Bill Text: NY S06666 | 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 1-0)

Status: (Passed) 2022-07-21 - SIGNED CHAP.443 [S06666 Detail]

Download: New_York-2021-S06666-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          6666

                               2021-2022 Regular Sessions

                    IN SENATE

                                      May 11, 2021
                                       ___________

        Introduced  by  Sen. BRESLIN -- 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  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
        S. 6666                             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.