Senate Bill S1981

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 1981--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 10, 2009
                               ___________

Introduced  by Sens. KLEIN, ADDABBO, DIAZ, C. JOHNSON, ONORATO, STAVISKY
  -- read twice and ordered printed, and when printed to be committed to
  the Committee on Insurance  --  committee  discharged,  bill  amended,
  ordered reprinted as amended and recommitted to said committee

AN ACT to amend the insurance law, in relation to accelerated payment of
  the death benefit under a life insurance policy

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 3230 of the insurance law is amended  by  adding  a
new subsection (h) to read as follows:
  (H)(1)  A POLICY HOLDER SHALL BE ENTITLED TO AN ACCELERATED PAYMENT OF
HIS OR HER DEATH BENEFIT IF IT IS  SHOWN  TO  THE  SATISFACTION  OF  THE
SUPERINTENDENT  THAT SUCH PERSON IS UNABLE TO PERFORM TWO OR MORE ACTIV-
ITIES OF DAILY LIVING, AS SUCH TERM IS DEFINED IN SECTION 81.03  OF  THE
MENTAL HYGIENE LAW.
  (2)  THE  AMOUNT  OF  BENEFIT  RECEIVED  BY THE POLICY HOLDER SHALL BE
DETERMINED BY CONSIDERING THE LENGTH IN WHICH THE  POLICY  HAS  BEEN  IN
EFFECT,  THE AMOUNT OF PREMIUMS THAT HAVE BEEN PAID UPON THE POLICY, THE
CASH VALUE OF THE POLICY, AND THE AMOUNT OF THE  DEATH  BENEFIT.  IN  NO
EVENT  SHALL  THE BENEFIT RECEIVED BY A POLICY HOLDER BE LESS THAN FORTY
PERCENT OF THE TOTAL FACE VALUE OF THE POLICY.
  (3) THE SUPERINTENDENT SHALL ESTABLISH, THROUGH RULES AND REGULATIONS,
THE METHOD FOR CALCULATING THE AMOUNT OF BENEFIT TO WHICH A POLICY HOLD-
ER SHALL BE ENTITLED. THE SUPERINTENDENT SHALL ALSO ESTABLISH A  MINIMUM
LENGTH  OF TIME FOR WHICH THE POLICY HAD TO HAVE BEEN IN EFFECT IN ORDER
FOR THE POLICY HOLDER TO RECEIVE A BENEFIT PURSUANT TO THIS SUBSECTION.
  (4) IF A POLICY HOLDER HAS PAID A MINIMUM OF TWO HUNDRED  FIFTY  THOU-
SAND  DOLLARS  OF  THEIR DEATH BENEFIT FOR LONG-TERM CARE SERVICES, THEN
ANY BENEFIT THEY RECEIVE  PURSUANT  TO  THIS  SUBSECTION  SHALL  NOT  BE
CONSIDERED  AN  ASSET  FOR  PURPOSES  OF  MEDICAL ASSISTANCE ELIGIBILITY
PURSUANT TO TITLE ELEVEN OF ARTICLE FIVE OF  THE  SOCIAL  SERVICES  LAW.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08903-02-9
              

S. 1981--A                          2

SUCH  DOLLAR AMOUNT SHALL BE ADJUSTED ANNUALLY BY AN AMOUNT EQUAL TO THE
ANNUAL PERCENTAGE OF CHANGE IN THE CONSUMER PRICE INDEX  FOR  ALL  URBAN
CONSUMERS, CPI-U, PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR.
  S 2. This act shall take effect immediately.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 1981--B

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 10, 2009
                               ___________

