| Date of Action |
Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
|---|---|
| Apr 05, 2016 |
referred to insurance |
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Senate Bill S7167
2015-2016 Legislative Session
Enacts the life insurance market revitalization act
download bill text pdfShare this bill
Sponsored By
(R, C, IP, RFM) Senate District
Archive: Last Bill Status - In Senate Committee Insurance Committee
- Introduced
-
- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
2015-S7167 (ACTIVE) - Details
- Current Committee:
- Senate Insurance
- Law Section:
- Insurance Law
- Laws Affected:
- Amd §206, Fin Serv L; amd §§301, 308, 311, 3201, 3209, 2123, 4226 & 4217, add §201, Ins L; amd §305, Ed L
2015-S7167 (ACTIVE) - Sponsor Memo
BILL NUMBER: S7167
TITLE OF BILL :
An act to amend the insurance law and the financial services law, in
relation to the establishment of a state insurance advisory board and
assessments for the funding of the department (Part A); to amend the
insurance law, in relation to the establishment of an administrative
procedure for guidance, regulations, inquiries and examinations by the
department (Part B); to amend the insurance law, in relation to policy
form filing procedures (Part C); to amend the insurance law, in
relation to direct response marketing of life insurance (Part D); to
amend the insurance law, in relation to the valuation of life
insurance policies and contracts (Part E); and to amend the education
law, in relation to requiring secondary school students to complete a
financial literacy and personal finances course (Part F)
PURPOSE :
The purpose of this Act is to implement amendments to the insurance,
financial services and education law in New York that will assist in
revitalizing the market for life insurance products and will improve
the affordability and availability of such products, which will, in
turn, inure to the benefit of the people of this state.
SUMMARY OF PROVISIONS :
This Act enacts into law major components of legislation which are necessary to implement the "Life Insurance Market Revitalization Act." Each component is wholly contained within a Part identified as Parts A through F. The effective date for each particular provision contained within such Part is set forth in the last section of such Part. Any provision in any section contained within a Part, including the effective date of the Part, which makes a reference to section "of this act", when used in connection with that particular component, shall be deemed to mean and refer to the corresponding section of the Part in which it is found. Section five of this Act sets forth the general effective date of this act. Part A of this Act adds a new § 201 of the insurance law to establish a State Insurance Advisory Board within the Department of Financial Services. The Advisory Board will consist of fifteen members who will be appointed by the Superintendent of the Department, including nine representatives of domestic insurance companies, five representatives of foreign insurance companies and one consumer representative. To the extent practicable, the membership should reflect a range of size and geographic location within the state. The Board should meet at least three times annually and will consider and recommend to the Superintendent: 1) ways to maintain and grow the insurance industry of the state, particularly focusing on the domestic insurance industry; 2) ways to encourage insurers to offer a diversity of affordable insurance & financial products throughout the state; and 3) amendments to or new laws, regulations & guidance, or the repeal thereof, in furtherance of these goals. Part A also amends § 206 of the financial services law to remove the authority of the state to assess regulated financial institutions for the indirect funding of the Department of Financial Services. The deletion of this language will limit the state's authority to assess New York-based insurers and banking institutions for the funding of the Department to only direct expenses and will disallow future assessments for the funding of indirect expenses, such as programs and services administered by other state agencies (sub-appropriations). This provision will take effect for each fiscal year beginning on and after April 1, 2017. Part B of this Act provides for amendments to §§ 30l, 308 and 311 of the insurance law to establish greater administrative procedures for the imposition of guidance, regulations, inquiries and examinations by the Department of Financial Services. The amendment to § 301 of the insurance law provides that, when imposing a regulation, rule or guidance, the Superintendent of the Department of Financial Services must consider whether or not such proposal will cause undue deleterious economic effect or have an overly burdensome impact upon the licensed entity upon which the rule could be imposed, particularly relating to the domestic insurance industry. The Superintendent must also consider and determine whether or not the proposal will negatively impact the affordability or availability of a product being offered or being considered for offering by the licensed entity. The assessment of the proposed regulation, rule or guidance should be set forth in writing and should include the purpose of, necessity for and expected benefits to be derived, as well as the costs associated with implementing the proposal by the regulated entity and whether or not it could negatively impact the pricing or availability of a product being offered by the licensed entity. A copy of the written assessment should be provided to the licensed entity prior to its proposal pursuant to the state administrative procedure act and prior to the issuance of any guidance. Similarly, the amendment to § 308 of the insurance law would require the Superintendent of the Department of Financial Services to consider and determine, in writing, whether or not a proposed inquiry authorized by this section of a licensed entity will cause undue deleterious economic effect or have an overly burdensome impact on the regulated person intended for receipt of the inquiry. The assessment of the proposed inquiry should be set forth in writing and should include the purpose of, necessity for and expected benefits to be derived, as well as the estimated costs associated with responding to the inquiry by the regulated entity, including but not limited to human resource, technology or administrative costs. The written assessment should be provided to the recipient of the inquiry prior to its imposition. The amendments to § 311 of the insurance law contained in this Part will place administrative procedures around the process of the examination of insurance companies. The amendments establish that a company examination should be considered closed when the report on examination is adopted by the Superintendent of the Department of Financial Services. The legislation also requires that a report on examination must include information regarding whether any fine or regulatory action will be imposed as a result of the examination and the amount of the fine or nature of the regulatory action. These provisions also provide that a new examination of an insurer cannot commence unless and until all previous examinations of such insurer have been closed. Part C of this Act amends § 3201 of the insurance law to provide that discretion in the review of products issued by life insurers by the Department of Financial Services (DFS) should be based upon specific provisions of laws or regulations. Existing law provides DFS staff reviewing life insurance policy forms with broad discretion to disapprove provisions, sometimes in an arbitrary and capricious fashion, which can result in less product availability at higher prices for life insurance products in New York. Part C also provides that war and travel exclusions on life insurance policies in New York can be displayed in bold letters, rather than red ink. Part D of this Act amends §§ 3209, 2123 and 4226 of the insurance law to facilitate direct response solicitation of life insurance policies in New York, including internet commerce. Section 3209 of the insurance law is amended to adjust the timing for delivery of certain policy disclosures to the applicant and to remove the requirement for the delivery of preliminary information. Such information, which is only required in lieu of a policy illustration, is often redundant of other information provided regarding the policy and can be inaccurate, as the policy provisions and pricing are often adjusted from point of sale to delivery of the policy. This type of information is also not required in any other state. Sections 2123 and 4226 of the insurance law are amended to require that the rules regarding the replacement of one life insurance policy or annuity contract