Senate Bill S7196A

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

                                 7196--A
    Cal. No. 753

                            I N  S E N A T E

                             March 19, 2010
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be committed to the  Committee  on  Insurance  --  reported
  favorably  from  said  committee,  ordered to first and second report,
  ordered to a third reading, amended and ordered  reprinted,  retaining
  its place in the order of third reading

AN  ACT  to amend the insurance law, in relation to prohibiting acceler-
  ated payment of death benefits or a special surrender  value  pursuant
  to  a life insurance policy upon residency in a nursing home for three
  months or more by the person whose life is insured

  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
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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD16539-02-0

S. 7196--A                          2

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, WITH AN EXPEC-
TATION THAT SUCH INSURED WILL REMAIN A RESIDENT OF A NURSING HOME  UNTIL
DEATH.   "Life insurance" 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  thou-
sand 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. 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 4. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law.