Introduced  by  Sens.  KLEIN,  ADDABBO, DIAZ, HASSELL-THOMPSON, HUNTLEY,
  C. JOHNSON, KRUEGER, ONORATO, SAMPSON, SAVINO, SCHNEIDERMAN,  STAVISKY
  -- read twice and ordered printed, and when printed to be committed to
  the  Committee  on  Insurance  --  committee discharged, bill amended,
  ordered reprinted as amended and  recommitted  to  said  committee  --
  recommitted  to  the  Committee on Insurance in accordance with Senate
  Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the insurance law, in relation to an accelerated payment
  of the death benefit rider under a life insurance policy

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 1 of subsection (a) of section 1113 of the insur-
ance law, as amended by chapter 130 of the laws of 2003, is  amended  to
read as follows:
  (1)  "Life  Insurance,"  means every insurance upon the lives of human
beings, and every insurance appertaining thereto, including the granting
of endowment benefits, additional benefits in  the  event  of  death  by
accident,  additional  benefits  to  safeguard  the contract from lapse,
accelerated payments of part or all of the death benefit  or  a  special
surrender value upon (A) diagnosis of terminal illness defined as a life
expectancy  of  twelve months or less, (B) diagnosis of a medical condi-
tion requiring extraordinary medical care  or  treatment  regardless  of
life expectancy, (C) certification by a licensed health care practition-
er  of any condition which requires continuous care for the remainder of
the insured's life in an eligible facility or at home when  the  insured
is chronically ill as defined by Section 7702(B) of the Internal Revenue
Code and regulations thereunder, provided the accelerated payments qual-
ify  under  Section 101(g)(3) of the Internal Revenue Code and all other
applicable sections of federal law in order to  maintain  favorable  tax
treatment, [or] (D) certification by a licensed health care practitioner