with another in a direct response solicitation circumstance should be consistent with the NAIC Life Insurance and Annuities Replacement Model Regulation. Part E of this Act amends § 4217 of the insurance law to refine the rules related to the submission of reserving reports that are required under current law from life company appointed actuaries. The amendments would: 1) permit the appointed actuary to aggregate life, annuity and health business for purposes of performing asset adequacy testing in support of his actuarial opinion on reserve adequacy; and 2) restrict the Superintendent from imposing any assumptions or other additional standards to be used by the appointed actuary in forming his actuarial opinion beyond those prescribed by regulation. Additional actuarial standards that go beyond the current law should only be imposed on life companies via Regulation, subject to proposal and comment, and not by arbitrary Guidance. This is especially important since overly-conservative reserving requirements can result in higher product pricing and less product availability for life insurance products sold in New York. Part F of this Act amends § 305 of the education law by adding a new subdivision 53-a that authorizes the Education Commissioner to develop a curriculum of instruction in financial literacy and personal finances that will be required for completion by pupils in grades 11 and 12. New York citizens should be provided with fundamental education on financial literacy so that they can be armed with the knowledge they will need to make financial decisions as adults, including the value of financial protection insurance products and the importance of providing for their own retirement security. JUSTIFICATION : The products offered to the people of this state by life insurance companies offer important financial protection in crucial times of need. Life insurance policies provide families and businesses with essential benefits that allows them to carry on after a personal loss. Annuities provide people with regular income in retirement and allows them to provide for their own retirement security. Disability income insurance protects people from a loss of some or all of their income resultant from an accident or infirmity that keeps them from work. The benefits derived from these types of products provide the citizens of this state with vital financial proceeds in times of need. This protection allows them to continue to meet their financial obligations, such as keeping up on rent or mortgage payments, paying for a family member's education or paying for daily expenses in retirement, following a personal loss, an illness or accident or a loss of employment income. Despite their importance, these types of insurance products are not required as a matter of law or policy, as is the case with other types of insurance products such as automobile or homeowners insurance. People who purchase these products are choosing to do so with discretionary income and competing priorities and are also often lacking a clear understanding of the importance of the financial protection the products provide. It is in the interest of this state to assist in the promotion of these products, which provide its citizens with the tools to protect their own financial futures. In turn, the purchase of these products by the citizens of this state alleviates or reduces their need for public assistance in times of need, which decreases financial stress on the state. The economic downturn of 2008, coupled with a challenging regulatory environment, particularly in New York, and a decreased focus on the encouragement of financial literacy by the people of this state has negatively impacted sales of these financial protection products, which is to the detriment of the citizens of this state. It is, therefore, in the state's best interest to effectuate amendments to the insurance, financial services and education laws of this state that will assist in revitalizing the market for life insurance products and will, in turn, inure to the benefit of the people of this state. LEGISLATIVE HISTORY : New bill. EFFECTIVE DATE : Parts A through E of the Act will take effect immediately. Part F will take effect on the first of September in the calendar year commencing after the date it shall have become a law, provided that the Commissioner of Education must promulgate or repeal any rules or regulations necessary to implement the provisions of this Part.
2015-S7167 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
7167
I N S E N A T E
April 5, 2016
___________
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 and the financial services law, in
relation to the establishment of a state insurance advisory board and
assessments for the funding of the department (Part A); to amend the
insurance law, in relation to the establishment of an administrative
procedure for guidance, regulations, inquiries and examinations by the
department (Part B); to amend the insurance law, in relation to policy
form filing procedures (Part C); to amend the insurance law, in
relation to direct response marketing of life insurance (Part D); to
amend the insurance law, in relation to the valuation of life insur-
ance policies and contracts (Part E); and to amend the education law,
in relation to requiring secondary school students to complete a
financial literacy and personal finances course (Part F)
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act shall be known and may be cited as the "Life
Insurance Market Revitalization Act".
S 2. Legislative findings and intent. The legislature finds that the
products offered to the people of this state by life insurance companies
offer important financial protection to those people in crucial times of
need. Life insurance policies provide families and businesses with
important financial protection that allows them to carry on after a
personal loss. Annuities provide people with regular income in retire-
ment. Disability income insurance protects people from a loss of some or
all of their income resultant from an accident or infirmity that keep
them from work. The benefits derived from these types of products
provide the citizens of this state with vital financial proceeds in
times of need. This protection allows them to continue to meet their
financial obligations, such as keeping up on rent or mortgage payments,
paying for a family member's education or paying for daily expenses in
retirement, following a personal loss, an illness or accident or a loss
of employment income. Despite their importance, these types of insurance
products are not required as a matter of law or policy, as is the case
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14705-02-6
S. 7167 2
with other types of insurance products such as automobile or homeowners
insurance. People who purchase these products are choosing to do so with
discretionary income and competing priorities and are also often lacking
a clear understanding of the importance of the financial protection the
products provide. The legislature further finds it is in the interest of
this state to assist in the promotion of these products, which provide
its citizens with the tools to protect their own financial futures. In
turn, the purchase of these products by the citizens of this state alle-
viates or reduces their need for public assistance in times of need,
which decreases financial stress on the state. The legislature further
finds that the economic downturn of 2008, coupled with a challenging
regulatory environment, particularly in New York, and a decreased focus
on the encouragement of financial literacy by the people of this state
has negatively impacted sales of these financial protection products,
which is to the detriment of the citizens of this state.
The legislature therefore finds that it is in the interest of this
state to implement into New York law amendments to the insurance, finan-
cial services and education law that will assist in revitalizing the
market for life insurance products in this state and will, in turn,
inure to the benefit of the people of this state.
S 3. This act enacts into law major components of legislation which
are necessary to implement the "Life Insurance Market Revitalization
Act". Each component is wholly contained within a Part identified as
Parts A through F. The effective date for each particular provision
contained within such Part is set forth in the last section of such
Part. Any provision in any section contained within a Part, including
the effective date of the Part, which makes a reference to section "of
this act", when used in connection with that particular component, shall
be deemed to mean and refer to the corresponding section of the Part in
which it is found. Section five of this act sets forth the general
effective date of this act.
