Bill Text: NY S07744 | 2021-2022 | General Assembly | Amended

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Bill Title: Provides that purchasers of dividend paying annuities shall be considered a separate class of annuitants from purchasers of annuities that do not pay dividends.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2022-12-30 - APPROVAL MEMO.109 [S07744 Detail]

Download: New_York-2021-S07744-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         7744--A
            Cal. No. 662

                    IN SENATE

                                    January 10, 2022
                                       ___________

        Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
          printed to be committed to the  Committee  on  Insurance  --  reported
          favorably  from  said  committee,  ordered to first and second report,
          ordered to a third reading, amended and ordered  reprinted,  retaining
          its place in the order of third reading

        AN  ACT  to amend the insurance law, in relation to authorizing dividend
          paying deferred income annuities

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subparagraph  (E)  of  paragraph  1  of subsection (a) of
     2  section 4223 of the insurance law, as amended by chapter 864 of the laws
     3  of 1985, is amended to read as follows:
     4    (E) [A] (i) Except as provided in clause (ii) of this subparagraph,  a
     5  statement  that  the  annuity benefits at the time of their commencement
     6  will not be less than those that would be provided by the application of
     7  an amount, hereinafter defined, to  purchase  any  single  consideration
     8  immediate  annuity  contract  offered  by the company at the time to the
     9  same class of annuitants. For  contracts  that  provide  cash  surrender
    10  benefits, such amount shall be the greater of the cash surrender benefit
    11  or  ninety-five  percent  of what the cash surrender benefit would be if
    12  there were no withdrawal charge. For contracts that do not provide  cash
    13  surrender  benefits, such amount shall be the present value of the paid-
    14  up annuity benefit  provided  under  the  contract  in  accordance  with
    15  subsection (d) of this section.
    16    [This statement will not affect the amount of any benefits required to
    17  be provided under any other provision of this section.]
    18    (ii)  For  paid-up  deferred annuity contracts in which each consider-
    19  ation paid into the contract purchases guaranteed paid-up annuity  bene-
    20  fits  determined at the time the consideration is paid, a statement that
    21  the annuity benefits at the time each consideration is paid will not  be
    22  less than those that would be provided by the application of the consid-
    23  eration  to current purchase rates for new sales of such contract or any
    24  comparable paid-up deferred annuity contract offered by the  company  at
    25  that  time  to  the same class of annuitants. For purposes of this item,

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14228-02-2
        S. 7744--A                          2

     1  dividends applied to purchase paid-up additions to the contract shall be
     2  treated as considerations paid into the contract. This  statement  shall
     3  not  affect the amount of any benefits required to be provided under any
     4  other provision of this section.
     5    § 2. Subsection (b) of section 3209 of the insurance law is amended by
     6  adding a new paragraph 3 to read as follows:
     7    (3) No participating dividend-paying paid-up deferred annuity contract
     8  shall  be  delivered  or  issued  for  delivery  in  this state unless a
     9  prospective purchaser is provided with a disclosure statement, no  later
    10  than at the time of application, containing the following:
    11    (A) a statement indicating that dividends are not guaranteed under the
    12  participating  dividend-paying paid-up deferred annuity contract and the
    13  income is therefore not guaranteed to increase from  the  dollar  amount
    14  set at the time of issue; and
    15    (B) a statement indicating that the initial income under a participat-
    16  ing  dividend-paying paid-up deferred annuity contract may be lower than
    17  the initial income under a fully  guaranteed  paid-up  deferred  annuity
    18  contract.
    19    § 3. This act shall take effect immediately.