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08903-05-0
              

S. 1981--B                          2

that  the  insured  is chronically ill as defined by Section 7702 (B) of
the Internal Revenue  Code  and  regulations  thereunder,  provided  the
accelerated  payments  qualify  under  Section 101(g)(3) of the Internal
Revenue  Code  and all other applicable sections of federal law in order
to maintain favorable tax treatment and the  insurer  that  issues  such
policy  is  a  qualified  long term care insurance carrier under Section
4980c of the Internal Revenue Code or provide a special surrender value,
upon total and permanent disability of the insured, and  optional  modes
of  settlement  of proceeds, OR (E) THE INSURED'S HAVING BEEN A RESIDENT
OF A NURSING HOME, AS DEFINED IN SECTION TWENTY-EIGHT HUNDRED ONE OF THE
PUBLIC HEALTH LAW, FOR A PERIOD OF THREE MONTHS OR  MORE.  "Life  insur-
ance"  also  includes  additional  benefits  to  safeguard  the contract
against lapse in the event of unemployment of  the  insured  or  in  the
event  the  insured  is  a  resident of a nursing home. Amounts paid the
insurer for life insurance and proceeds applied under optional modes  of
settlement  or under dividend options may be allocated by the insurer to
one or more separate accounts pursuant  to  section  four  thousand  two
hundred forty of this chapter.
  S  2.  Subparagraph  (A)  of paragraph 11 of subsection (c) of section
3201 of the insurance law, as amended by chapter  537  of  the  laws  of
2000,  such  paragraph as renumbered by chapter 389 of the laws of 2001,
is amended to read as follows:
  (A) The superintendent shall not approve a life insurance policy which
provides for accelerated payment of death benefits or special  surrender
values  pursuant to subparagraph (B) [or subparagraph], (C) [or subpara-
graph], (D) OR (E) of paragraph one of subsection  (a)  of  section  one
thousand  one  hundred  thirteen of this chapter unless it also provides
for such accelerated payments or special surrender  values  pursuant  to
subparagraph (A) of paragraph one of subsection (a) of such section.
  S  3.  Section  3230  of  the insurance law is amended by adding a new
subsection (h) to read as follows:
  (H)(1) AN INSURED WHO HOLDS AN  ACCELERATED  PAYMENT  RIDER  SHALL  BE
ENTITLED  TO  AN  ACCELERATED  PAYMENT OF A DEATH BENEFIT IF IT IS SHOWN
THAT SUCH INSURED HAS MET ONE OF THE CONDITIONS STATED  IN  SUBPARAGRAPH
(C),  (D) OR (E) OF PARAGRAPH ONE OF SUBSECTION (A) OF SECTION ONE THOU-
SAND ONE HUNDRED THIRTEEN OF THIS CHAPTER.
  (2) THE AMOUNT OF THE BENEFIT TO WHICH THE INSURED IS  ENTITLED  SHALL
BE  DETERMINED  IN  AN ACTUARIALLY APPROPRIATE MANNER BY CONSIDERING THE
LENGTH THE POLICY HAS BEEN IN EFFECT, THE AMOUNT THAT HAS BEEN PAID UPON
THE POLICY, THE CASH VALUE OF THE POLICY, AND THE AMOUNT  OF  THE  DEATH
BENEFIT.
  (3) THE SUPERINTENDENT SHALL ESTABLISH, THROUGH GUIDELINES, AN ACTUAR-
IALLY  APPROPRIATE METHOD FOR CALCULATING THE AMOUNT OF BENEFIT TO WHICH
AN INSURED HOLDING AN ACCELERATED BENEFIT RIDER SHALL BE  ENTITLED.  THE
SUPERINTENDENT  SHALL  ALSO ESTABLISH A MINIMUM LENGTH OF TIME FOR WHICH
THE POLICY HAD TO HAVE BEEN IN EFFECT IN ORDER FOR THE POLICY HOLDER  TO
RECEIVE A BENEFIT PURSUANT TO THIS SUBSECTION.
  (4)  IF  A POLICY HOLDER HAS PAID A MINIMUM OF TWO HUNDRED FIFTY THOU-
SAND DOLLARS OF A DEATH BENEFIT FOR LONG-TERM CARE  SERVICES,  THEN  ANY
BENEFIT  RECEIVED PURSUANT TO THIS SUBSECTION SHALL NOT BE CONSIDERED AN
ASSET FOR PURPOSES OF MEDICAL ASSISTANCE ELIGIBILITY PURSUANT  TO  TITLE
ELEVEN OF ARTICLE FIVE OF THE SOCIAL SERVICES LAW.
  (5) EVERY INSURER PROVIDING LIFE INSURANCE IN THIS STATE SHALL OFFER A
RIDER  ENTITLING  THE  INSURED TO ACCELERATED PAYMENT OF A DEATH BENEFIT
PURSUANT TO THIS SUBSECTION. WITHIN ONE YEAR OF THE  EFFECTIVE  DATE  OF
THIS SUBSECTION, EACH INSURER SHALL OFFER EVERY INSURED OF A LIFE INSUR-

S. 1981--B                          3

ANCE  POLICY,  IN EFFECT BEFORE THE EFFECTIVE DATE OF THIS SUBSECTION, A
WRITTEN OFFERING FOR THE ACCELERATED PAYMENT OF A DEATH BENEFIT RIDER BY
MAIL.
  S  4. Subsection (f) of section 3230 of the insurance law, as added by
chapter 537 of the laws of 2000, is amended to read as follows:
  (f) This section shall apply to all life insurance policies or  policy
riders  or  provisions  thereof  that provide for accelerated payment of
death benefits or a special surrender  value  pursuant  to  subparagraph
(A),  (B) [or], (C) OR (E) of paragraph one of subsection (a) of section
one thousand one hundred thirteen of this chapter.
  S 5. This act shall take effect on  the  two  hundred  seventieth  day
after it shall have become a law and shall apply to life insurance poli-
cies  issued,  altered,  amended  or  renewed  on  or  after  such date;
provided, that, effective immediately, the  addition,  amendment  and/or
repeal of any rule or regulation necessary for the implementation of the
provisions of this act on its effective date are authorized and directed
to be made and completed on or before such date.