PART A
Section 1. The insurance law is amended by adding a new section 201 to
read as follows:
S 201. STATE INSURANCE ADVISORY BOARD. (A) THERE SHALL BE WITHIN THE
DEPARTMENT A STATE INSURANCE ADVISORY BOARD TO WORK WITH THE SUPERINTEN-
DENT IN PROMOTING THE DEVELOPMENT AND GROWTH OF THE INSURANCE INDUSTRY
IN THE STATE. THERE SHALL BE FIFTEEN MEMBERS OF THE ADVISORY BOARD WHO
SHALL BE APPOINTED BY THE SUPERINTENDENT. THE MEMBERSHIP SHALL CONSIST
OF: NINE REPRESENTATIVES OF DOMESTIC INSURANCE COMPANIES; AND FIVE
REPRESENTATIVES OF FOREIGN INSURANCE COMPANIES THAT, TO THE EXTENT PRAC-
TICABLE, REFLECT A RANGE OF SIZE AND GEOGRAPHICAL LOCATION WITHIN THE
STATE. THE MEMBERSHIP SHALL ALSO INCLUDE ONE REPRESENTATIVE OF CONSUM-
ERS. THE SUPERINTENDENT SHALL MAKE RULES TO GOVERN THE METHOD BY WHICH
INSURERS MAY NOMINATE PERSONS TO THE BOARD AND THE PROCESS FOR SELECTING
SUCH MEMBERS, PROVIDED THAT THE REPRESENTATIVE OF CONSUMERS SHALL BE
SELECTED BY THE SUPERINTENDENT. THE TERM OF EACH MEMBER OF SUCH ADVISORY
BOARD SHALL BE THREE YEARS, OR UNTIL A SUCCESSOR IS APPOINTED AND VACAN-
CIES SHALL BE FILLED FOR THE UNEXPIRED TERM ONLY. THE BOARD SHALL MEET
AT LEAST THREE TIMES ANNUALLY PURSUANT TO THE CALL OF THE SUPERINTEN-
DENT. THE MEMBERS OF THE ADVISORY BOARD SHALL RECEIVE NO COMPENSATION
NOR REIMBURSEMENT FOR EXPENSES. THE ADVISORY BOARD SHALL:
(1) CONSIDER AND RECOMMEND WAYS TO MAINTAIN AND GROW THE INSURANCE
INDUSTRY OF THE STATE, PARTICULARLY FOCUSING ON THE DOMESTIC INSURANCE
S. 7167 3
INDUSTRY, INCLUDING BRINGING TO THE SUPERINTENDENT'S ATTENTION ISSUES OF
CONCERN TO THE INSURANCE INDUSTRY;
(2) CONSIDER AND RECOMMEND WAYS TO ENCOURAGE AND FACILITATE INSURANCE
INSTITUTIONS IN OFFERING A DIVERSITY OF AFFORDABLE INSURANCE AND FINAN-
CIAL PRODUCTS THROUGHOUT THE STATE;
(3) RECOMMEND TO THE SUPERINTENDENT THE ESTABLISHMENT OF SUCH LAWS AS
MAY BE DEEMED NECESSARY, AND THE AMENDMENT OR REPEAL THEREOF, IN FURTH-
ERANCE OF THESE GOALS;
(4) RECOMMEND TO THE SUPERINTENDENT THE PROMULGATION OF ANY GUIDANCE
AND REGULATIONS, NOT INCONSISTENT WITH THE LAW, AS MAY BE DEEMED NECES-
SARY, AND THE AMENDMENT OR REPEAL THEREOF, IN FURTHERANCE OF THESE
GOALS; AND
(5) REPORT WITHIN THIRTY DAYS AFTER RECEIPT, ON ANY PROPOSED REGU-
LATIONS, AMENDMENTS THERETO, OR REPEAL THEREOF, PRIOR TO FINAL ACTION
THEREON BY THE SUPERINTENDENT.
(B) THE ADVISORY BOARD SHALL HAVE NO EXECUTIVE, ADMINISTRATIVE OR
APPOINTIVE POWERS OR DUTIES.
S 2. Subsection (a) of section 206 of the financial services law is
amended to read as follows:
(a) For each fiscal year commencing on or after April first, two thou-
sand [twelve] SEVENTEEN, assessments to defray operating expenses,
including all direct [and indirect] costs, of the department, except
expenses incurred in the liquidation of banking organizations, shall be
assessed by the superintendent in accordance with this subsection.
Persons regulated under the insurance law shall be assessed by the
superintendent for the operating expenses of the department that are
solely attributable to regulating persons under the insurance law, which
shall include any expenses that were permissible to be assessed in
fiscal year two thousand nine-two thousand ten, with the assessments
allocated pro rata upon all domestic insurers and all licensed United
States branches of alien insurers domiciled in this state within the
meaning of paragraph four of subsection (b) of section seven thousand
four hundred eight of the insurance law, in proportion to the gross
direct premiums and other considerations, written or received by them in
this state during the calendar year ending December thirty-first imme-
diately preceding the end of the fiscal year for which the assessment is
made (less return premiums and considerations thereon) for policies or
contracts of insurance covering property or risks resident or located in
this state the issuance of which policies or contracts requires a
license from the superintendent. Persons regulated under the banking law
shall be assessed by the superintendent for the operating expenses of
the department that are solely attributable to regulating persons under
the banking law in such proportions as the superintendent shall deem
just and reasonable. Operating expenses of the department not covered by
the assessments set forth above shall be assessed by the superintendent
in such proportions as the superintendent shall deem just and reasonable
upon all domestic insurers and all licensed United States branches of
alien insurers domiciled in this state within the meaning of paragraph
four of subsection (b) of section seven thousand four hundred eight of
the insurance law, and upon any regulated person under the banking law,
other than mortgage loan originators, except as otherwise provided by
sections one hundred fifty-one and two hundred twenty-eight of the work-
ers' compensation law and by section sixty of the volunteer firefight-
ers' benefit law. The provisions of this subsection shall not be appli-
cable to a bank holding company, as that term is defined in article
three-A of the banking law. Persons regulated under the banking law will
S. 7167 4
not be assessed for expenses that the superintendent deems to benefit
solely persons regulated under the insurance law, and persons regulated
under the insurance law will not be assessed for expenses that the
superintendent deems to benefit solely persons regulated under the bank-
ing law.
S 3. This act shall take effect immediately.
PART B
Section 1. Section 301 of the insurance law is amended to read as
follows:
S 301. Regulations by superintendent. (A) The superintendent shall
have the power to prescribe and from time to time withdraw or amend, in
writing, regulations, not inconsistent with the provisions of this chap-
ter:
[(a)] (1) governing the duties assigned to the members of the staff of
the department;
[(b)] (2) effectuating any power, given to him under the provisions of
this chapter to prescribe forms or otherwise make regulations;
[(c)] (3) interpreting the provisions of this chapter; and
[(d)] (4) governing the procedures to be followed in the practice of
the department.
(B) WHEN PROPOSING ANY REGULATION, RULE OR GUIDANCE, THE SUPERINTEN-
DENT SHALL CONSIDER AND DETERMINE WHETHER OR NOT SUCH PROPOSAL WILL
CAUSE UNDUE DELETERIOUS ECONOMIC EFFECT OR HAVE AN OVERLY BURDENSOME
IMPACT UPON ANY LICENSED ENTITY UPON WHICH IT IS INTENDED TO BE IMPOSED,
TAKING INTO PARTICULAR ACCOUNT ANY DISPROPORTIONATE IMPACT THAT IT MAY
HAVE ON A DOMESTIC LICENSED ENTITY, AND WHETHER OR NOT THE PROPOSAL WILL
NEGATIVELY IMPACT THE AFFORDABILITY OR AVAILABILITY OF A PRODUCT BEING
OFFERED BY THE LICENSED ENTITY. IN MAKING THAT DETERMINATION, THE SUPER-
INTENDENT SHOULD SET FOURTH IN A WRITTEN STATEMENT THE PURPOSE OF,
NECESSITY FOR AND EXPECTED BENEFITS TO BE DERIVED FROM THE PROPOSAL.
