair and unlawful discrimination among similarly situated individuals."

In some cases, Bhalla said, even the producers are unaware that different versions of the same product exist.

She suggested that insurers may still be able to sell different versions of a product if the insurer can "demonstrate a distinction that is reasonable, equitable, non-discriminatory, and based on sound actuarial principles."

But Bhalla recommended that an insurer review its product menus carefully before its next New York state market conduct examination.

Adrienne Harris. Credit: New York State Department of Financial Services