Bill Text: NY A07699 | 2021-2022 | General Assembly | Introduced

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Bill Title: Modifies certain interest rates for life insurance within the standard nonforfeiture law.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2022-05-16 - substituted by s6666 [A07699 Detail]

Download: New_York-2021-A07699-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          7699

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                      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:

     1    Section 1. Subparagraph (H) of paragraph  2  of  subsection  (n-1)  of
     2  section  4221  of the insurance law, as added by chapter 365 of the laws
     3  of 1986, is amended to read as follows:
     4    (H) "Net level whole life annual premium at  issue"  means  an  annual
     5  premium  based  on face amounts of insurance set forth in the policy and
     6  on the assumption of level annual premiums for life, the mortality table
     7  rate used to calculate the maximum mortality charges  (but  not  greater
     8  than  that  permitted  under  item (iv) of subparagraph (A) of paragraph
     9  three of this subsection) and an interest rate based on the  [higher  of
    10  four percent or that] rate specified in the policy but not less than the
    11  lesser  of  four  percent  and the nonforfeiture interest rate per annum
    12  pursuant to paragraph ten of subsection (k) of this section.
    13    § 2. Item (iii) of subparagraph (B) of paragraph 3 of subsection (n-1)
    14  of section 4221 of the insurance law, as added by  chapter  365  of  the
    15  laws of 1986, is amended to read as follows:
    16    (iii) The policy shall provide that at least once each policy year the
    17  policyholder  has  the option to apply the portion of the cash surrender
    18  value necessary to provide an amount of guaranteed paid-up  life  insur-
    19  ance  at  least as great as the lesser of (I) and (II), where (I) is the
    20  amount of paid-up life insurance provided by applying the cash surrender
    21  value to provide such paid-up insurance, computed on  the  basis  of  an
    22  interest  rate (not less than [four] the lesser of (aa) four percent and
    23  (bb) the nonforfeiture interest rate per annum pursuant to paragraph ten
    24  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

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