SUCH STATEMENT SHALL ALSO DETAIL THE PROJECTED COSTS OF COMPLYING WITH
THE PROPOSAL, WHICH SHALL INCLUDE:
(1) THE COSTS ASSOCIATED WITH IMPLEMENTING THE PROPOSAL BY THE
LICENSED ENTITY, INCLUDING BUT NOT LIMITED TO HUMAN RESOURCE, TECHNOLOGY
OR ADMINISTRATIVE COSTS, AND INCLUDING ANY ADDITIONAL COSTS THAT IT
MIGHT IMPOSE UPON A DOMESTIC LICENSED ENTITY;
(2) WHETHER OR NOT THE PROPOSAL COULD NEGATIVELY IMPACT THE PRICING OR
AVAILABILITY OF A PRODUCT BEING OFFERED BY THE LICENSED ENTITY;
(3) THE INFORMATION, INCLUDING THE SOURCE OR SOURCES OF SUCH INFORMA-
TION, AND METHODOLOGY UPON WHICH THE COST ANALYSIS IS BASED; OR
(4) WHERE THE SUPERINTENDENT FINDS THAT IT CANNOT FULLY PROVIDE A
STATEMENT OF SUCH COSTS, A STATEMENT SETTING FORTH ITS BEST ESTIMATE,
WHICH SHALL INDICATE THE INFORMATION AND METHODOLOGY UPON WHICH SUCH
BEST ESTIMATE IS BASED AND THE REASON OR REASONS WHY A COMPLETE COST
STATEMENT CANNOT BE PROVIDED.
A COPY OF THE PROPOSED REGULATION, RULE OR GUIDANCE, ALONG WITH THE
WRITTEN STATEMENT REQUIRED PURSUANT TO THIS SUBSECTION, SHALL BE MADE
AVAILABLE TO THE LICENSED ENTITY UPON WHICH THE PROPOSAL WILL BE IMPOSED
PRIOR TO A PROPOSED RULE OR REGULATION'S OFFICIAL PUBLICATION PURSUANT
TO THE STATE ADMINISTRATIVE PROCEDURE ACT AND PRIOR TO THE ISSUANCE OF
THE GUIDANCE.
S 2. Paragraph 1 of subsection (a) of section 308 of the insurance
law, amended by chapter 499 of the laws of 2009, is amended to read as
follows:
S. 7167 5
(1) The superintendent may also address to any health maintenance
organization, life settlement provider, life settlement intermediary or
its officers, or any authorized insurer or rate service organization, or
officers thereof, any inquiry in relation to its transactions or condi-
tion or any matter connected therewith. (A) PRIOR TO IMPOSING ANY SUCH
INQUIRY, THE SUPERINTENDENT SHALL CONSIDER AND DETERMINE WHETHER OR NOT
THE INQUIRY WILL CAUSE UNDUE DELETERIOUS ECONOMIC EFFECT OR HAVE ON
OVERLY BURDENSOME IMPACT UPON THE REGULATED PERSON INTENDED FOR RECEIPT
OF THE INQUIRY. IN MAKING THAT DETERMINATION, THE SUPERINTENDENT SHOULD
SET FORTH IN A WRITTEN STATEMENT THE PURPOSE OF, NECESSITY FOR AND
EXPECTED BENEFITS TO BE DERIVED FROM THE INQUIRY. SUCH STATEMENT SHALL
ALSO DETAIL THE PROJECTED COSTS OF RESPONDING TO THE INQUIRY WHICH SHALL
INCLUDE:
(I) THE COSTS FOR PREPARING A RESPONSE TO THE INQUIRY BY THE REGULATED
PERSON INTENDED FOR THE RECEIPT OF THE INQUIRY, INCLUDING BUT NOT LIMIT-
ED TO HUMAN RESOURCE, TECHNOLOGY OR ADMINISTRATIVE COSTS;
(II) THE INFORMATION, INCLUDING THE SOURCE OR SOURCES OF SUCH INFORMA-
TION, AND METHODOLOGY UPON WHICH THE COST ANALYSIS IS BASED; OR
(III) WHERE THE SUPERINTENDENT FINDS THAT IT CANNOT FULLY PROVIDE A
STATEMENT OF SUCH COSTS, A STATEMENT SETTING FORTH ITS BEST ESTIMATE,
WHICH SHALL INDICATE THE INFORMATION AND METHODOLOGY UPON WHICH SUCH
BEST ESTIMATE IS BASED AND THE REASON OR REASONS WHY A COMPLETE COST
STATEMENT CANNOT BE PROVIDED. THE WRITTEN STATEMENT SHALL BE MADE
AVAILABLE TO THE REGULATED PERSON INTENDED FOR RECEIPT OF THE INQUIRY
PRIOR TO THE IMPOSITION OF THE INQUIRY.
(B) Every corporation or person so addressed shall reply in writing to
such inquiry [promptly and] truthfully AND WITHIN A REASONABLE PERIOD OF
TIME, and such reply shall be, if required by the superintendent,
subscribed by such individual, or by such officer or officers of a
corporation, as the superintendent shall designate, and affirmed by them
as true under the penalties of perjury.
S 3. Section 311 of the insurance law is amended to read as follows:
S 311. Filing of report on examination. (a) Except as hereinafter
provided the superintendent may withhold from public inspection for such
time as he deems proper any report on examination made pursuant to
section three hundred ten of this article.
(b) (1) AN EXAMINATION SHALL BE CONSIDERED CLOSED WHEN THE REPORT ON
EXAMINATION IS ADOPTED BY THE SUPERINTENDENT. Before adopting any such
report and filing it for public inspection, the superintendent shall
notify the insurer or other person examined of its contents [and],
WHETHER ANY FINE WILL BE IMPOSED OR ANY REGULATORY ACTION WILL BE TAKEN
AS A RESULT OF THE EXAMINATION AND THE AMOUNT OF ANY FINE TO BE IMPOSED
OR NATURE OF ANY REGULATORY ACTION TO BE TAKEN. THE SUPERINTENDENT shall
ALSO afford such insurer or other person a reasonable opportunity to
obtain further details and to demand a hearing with reference to facts,
conclusions or recommendations [therein] contained IN THE REPORT, OR ANY
FINE TO BE IMPOSED OR REGULATORY ACTION TO TAKEN AS A RESULT OF THE
EXAMINATION.
(2) If a hearing is requested within ten days after [the giving]
RECEIPT of [such] THE notice REQUIRED PURSUANT TO PARAGRAPH ONE OF THIS
SUBSECTION, the superintendent shall give notice and a hearing in
accordance with the provisions of this article. Such hearing shall be
held before the superintendent or a deputy superintendent.
(c) The report on examination, with modifications thereof, if any,
shall be [accepted] ADOPTED by the superintendent and filed for public
inspection within six months after WRITTEN ACCEPTANCE OF THE REPORT BY
S. 7167 6
THE INSURER OR OTHER PERSON EXAMINED, OR THE final hearing thereon [and
if he]. IF THE SUPERINTENDENT deems it in the public interest to do so,
he OR SHE may publish any such report or any excerpt therefrom or summa-
ry thereof, in one or more newspapers in the state.
(d) In any action or proceeding in the name of the people against the
insurer or other person examined, or any officer or agent thereof, such
report, if adopted by the superintendent and filed for public
inspection, shall be admissible in evidence and shall be presumptive
evidence of the facts stated therein.
