Bill Text: NY A07708 | 2011-2012 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Relates to life insurance policies that credit additional amounts in accordance with an equity index; imposes additional requirements on such policies including notice provisions.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2012-05-31 - print number 7708a [A07708 Detail]

Download: New_York-2011-A07708-Amended.html

---

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        7708--A
                              2011-2012 Regular Sessions
                                 I N  A S S E M B L Y
                                     May 16, 2011
                                      ___________
       Introduced  by M. of A. MORELLE -- read once and referred to the Commit-
         tee on Insurance -- recommitted  to  the  Committee  on  Insurance  in
         accordance  with Assembly Rule 3, sec. 2 -- committee discharged, bill
         amended, ordered reprinted as amended and recommitted to said  commit-
         tee
       AN  ACT  to amend the insurance law, in relation to life insurance poli-
         cies that credit additional amounts in accordance with an equity index
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Subparagraph  (A)  of  paragraph  8  of subsection (a) of
    2  section 3203 of the insurance law is amended to read as follows:
    3    (A) that the policyholder shall be entitled to a loan at any time  the
    4  policy  is in force in an amount not exceeding the loan value, and under
    5  the conditions, specified in section four thousand two  hundred  twenty-
    6  two  of this chapter, provided three full years' premiums have been paid
    7  or, in the case of policies that provide that the policyholder may  vary
    8  the  amount  and  frequency of premiums to be paid to the insurer, after
    9  three years from the issue of the  policy,  if  the  policy  is  not  in
   10  default,  PROVIDED THAT POLICIES CREDITING ADDITIONAL AMOUNTS IN ACCORD-
   11  ANCE WITH AN EQUITY INDEX SHALL BE ENTITLED TO A LOAN,  ELECTED  BY  THE
   12  POLICY  OWNER,  AT  ANY TIME DURING THE EQUITY INDEX PERIOD AND THAT, IN
   13  THE EVENT THAT A POLICY LOAN THAT REDUCES THE ACCOUNT VALUE  IS  ELECTED
   14  PRIOR  TO  THE  END  OF  THE EQUITY INDEX PERIOD, THE ADDITIONAL AMOUNTS
   15  DETERMINED AT THE END OF THE  EQUITY  INDEX  PERIOD  SHALL  REFLECT  THE
   16  CHANGE IN ACCOUNT VALUES DURING SUCH EQUITY INDEX PERIOD;
   17    S  2.  Paragraph 14 of subsection (a) of section 3203 of the insurance
   18  law is amended to read as follows:
   19    (14) (A) in any policy under which additional amounts may be  credited
   20  for  any  period pursuant to subsection (b) of section four thousand two
   21  hundred thirty-two of this chapter, that states that the  insurer  shall
   22  credit  any  such  amount  no  less frequently than annually during such
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10037-03-2
       A. 7708--A                          2
    1  period; PROVIDED THAT ANY POLICY  THAT  CREDITS  ADDITIONAL  AMOUNTS  IN
    2  ACCORDANCE WITH AN EQUITY INDEX SHALL STATE THAT THE INSURER SHALL CRED-
    3  IT ANY SUCH AMOUNT NO LESS FREQUENTLY THAN EVERY TWO YEARS, AND
    4    (B) THAT ANY POLICY CREDITING ADDITIONAL AMOUNTS IN ACCORDANCE WITH AN
    5  EQUITY  INDEX  LESS  FREQUENTLY THAN ANNUALLY SHALL ALSO OFFER AN OPTION
    6  THAT CREDITS ADDITIONAL AMOUNTS NO LESS FREQUENTLY THAN ANNUALLY.
    7    S 3. Subparagraph (I) of paragraph 2 of subsection (b) of section 3209
    8  of the insurance law is relettered subparagraph (J) and a  new  subpara-
    9  graph (I) is added to read as follows:
   10    (I)  FOR  A  LIFE  INSURANCE  POLICY  CREDITING  ADDITIONAL AMOUNTS IN
   11  ACCORDANCE WITH AN EQUITY INDEX LESS FREQUENTLY  THAN  ANNUALLY,  STATE-
   12  MENTS  THAT  NO  ADDITIONAL AMOUNTS WILL BE CREDITED TO THE EQUITY INDEX
   13  ACCOUNT OF THE POLICY IF THE POLICYHOLDER FULLY  SURRENDERS  THE  POLICY
   14  PRIOR  TO  THE  EXPIRATION  OF THE EQUITY INDEX CREDITING PERIOD, SO THE
   15  POLICYHOLDER SHOULD CONSIDER OTHER ALTERNATIVES TO FULL SURRENDER BEFORE
   16  THAT PERIOD EXPIRES, SUCH AS A POLICY LOAN OR A PARTIAL  SURRENDER  FROM
   17  THE EQUITY INDEX ACCOUNT; AND
   18    S 4. Subsection (b) of section 3209 of the insurance law is amended by
   19  adding a new paragraph 3 to read as follows:
   20    (3) A LIFE INSURANCE POLICY CREDITING ADDITIONAL AMOUNTS IN ACCORDANCE
   21  WITH AN EQUITY INDEX LESS FREQUENTLY THAN ANNUALLY SHALL DISCLOSE TO THE
   22  POLICYHOLDER  AT  THE TIME OF A REQUEST FOR FULL SURRENDER OF THE POLICY
   23  BY THE POLICYHOLDER PRIOR TO THE EXPIRATION OF THE EQUITY  INDEX  PERIOD
   24  THAT  NO ADDITIONAL AMOUNTS WILL BE CREDITED TO THE EQUITY INDEX ACCOUNT
   25  OF THE POLICY IF THE POLICYHOLDER FULLY SURRENDERS THE POLICY  PRIOR  TO
   26  THE  EXPIRATION  OF  THE  EQUITY INDEX PERIOD SO THE POLICYHOLDER SHOULD
   27  CONSIDER  OTHER  ALTERNATIVES  TO  FULL  SURRENDER  BEFORE  THAT  PERIOD
   28  EXPIRES,  SUCH  AS  A POLICY LOAN OR A PARTIAL SURRENDER FROM THE EQUITY
   29  INDEX ACCOUNT.
   30    S 5.  The opening paragraph of paragraph  3  of  subsection  (n-1)  of
   31  section  4221  of the insurance law, as added by chapter 365 of the laws
   32  of 1986, is amended to read as follows:
   33    A policy that meets the requirements of this subsection  must  provide
   34  for  cash surrender values that meet the requirements of either subpara-
   35  graph (A) or subparagraph (B) and comply with the provisions of subpara-
   36  graphs (C) and (D) of this paragraph, PROVIDED THAT, FOR PARTIAL SURREN-
   37  DERS UNDER POLICIES THAT CREDIT ADDITIONAL AMOUNTS IN ACCORDANCE WITH AN
   38  EQUITY INDEX LESS  FREQUENTLY  THAN  ANNUALLY,  THE  ADDITIONAL  AMOUNTS
   39  DETERMINED  AT  THE  END  OF  THE  EQUITY INDEX PERIOD SHALL REFLECT THE
   40  CHANGE IN ACCOUNT VALUES DURING SUCH EQUITY INDEX PERIOD.
   41    S 6. This act shall take effect immediately.