senate Bill S6507A

Signed By Governor
2013-2014 Legislative Session

Relates to accelerated death benefits under a life insurance policy

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Archive: Last Bill Status Via A9154 - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Nov 21, 2014 signed chap.448
Nov 10, 2014 delivered to governor
Jun 20, 2014 returned to assembly
passed senate
3rd reading cal.1102
substituted for s6507a
Jun 20, 2014 substituted by a9154a
Jun 09, 2014 advanced to third reading
Jun 03, 2014 2nd report cal.
Jun 02, 2014 1st report cal.1102
May 21, 2014 print number 6507a
amend and recommit to insurance
Jan 31, 2014 referred to insurance

Votes

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Bill Amendments

Original
A (Active)
Original
A (Active)

S6507 - Bill Details

See Assembly Version of this Bill:
A9154A
Law Section:
Insurance Law
Laws Affected:
Amd §3230, Ins L

S6507 - Bill Texts

view summary

Relates to accelerated death benefits under a life insurance policy and the right of the policy owner or certificate holder to rescind the request for such payments at any time during the process of application for said benefits.

view sponsor memo
BILL NUMBER:S6507

TITLE OF BILL: An act to amend the insurance law, in relation to accel-
erated death benefits under a life insurance policy

PURPOSE: This bill would amend subsection (c) of section 3230 of the
insurance law relating to the timing of the payment of an accelerated
death benefit by a life insurer.

SUMMARY OF PROVISIONS: Currently, § 3230(c) of the insurance law prohib-
its life insurers from paying a policyholder an accelerated death bene-
fit until a period of fourteen days after they have applied for receipt
of such benefit and been provided the disclosure and illustration
required pursuant to the section. This legislation deletes that require-
ment so that the accelerated death benefit applied for by the policy-
holder may be paid out in a more timely manner by the life insurer.

JUSTIFICATION: Section 3230 of the insurance law establishes the rules
that life insurers must follow when a policyholder applies for an accel-
erated death benefit under a life insurance policy. Life insurance poli-
cies that contain an accelerated death benefit provision authorize the
policyholder to apply to receive some portion of their life insurance
death benefit before they are deceased. Policies that provide this
option to policyholders are authorized to provide the accelerated death
benefit if the policyholder is determined to be terminally, catastroph-
ically or chronically (requiring long term care services) ill, as such
terms are described pursuant to § 1113(a)(1)(A)-(D) of the insurance
law. Section 3230(c) of the insurance law requires that life insurers
must suspend payment of the accelerated death benefit for a period of 14
days after the policyholder has applied to receive such benefit and
after the disclosure required has been provided to them.

This law was enacted over two decades ago and, since that time, experi-
ence has shown that policyholders rarely decline or reverse payment of
the accelerated death benefit after they have applied for the benefit.
To the contrary, policyholders have complained that they must wait for
the two week period to expire before they can receive payment of the
death benefit for which they had applied. All of the people applying for
this benefit are experiencing extreme difficulties with their health
status, either having been diagnosed with a terminal illness (life
expectancy of twelve months or less), a medical condition requiring
extraordinary medical care or receiving qualified long term care
services. They are often in need of the death benefit payment as quickly
as possible and are frequently displeased that they must wait for the
payment due to the requirements of the law.

This bill removes the requirement that a life insurer must wait 14 days
before payment of an accelerated death benefit and facilitates more
immediate payment to policyholders when they are most in need of that
payment.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately.

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

                                  6507

                            I N  S E N A T E

                            January 31, 2014
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law,  in  relation  to  accelerated  death
  benefits 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. Subsection (c) of section 3230 of  the  insurance  law,  as
added by chapter 428 of the laws of 1991, is amended to read as follows:
  (c) [Insurers are prohibited from paying accelerated death benefits or
special surrender values to the policy owner or certificate holder for a
period of fourteen days from the date on which the information specified
in  subdivision  (d)  of  this  section is transmitted in writing to the
policy owner or certificate holder.] The  policy  owner  or  certificate
holder  shall have the right to rescind the request for such payments at
any time during the process of application for said benefits.
  S 2. This act shall take effect immediately.







 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13611-01-4

S6507A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A9154A
Law Section:
Insurance Law
Laws Affected:
Amd §3230, Ins L

S6507A (ACTIVE) - Bill Texts

view summary

Relates to accelerated death benefits under a life insurance policy and the right of the policy owner or certificate holder to rescind the request for such payments at any time during the process of application for said benefits.

view sponsor memo
BILL NUMBER:S6507A

TITLE OF BILL: An act to amend the insurance law, in relation to
accelerated death benefits under a life insurance policy

PURPOSE: This bill would amend subsection (c) of section 3230 of the
insurance law relating to the timing of the payment of an accelerated
death benefit by a life insurer

SUMMARY OF PROVISIONS: Currently, § 3230(c) of the insurance law
prohibits life insurers from paying a policyholder an accelerated
death benefit until a period of five days after they have applied for
receipt of such benefit and been provided the disclosure and
illustration required pursuant to the section. This legislation
deletes that requirement so that the accelerated death benefit applied
for by the policyholder may be paid out in a more timely manner by the
life insurer.

JUSTIFICATION: Section 3230 of the insurance law establishes the rules
that life insurers must follow when a policyholder applies for an
accelerated death benefit under a life insurance policy. Life
insurance policies that contain an accelerated death benefit provision
authorize the policyholder to apply to receive some portion of their
life insurance death benefit before they are deceased. Policies that
provide this option to policyholders are authorized to provide the
accelerated death benefit if the policyholder is determined to be
terminally, catastrophically or chronically (requiring long term care
services) ill, as such terms are described pursuant to
1113(a)(1)(A)-(D) of the insurance law Section 3230(c) of the
insurance law requires that life insurers must suspend payment of the
accelerated death benefit for a period of five days after the
policyholder has applied to receive such benefit and after the
disclosure required has been provided to them.

This law was enacted over two decades ago and, since that time,
experience has shown that policyholders rarely decline or reverse
payment of the accelerated death benefit after they have applied for
the benefit To the contrary, policyholders have complained that they
must wait for the two week period to expire before they can receive
payment of the death benefit for which they had applied All of the
people applying for this benefit are experiencing extreme difficulties
with their health status, either having been diagnosed with a terminal
illness (life expectancy of twelve months or less), a medical
condition requiring extraordinary medical care or receiving qualified
long term care services. They are often in need of the death benefit
payment as quickly as possible and are frequently displeased that they
must wait for the payment due to the requirements of the law

This bill removes the requirement that a life insurer must wait five
days before payment of an accelerated death benefit and facilitates
more immediate payment to policyholders when they are most in need of
that payment.

LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS: None.


EFFECTIVE DATE: Immediately

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 6507--A

                            I N  S E N A T E

                            January 31, 2014
                               ___________

Introduced  by  Sen.  SEWARD -- 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 death
  benefits 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.  Subsection  (c)  of section 3230 of the insurance law, as
added by chapter 428 of the laws of 1991, is amended to read as follows:
  (c) Insurers are prohibited from paying accelerated death benefits  or
special surrender values to the policy owner or certificate holder for a
period  of  [fourteen]  FIVE days from the date on which the information
specified in subdivision (d) of this section is transmitted  in  writing
to  the  policy owner or certificate holder. The policy owner or certif-
icate holder shall have the  right  to  rescind  the  request  for  such
payments  at  any  time during the process of application for said bene-
fits.
  S 2. This act shall take effect immediately.






 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13611-03-4

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