(e) NO FINE MAY BE IMPOSED ON OR REGULATORY ACTION TAKEN AGAINST AN
INSURER AS A RESULT OF AN EXAMINATION UNLESS THE AMOUNT OF THE FINE OR
THE NATURE OF THE REGULATORY ACTION WAS DISCLOSED IN THE NOTICE REQUIRED
IN PARAGRAPH ONE OF SUBSECTION (B) OF THIS SECTION.
(F) Nothing herein contained shall preclude the superintendent from
instituting any proceeding under article seventy-four of this chapter at
any time or from using as proof in such proceeding any report on exam-
ination or part thereof, whether or not such report has been adopted and
filed.
(G) THE SUPERINTENDENT SHALL NOT BEGIN AN EXAMINATION OF AN INSURER
UNLESS AND UNTIL ALL PREVIOUS EXAMINATIONS OF THE INSURER HAVE BEEN
CLOSED.
S 4. This act shall take effect immediately.
PART C
Section 1. Paragraphs 1, 2, 3 and 4 of subsection (c) of section 3201
of the insurance law, the opening paragraph of paragraph 4 as amended by
chapter 275 of the laws of 2014, is amended to read as follows:
(1) The superintendent may disapprove any policy form for delivery or
issuance for delivery in this state if he finds [that the same] IT
contains any provision or has any title, heading, backing or other indi-
cation of the contents of any or all of its provisions, which is likely
to mislead the policyholder, contract holder or certificate holder AND
WHICH IS CONTRARY TO LAW OR REGULATION.
(2) The superintendent may disapprove any life insurance policy form,
or any form of annuity contract or group annuity certificate, or any
form of funding agreement for delivery or issuance for delivery in this
state, if its issuance would be prejudicial to the interests of policy-
holders or members or it contains provisions which are unjust, unfair or
inequitable AND ITS ISSUANCE WOULD BE CONTRARY TO LAW OR REGULATION.
(3) The superintendent may disapprove any accident and health insur-
ance policy form for delivery or issuance for delivery in this state if
the benefits provided therein are unreasonable in relation to the premi-
um charged or any such form contains provisions which encourage misrep-
resentation or are unjust, unfair, inequitable, misleading[,] OR decep-
tive[, or] AND contrary to law or to the public policy of this state.
(4) The superintendent shall not approve any life insurance policy
form containing any war or travel exclusion or restriction, for delivery
or issuance for delivery in this state, unless such policy form shall
have printed or stamped across its face in [red and in] BOLD capital
letters not smaller than twelve point type[, or in an equally prominent
manner established at the discretion of the superintendent and promul-
gated through regulations,] the following:
"Read your policy (certificate) carefully.
"Certain (war, travel) risks are not assumed.
__________________________________
S. 7167 7
(state which or both)
In case of any doubt write your company (society) for further explana-
tion."
S 2. This act shall take effect immediately.
PART D
Section 1. Section 3209 of the insurance law, as amended by chapter
616 of the laws of 1997, subsection (b) as amended by chapter 170 of the
laws of 2008, subparagraph (H) as amended, subparagraph (I) as added and
subparagraph (J) of paragraph 2 of subsection (b) as relettered by chap-
ter 535 of the laws of 2013, paragraph 1 of subsection (d), paragraph 2
of subsection (e) and subsection (h) as amended by chapter 13 of the
laws of 2002, is amended to read as follows:
S 3209. Life insurance, annuities and funding agreements disclosure
requirements. (a) Except as hereafter exempted, this section shall apply
to any solicitation, negotiation or procurement of life insurance, annu-
ities or funding agreements occurring within this state. This section
shall apply to any issuer of life insurance or annuity contracts or
funding agreements, including fraternal benefit societies and the life
insurance department of a savings and insurance bank. Unless otherwise
specifically included, this section shall not apply to: credit life
insurance; group life insurance; life insurance policies, annuity
contracts, and funding agreements issued in connection with pension and
welfare plans as defined by and to the extent covered by the federal
Employee Retirement Income Security Act of 1974 (ERISA); funding agree-
ments issued to other than individuals pursuant to subsection (b) of
section three thousand two hundred twenty-two of this article; and any
group annuity unless at least one certificate is subject to paragraph
two of subsection (b) of section four thousand two hundred twenty-three
of this chapter.
(b) (1) No policy of life insurance shall be delivered or issued for
delivery in this state [after the applicable effective date, as set
forth in subsection (n) of this section,] unless, AT OR PRIOR TO DELIV-
ERY TO THE POLICY, the prospective purchaser has been provided with the
following:
(A) a copy of the most recent buyer's guide; and [the preliminary
information required by subsection (d) of this section, at or prior to
the time an application is taken. When sales solicitations are made by
mail, without the involvement of an agent or broker, each initial solic-
itation must include a copy of the buyer's guide unless the policy for
which application is made provides for a period of at least thirty days
within which the applicant may return the policy for an unconditional
refund of the premiums paid, in which event the buyer's guide must be
delivered with the policy or prior to delivery of the policy; in addi-
tion, such solicitation must alert the prospective purchaser of the
right to receive, upon request, a buyer's guide and a policy summary
prior to delivery of the policy; and]
(B) a policy summary [upon delivery of the policy], PROVIDED THAT THE
POLICYHOLDER MAY RETURN THE POLICY FOR AN UNCONDITIONAL REFUND OF THE
PREMIUMS PAID WITHIN THE PERIOD OF TIME PROVIDED UNDER PARAGRAPH ELEVEN
OF SUBSECTION (A) OF SECTION THREE THOUSAND TWO HUNDRED THREE OF THIS
ARTICLE AND PARAGRAPH THIRTEEN OF SUBSECTION (A) OF SECTION FOUR THOU-
SAND TWO HUNDRED FORTY OF THIS CHAPTER.
(2) No annuity contract or life insurance policy or certificate with
an equity index account shall be delivered or issued for delivery in
S. 7167 8
this state unless, [no later than at the time of application] AT OR
PRIOR TO DELIVERY OF THE CONTRACT, the prospective purchaser has been
provided with a disclosure statement containing the following:
(A) a statement in bold type to the effect that the equity index
account provides benefits linked to an external equity index and does
not participate directly in the equity market;
(B) a statement identifying the equity index used in the equity index
formula, together with a description of any alternate index should the
initial index no longer be publicly available;
(C) a statement indicating whether paid dividends are included in
changes in the equity index, together with a description of how such
dividends, or lack thereof, would affect the changes in the equity
index; the statement must provide the average dividend rate over the
lesser of ten years or the calculable life of the index;
(D) a statement fully describing the equity index formula;
(E) a statement explaining and illustrating the equity index formula
including any features of the equity index formula subject to change
after issuance of the contract, policy or certificate;
(F) a statement identifying the initial minimum guaranteed interest
rate for the minimum accumulation value of an equity index account and
any withdrawal charge;
(G) a statement identifying the initial current and the minimum speci-
fied participation rate, i.e., how much of the increase in the index
will be used to calculate the indexed linked interest rate, if any;
(H) a statement identifying the initial current and the minimum upper
limit or cap on the indexed linked interest rate, if any;
(I) for a life insurance policy crediting additional amounts in
accordance with an equity index less frequently than annually, a state-
ment to the effect that: if the policyholder requests a full surrender
of a policy prior to the expiration of the equity index crediting peri-
od, no additional interest based on the equity index will be credited
and that only the guaranteed interest will be credited to the account;
and the policyholder is advised to consider alternatives to a full
surrender of the policy prior to the expiration of the equity index
crediting period, such as a policy loan or, if available, a partial
withdrawal of the policy; and
(J) other disclosure information the superintendent deems appropriate.
