S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7699
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 20, 2021
                                ___________
 
 Introduced by M. of A. HUNTER -- read once and referred to the Committee
   on Insurance
 
 AN  ACT  to  amend  the  insurance law, in relation to modifying certain
   interest rates for life insurance within  the  standard  nonforfeiture
   law
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraph (H) of paragraph  2  of  subsection  (n-1)  of
 section  4221  of the insurance law, as added by chapter 365 of the laws
 of 1986, is amended to read as follows:
   (H) "Net level whole life annual premium at  issue"  means  an  annual
 premium  based  on face amounts of insurance set forth in the policy and
 on the assumption of level annual premiums for life, the mortality table
 rate used to calculate the maximum mortality charges  (but  not  greater
 than  that  permitted  under  item (iv) of subparagraph (A) of paragraph
 three of this subsection) and an interest rate based on the  [higher  of
 four percent or that] RATE specified in the policy BUT NOT LESS THAN THE
 LESSER  OF  FOUR  PERCENT  AND THE NONFORFEITURE INTEREST RATE PER ANNUM
 PURSUANT TO PARAGRAPH TEN OF SUBSECTION (K) OF THIS SECTION.
   § 2. Item (iii) of subparagraph (B) of paragraph 3 of subsection (n-1)
 of section 4221 of the insurance law, as added by  chapter  365  of  the
 laws of 1986, is amended to read as follows:
   (iii) The policy shall provide that at least once each policy year the
 policyholder  has  the option to apply the portion of the cash surrender
 value necessary to provide an amount of guaranteed paid-up  life  insur-
 ance  at  least as great as the lesser of (I) and (II), where (I) is the
 amount of paid-up life insurance provided by applying the cash surrender
 value to provide such paid-up insurance, computed on  the  basis  of  an
 interest  rate (not less than [four] THE LESSER OF (AA) FOUR PERCENT AND
 (BB) THE NONFORFEITURE INTEREST RATE PER ANNUM PURSUANT TO PARAGRAPH TEN
 OF SUBSECTION (K) OF THIS SECTION MINUS ONE percent) guaranteed  in  the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11372-01-1

 A. 7699                             2
 
 policy  for  this  purpose, and a mortality basis (not less favorable to
 the policyholder than the mortality basis specified for an  insured  not
 medically  underwritten  in  item (iv) of subparagraph (A) of this para-
 graph) guaranteed in the policy for this purpose, and (II) is the amount
 of  paid-up  life  insurance such that the amount at risk on the paid-up
 insurance is the same as the amount at risk under  the  policy.  If  the
 option  is  elected, the portion of the cash surrender value not applied
 to provide the paid-up life insurance shall be paid to the policyholder.
 The guaranteed paid-up life insurance benefit may be provided under  the
 policy  or  by  means of a separate single premium life insurance policy
 issued by the  company  or  an  affiliate  or  subsidiary  thereof.  For
 purposes  of  this  item,  the  term  "cash  surrender  value"  is after
 reduction for outstanding loans or other amounts due under the policy.
   § 3. This act shall take effect immediately.