(c) Every insurer must provide, to any policyholder who so requests, a
policy summary for each in-force premium-paying policy for which no
policy summary has ever been furnished. The insurer may charge the poli-
cyholder a reasonable fee for preparation of this summary, subject to
guidelines specified in rules promulgated by the superintendent.
(d) [The preliminary information shall be in writing and include, to
the extent applicable, the following:
(1) the name and address of the insurance agent or broker or, if no
agent or broker is involved, a statement of the procedure to be followed
in order to receive responses to inquiries concerning the preliminary
information;
(2) the full name and home office, administrative office or branch or
agency office address of the company in whose name the life insurance
policy is to be written;
(3) the date of the preliminary information and the generic name, the
initial amount of insurance and the initial annual premium for the basic
policy;
(4) the total guaranteed cash surrender values for the basic policy,
at the end of the tenth and twentieth policy years or at the end of the
S. 7167 9
premium-paying period if earlier. These values may be shown on a per
thousand or per unit basis;
(5) the effective policy loan annual percentage interest rate, if the
policy would contain this provision, and whether this rate is applied in
advance or in arrears, adjustable or fixed;
(6) for the life insurance policies described in paragraph one of
subsection (n) of this section, life insurance cost indexes and the
equivalent level annual dividend for the basic policy for ten and twenty
years, but in no case beyond the premium-paying period;
(7) in addition, the applicant shall be advised that, when the policy
is issued, a complete policy summary, including cost data, based on the
benefits, premiums and dividends of the policy as issued, will be
furnished; and that, following the receipt of the policy and policy
summary, there will be a period of not less than ten days within which
the applicant may return the policy for an unconditional refund of the
premiums paid; and
(8) notwithstanding the foregoing, no applicant for life insurance
shall be prevented or delayed in effecting or applying for coverage by
the requirements of this section. In such cases where prior to applica-
tion it is impractical to provide any items prescribed by this section,
such items may be estimated in good faith or furnished as soon thereaft-
er as practical prior to delivery of policy.
(e)] A policy summary shall include the following:
(1) a prominently placed title as follows:
"STATEMENT OF POLICY COST AND BENEFIT INFORMATION";
(2) the name and address of the insurance agent or broker, or, if no
agent or broker is involved, a statement of the procedure to be followed
in order to receive responses to inquiries regarding the policy summary;
(3) the full name and home office, administrative office or branch or
agency office address of the company in whose name the life insurance
policy is to be or has been written;
(4) the generic name of the basic policy and each rider;
(5) [for the life insurance policies described in paragraph one of
subsection (n) of this section,] the following amounts, where applica-
ble, for the first five policy years and representative policy years
thereafter sufficient to clearly illustrate the premium and benefit
patterns, including the years for which life insurance cost indexes are
displayed and at least one age from sixty through sixty-five or maturi-
ty, whichever is earlier:
(A) the annual premium for the basic policy;
(B) the annual premium for each optional rider;
(C) guaranteed amount payable upon death at the beginning of the poli-
cy year regardless of the cause of death, other than suicide or other
specifically enumerated exclusions, which is provided by the basic poli-
cy and each optional rider, with benefits provided under the basic poli-
cy and each rider shown separately;
(D) total guaranteed cash surrender values at the end of the year with
values shown separately for the basic policy and each rider;
(E) cash dividends payable at the end of the year with values shown
separately for the basic policy and each rider. Dividends need not be
displayed beyond the twentieth policy year; and
(F) guaranteed endowment amounts payable under the policy which are
not included in guaranteed cash surrender values above;
(6) the effective policy loan annual percentage interest rate if the
policy contains this provision, specifying whether this rate is applied
in advance or in arrears. If the policy provides for an adjustable loan
S. 7167 10
interest rate, the policy summary shall so state, shall set forth the
frequency at which the rate is to be determined for that policy, and
shall describe the index upon which the maximum rate is based at the
time the policy is issued;
(7) [for the life insurance policies described in paragraph one of
subsection (n) of this section:] (A) life insurance cost indexes for ten
and twenty years but in no case beyond the premium-paying period. Sepa-
rate indexes are to be displayed for the basic policy and for each
optional term life insurance rider. Such indexes need not be included
for optional riders which are limited to benefits such as accidental
death benefits, disability waiver of premium, preliminary term life
insurance coverage of less than twelve months and guaranteed insurabili-
ty benefits, nor for basic policies or optional riders covering more
than one life;
(B) the equivalent level annual dividend, in the case of participating
policies and participating optional term life insurance riders, under
the same circumstances and for the same durations at which life insur-
ance cost indexes are displayed;
(8) a policy summary which includes dividends shall also include a
statement that dividends are based on the company's current dividend
scale and are not guaranteed; in addition, the summary shall[, for the
life insurance policies described in paragraph one of subsection (n) of
this section,] include a statement in close proximity to the equivalent
level annual dividend as follows: "An explanation of the intended use of
the equivalent level annual dividend is included in the buyer's guide";
(9) a statement in close proximity to the life insurance cost indexes
as follows:
"AN EXPLANATION OF THE INTENDED USE OF THESE INDEXES IS PROVIDED IN
THE BUYER'S GUIDE"; and
(10) the date on which the policy summary is prepared.
[(f)] (E) The policy summary must be a separate document. All informa-
tion required to be disclosed must be set out in such a manner as not to
minimize or render any portion thereof obscure. Any amounts which remain
level for two or more years of the policy may be represented by a single
number if it is clearly indicated what amounts are applicable for each
policy year. Amounts in paragraph five of subsection [(e)] (D) of this
section shall be listed in total, not on a per thousand or per unit
basis. If more than one insured is covered under one policy or rider,
guaranteed death benefits shall be displayed separately for each insured
or for each class of insureds if death benefits do not differ within the
class. Zero amounts shall be displayed as zero and shall not be
displayed as a blank space.
[(g)] (F) Every insurer shall maintain, at its home office or princi-
pal office, a complete file containing one copy of each policy summary
form authorized by the insurer for use pursuant to this section.
[(h)] (G) An agent or broker shall inform a prospective purchaser,
prior to commencing a life insurance sales presentation, that he is
acting as a life insurance agent or broker, and inform the prospective
purchaser of the full name of the insurer which he is representing. In
sale situations in which an agent or broker is not involved, the insurer
shall identify its full name.
[(i)] (H) As used in this section, "buyer's guide" means a separate
document published and disseminated by insurers. The language therein
shall be promulgated by the superintendent, and shall, to the extent
practicable and in the public interest as determined by the superinten-
S. 7167 11
dent, be consistent with the latest version of a buyer's guide as
adopted by the national association of insurance commissioners.
[(j)] (I) For life insurance policies, except term life insurance
policies, which are to be issued to qualify for special tax treatment
under subsection (b) of section four hundred three of the Internal
Revenue Code of 1986, as amended, a written notice shall be delivered to
the proposed insured in a manner satisfactory to the superintendent at
or prior to the time an application is taken and shall read as follows:
"The purchase of a life insurance policy with cash value, which quali-
fies for special tax treatment under section 403(b) of the Internal
Revenue Code of 1986, as amended, may not be appropriate for individuals
seeking to maximize the accumulation of funds for retirement or for
individuals seeking life insurance coverage primarily to provide a
survivorship benefit for the spouse in the event of death prior to
retirement. If an individual needs coverage to continue after retire-
ment, current tax laws require the commencement of taxable distributions
under the tax sheltered annuity plan (TSA) no later than age seventy and
one-half which may necessitate some adjustment in the cash value life
insurance policy or may result in increased insurance costs in future
policy years. You should consult with your tax advisor before purchasing
life insurance with cash value as part of a tax sheltered annuity
(TSA)."
[(k)] (J) The superintendent shall promulgate by regulation the
contents [and], allowable format [of the preliminary information] and
[the] information to appear in the policy summary. The superintendent
shall also promulgate by regulation standards governing the content,
format and use of illustrations of individual life insurance policies
and certain group life insurance policies and certificates, life insur-
ance policies subject to section four thousand two hundred thirty-two of
this chapter, variable life insurance policies under which the death
benefits and cash values vary in accordance with the unit values of
investments held in a separate account and individual annuities, indi-
vidual funding agreements, variable annuities, and group annuity
contracts if any certificate is issued to which paragraph two of
subsection (b) of section four thousand two hundred twenty-three of this
chapter applies. The illustration regulation shall be consistent, to the
greatest extent practicable and in the public interest as determined by
the superintendent, with the illustration regulations as adopted by the
national association of insurance commissioners. The superintendent in
developing regulations to govern the content and format of the [prelimi-
nary information,] policy summary and illustrations shall ensure that
such forms are presented in an easy, concise and meaningful way to
enable consumers to understand the operation of the policy or contract.
[(l)] (K) An insurer of any life insurance policy or annuity contract
subject to this section shall notify the superintendent whether its
policies or contract forms have been or will be marketed with or without
an illustration. For those policies and contracts marketed with an
illustration which complies with the regulations promulgated pursuant to
subsection [(k)] (J) of this section, no [preliminary information or]
policy summary shall be required. For those policies which are not
marketed with an illustration, the [preliminary information and] policy
summary shall be provided pursuant to the provisions of this section.
[(m)] (L) The superintendent, by regulation, shall determine the
applicability of the illustration regulation promulgated pursuant to
subsection [(k)] (J) of this section to group life insurance policies
and group annuities and funding agreements. Such determination shall be
S. 7167 12
consistent, to the greatest extent practicable and in the public inter-
est, with the illustration regulations as adopted by the national asso-
ciation of insurance commissioners.
[(n) The effective dates of this section as applied to policies of
life insurance, annuity contracts, and funding agreements shall be as
follows:
(1) for individual life insurance policies, certain group life insur-
ance policies and certificates and life insurance policies subject to
section four thousand two hundred thirty-two of this chapter, January
first, nineteen hundred ninety-eight;
(2) for annuities and funding agreements, the date of promulgation of
regulations by the superintendent pursuant to subsection (k) of this
section but not later than June thirty, nineteen hundred ninety-eight;
(3) for variable life insurance policies and variable annuities, the
date of promulgation of regulations by the superintendent but not later
than January first, nineteen hundred ninety-nine.
No less than three months prior to promulgating the regulations
required to implement subsection (k) of this section pursuant to para-
graphs two and three of this subsection, the superintendent shall hold
public hearings on such regulations.]
S 2. Paragraph 3 of subsection (a) of section 2123 of the insurance
law, as amended by section 37-a of part D of chapter 56 of the laws of
2013, is amended and a new paragraph 4 is added to read as follows:
(3) Any replacement of individual life insurance policies or individ-
ual annuity contracts of an insurer by an agent, representative of the
same or different insurer or broker shall conform to standards promul-
gated by regulation by the superintendent. Such regulation shall:
(A) specify what constitutes the replacement of a life insurance poli-
cy or annuity contract and the proper disclosure and notification proce-
dures to replace a policy or contract;
(B) require notification of the proposed replacement to the insurer
whose policies or contracts are intended to be replaced;
(C) IN THE CASE OF AN APPLICATION THAT IS INITIATED AS A RESULT OF A
DIRECT RESPONSE SOLICITATION, INCLUDE PROVISIONS RELATING TO THE DUTIES
OF INSURERS WITH RESPECT TO DIRECT RESPONSE SOLICITATIONS THAT ARE
CONSISTENT WITH THE LIFE INSURANCE AND ANNUITIES REPLACEMENT REGULATION
AS ADOPTED BY THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS;
(D) require the timely exchange of illustrative and cost information
required by section three thousand two hundred nine of this chapter and
necessary for completion of a comparison of the proposed and replaced
coverage; and
[(D)] (E) provide for a sixty-day period following issuance of the
replacement policies or contracts during which the policy or contract
owner may return the policies or contracts and reinstate the replaced
policies or contracts.
(4) FOR PURPOSES OF PARAGRAPH THREE OF THIS SUBSECTION, "DIRECT
RESPONSE SOLICITATION" MEANS A SOLICITATION THROUGH A SPONSORING OR
ENDORSING ENTITY OR INDIVIDUALLY SOLELY THROUGH THE MAIL, TELEPHONE, THE
INTERNET OR OTHER MASS COMMUNICATION MEDIA.
S 3. Paragraph 6 of subsection (a) of section 4226 of the insurance
law, as added by chapter 616 of the laws of 1997 is amended and a new
subsection (e) is added to read as follows:
(6) replace the individual life insurance policies or individual annu-
ity contracts of an insurer by the same or different insurer without
conforming to the standards promulgated by regulation by the superinten-
dent. Such regulation shall:
S. 7167 13
(A) specify what constitutes the replacement of a life insurance poli-
cy or annuity contract and the proper disclosure and notification proce-
dures to replace a policy or contract;
(B) require notification of the proposed replacement to the insurer
whose policies or contracts are intended to be replaced;
(C) IN THE CASE OF AN APPLICATION THAT IS INITIATED AS A RESULT OF A
DIRECT RESPONSE SOLICITATION, INCLUDE PROVISIONS RELATING TO THE DUTIES
OF INSURERS WITH RESPECT TO DIRECT RESPONSE SOLICITATIONS THAT ARE
CONSISTENT WITH THE LIFE INSURANCE AND ANNUITIES REPLACEMENT REGULATION
AS ADOPTED BY THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS;
(D) require the timely exchange of illustrative and cost information
required by section three thousand two hundred nine of this chapter and
necessary for completion of a comparison of the proposed and replaced
coverage; and
[(D)] (E) provide for a sixty-day period following issuance of the
replacement policies or contracts during which the policy or contract
owner may return the policies or contracts and reinstate the replaced
policies or contracts.
(E) FOR PURPOSES OF PARAGRAPH SIX OF SUBSECTION (A) OF THIS SECTION,
"DIRECT RESPONSE SOLICITATION" MEANS A SOLICITATION THROUGH A SPONSORING
OR ENDORSING ENTITY OR INDIVIDUAL SOLELY THROUGH THE MAIL, TELEPHONE,
THE INTERNET OR OTHER MASS COMMUNICATION MEDIA.
S 4. This act shall take effect immediately.
PART E
Section 1. Paragraph 1 of subsection (a) of section 4217 of the insur-
ance law, as amended by chapter 22 of the laws of 1994, is amended to
read as follows:
(1) The superintendent shall annually [value, or] cause EVERY LIFE
INSURANCE COMPANY DOING BUSINESS IN THIS STATE to [be valued,] VALUE the
reserve liabilities (hereinafter called reserves) for all ITS outstand-
ing insurance policies and contracts [of every life insurance company
doing business in this state], except that, in the case of an alien
company, such valuation shall be limited to its United States business[,
and may]. THE SUPERINTENDENT SHALL certify the amount of any such
reserves, specifying the mortality table or tables, rate or rates of
interest and methods (net level premium method or other) used in the
calculation of such reserves, UNLESS THE SUPERINTENDENT DETERMINES THAT
THE MEMORANDUM PREPARED PURSUANT TO PARAGRAPH THREE OF SUBSECTION (E) OF
THIS SECTION TO SUPPORT THE ACTUARIAL OPINION OF RESERVES REQUIRED BY
PARAGRAPH ONE OF SUBSECTION (E) OF THIS SECTION FAILS TO MEET THE STAND-
ARDS PRESCRIBED BY REGULATION. In calculating such reserves, [the
superintendent] LIFE INSURANCE COMPANIES may use group methods and
approximate averages for fractions of a year or otherwise.
S 2. Paragraph 1 of subsection (e) of section 4217 of the insurance
law, as added by chapter 22 of the laws of 1994, is amended to read as
follows:
(1) General. Every life insurance company doing business in this state
shall annually submit the opinion of a qualified actuary as to whether
the reserves and related actuarial items held in support of the policies
and contracts specified by the superintendent by regulation are computed
appropriately, are based on assumptions which satisfy contractual
provisions, are consistent with prior reported amounts and comply with
applicable laws of this state. The superintendent [by regulation] shall
S. 7167 14
define the specifics of this opinion and add any other items deemed to
be necessary to its scope SOLELY BY REGULATION.
S 3. Subparagraph (C) of paragraph 4 of subsection (e) of section 4217
of the insurance law, as added by chapter 22 of the laws of 1994, is
amended to read as follows:
(C) The opinion shall be based on standards adopted from time to time
by the Actuarial Standards Board and on such additional standards as the
superintendent may by regulation prescribe. THE SUPERINTENDENT SHALL
NOT PRESCRIBE ANY ASSUMPTIONS OR OTHER ADDITIONAL STANDARDS TO BE USED
BY THE QUALIFIED ACTUARY WHEN FORMING THE OPINION BEYOND THOSE
PRESCRIBED BY REGULATION.
S 4. Paragraph 4 of subsection (f) of section 4217 of the insurance
law, as added by chapter 22 of the laws of 1994, is amended to read as
follows:
(4) [Without the specific approval of the superintendent subject to
such conditions as he may prescribe and as provided by regulation, an
insurer shall not] AN INSURER MAY aggregate the reserves referred to in
[two or more of paragraph] PARAGRAPHS one, two [or] AND three of this
subsection. [Such regulation may prescribe the conditions under which
the valuation of two or more classes of business of insurance or the
valuation of all of its insurance business to which this section applies
may be combined.] THE SUPERINTENDENT MAY, SOLELY BY REGULATION, REQUIRE
INSURERS TO SHOW THE RESULTS OF ASSET ADEQUACY ANALYSIS AS TO THE
ADEQUACY OF RESERVES REFERRED TO IN PARAGRAPHS ONE, TWO AND THREE OF
THIS SUBSECTION SEPARATELY IN THE ACTUARIAL MEMORANDUM PREPARED PURSUANT
TO PARAGRAPH THREE OF SUBSECTION (E) OF THIS SECTION, BUT MAY NOT
PROHIBIT INSURERS FROM AGGREGATING THE RESERVES REFERRED TO IN PARA-
GRAPHS ONE, TWO AND THREE OF THIS SUBSECTION FOR THE PURPOSES OF MEETING
THE MINIMUM STANDARDS FOR THE VALUATION OF LIFE INSURANCE POLICIES,
ANNUITIES AND GUARANTEED INVESTMENT CONTRACTS, AND INDIVIDUAL AND GROUP
ACCIDENT AND HEALTH INSURANCE POLICIES.
S 5. This act shall take effect immediately.
PART F
Section 1. Section 305 of the education law is amended by adding a new
subdivision 53-a to read as follows:
53-A. THE COMMISSIONER IS AUTHORIZED AND DIRECTED TO DEVELOP AN
CONCISE COURSE OF INSTRUCTION IN FINANCIAL LITERACY AND PERSONAL
FINANCES, AND REQUIRE THAT SUCH COURSE BE COMPLETED BY PUPILS IN GRADES
ELEVEN AND TWELVE. SUCH COURSE OF INSTRUCTION MAY BE INCORPORATED INTO
OTHER CLASS WORK OR COURSES OF INSTRUCTION PROVIDED TO SUCH PUPILS. THE
FINANCIAL LITERACY COURSE MAY INCLUDE, BUT NEED NOT BE LIMITED TO
INSTRUCTION ON USING CHECKING AND SAVINGS ACCOUNTS, OBTAINING SHORT OR
LONG TERM CREDIT, SECURING A LOAN FOR HIGH COST ITEMS SUCH AS A MOTOR
VEHICLE OR A HOME, OBTAINING AND USING CREDIT AND DEBIT CARDS, PURCHAS-
ING FINANCIAL PROTECTION INSURANCE PRODUCTS AND INVESTING AND SAVING
MONEY, AND PLANNING FOR RETIREMENT.
S 2. This act shall take effect on the first of September in the
calendar year commencing after the date it shall have become law; and,
provided, however, that the commissioner of education is immediately
authorized and directed to promulgate, amend and/or repeal any rules and
regulations necessary to implement the provisions on this act on its
effective date.
S 4. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be adjudged by a court of compe-
S. 7167 15
tent jurisdiction to be invalid, such judgement shall not affect, impair
or invalidate the remainder thereof, but shall be confined in its opera-
tion to the clause, sentence, paragraph, subdivision, section or part
thereof directly involved in the controversy in which such judgement
shall have been rendered. It is hereby declared to be the intent of the
legislature that this act would have been enacted even if such invalid
provisions had not been included herein.
S 5. This act shall take effect immediately provided, however, that
the applicable effective date of Parts A through F of this act shall be
as specifically set forth in the last section of such Parts.
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