Bill Text: NY S02817 | 2023-2024 | General Assembly | Introduced

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Bill Title: Relates to replacement of individual life insurance policies or annuity contracts; amends provisions relating to misrepresentations and misleading statements; requires replacements regulation be consistent with policies of the national association of insurance commissioners.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-01-03 - REFERRED TO INSURANCE [S02817 Detail]

Download: New_York-2023-S02817-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          2817

                               2023-2024 Regular Sessions

                    IN SENATE

                                    January 24, 2023
                                       ___________

        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  the  replacement  of
          individual  life insurance policies or individual annuity contracts of
          any insurer

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

     1    Section  1.  The  section  heading and subsections (a), (b) and (c) of
     2  section 2123 of the insurance law, subsection (a) as amended by  section
     3  37-a  of  part  D of chapter 56 of the laws of 2013, subsections (b) and
     4  (c) as amended by chapter 540 of the laws of 1996, are amended  to  read
     5  as follows:
     6    Misrepresentations[,]   and   misleading  statements  [and  incomplete
     7  comparisons]. (a) (1) No agent  or  representative  of  any  insurer  or
     8  health maintenance organization authorized to transact life, accident or
     9  health  insurance  or  health  maintenance organization business in this
    10  state, insurance broker, person who has received a grant  from  and  has
    11  been  certified  by  the health benefit exchange established pursuant to
    12  section 1311 of the Affordable Care Act, 42 U.S.C. § 18031, to act as  a
    13  navigator,  including  any  person employed by a certified navigator, or
    14  other person, firm, association or corporation, shall issue or circulate
    15  or cause or permit to be issued or circulated, any illustration,  circu-
    16  lar,  statement  or  memorandum  misrepresenting  the terms, benefits or
    17  advantages of any policy or contract of life, accident or health  insur-
    18  ance,  any  annuity  contract  or  any  health  maintenance organization
    19  contract, delivered or issued for delivery or to be delivered or  issued
    20  for delivery, in this state, or shall make any misleading estimate as to
    21  the  dividends  or share of surplus or additional amounts to be received
    22  in the future on such policy or contract, or shall  make  any  false  or
    23  misleading  statement  as  to the dividends or share of surplus or addi-
    24  tional amounts previously paid by any such insurer or health maintenance

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06658-01-3
        S. 2817                             2

     1  organization on  similar  policies  or  contracts,  or  shall  make  any
     2  misleading representation, or any misrepresentation, as to the financial
     3  condition  of any such insurer or health maintenance organization, or as
     4  to  the  legal  reserve system upon which such insurer or health mainte-
     5  nance organization operates.
     6    (2) No such person, firm, association or corporation shall make to any
     7  person or persons any incomplete [comparison]  or  misleading  represen-
     8  tation  of  any  such policies or contracts of any insurer, insurers, or
     9  health maintenance organization, for the purpose of inducing, or tending
    10  to induce, such person or persons to lapse,  forfeit  or  surrender  any
    11  insurance policy or health maintenance organization contract.
    12    (3)  Any replacement of individual life insurance policies or individ-
    13  ual annuity contracts of an insurer by an agent, representative  of  the
    14  same  or  different insurer or broker shall conform to standards promul-
    15  gated by regulation by the  superintendent.  Such  regulation  shall  be
    16  consistent,  to the greatest extent practicable and in the public inter-
    17  est, with the replacements regulation adopted by  the  national  associ-
    18  ation  of  insurance  commissioners,  as  amended from time to time, and
    19  shall also:
    20    (A) specify what constitutes the replacement of a life insurance poli-
    21  cy or annuity contract and the proper disclosure and notification proce-
    22  dures to replace a policy or contract;
    23    (B) require notification of the proposed replacement  to  the  insurer
    24  whose policies or contracts are intended to be replaced; and
    25    (C)  [require the timely exchange of illustrative and cost information
    26  required by section three thousand two hundred nine of this chapter  and
    27  necessary  for  completion  of a comparison of the proposed and replaced
    28  coverage; and
    29    (D)] provide for a sixty-day period following issuance of the replace-
    30  ment policies or contracts during which the policy or contract owner may
    31  return the policies or contracts and reinstate the replaced policies  or
    32  contracts.
    33    (b)  [Any comparison of the policies or contracts of any such insurer,
    34  insurers or health maintenance organization shall be  deemed  to  be  an
    35  incomplete comparison if it does not conform to all the requirements for
    36  comparisons established by regulation.
    37    (c)]  In  the determination, judicial or otherwise, of the incomplete-
    38  ness or misleading character of any such [comparison] representation, it
    39  shall not be presumed that the insured knew  or  knows  of  any  of  the
    40  provisions,  terms  or  benefits  contained  in  any insurance policy or
    41  health maintenance organization contract.
    42    § 2. The section heading and subsections (a), (b) and (c)  of  section
    43  4226  of  the  insurance  law, paragraph 6 of subsection (a) as added by
    44  chapter 616 of the laws of 1997, are amended to read as follows:
    45    Misrepresentations[,]  and  misleading  statements   [and   incomplete
    46  comparisons]  by insurers. (a) No insurer authorized to do in this state
    47  the business of life, or accident and health insurance, or to make annu-
    48  ity contracts shall:
    49    (1) issue or circulate, or cause or permit to be issued or  circulated
    50  on  its  behalf,  any  illustration,  circular,  statement or memorandum
    51  misrepresenting the terms, benefits or advantages of any of its policies
    52  or contracts;
    53    (2) make any estimate of the dividends or share of  surplus  or  addi-
    54  tional amounts to be received on such policies or contracts;
        S. 2817                             3

     1    (3)  make  any false or misleading statement of the dividends or share
     2  of surplus or additional amounts paid by any  such  insurer  on  similar
     3  policies or contracts;
     4    (4)  make  any  misleading representation, or any misrepresentation of
     5  the financial condition of any such insurer  or  of  the  legal  reserve
     6  system upon which it operates; [or]
     7    (5)  make  or deliver to any person or persons any incomplete [compar-
     8  ison of] or misleading representation regarding  any  such  policies  or
     9  contracts for the purpose of inducing, or tending to induce, such person
    10  or  persons  to  lapse,  forfeit  or  surrender  any insurance policy or
    11  contract[.]; or
    12    (6) replace the individual life insurance policies or individual annu-
    13  ity contracts of an insurer by the same  or  different  insurer  without
    14  conforming to the standards promulgated by regulation by the superinten-
    15  dent.  Such regulation shall be consistent, to the greatest extent prac-
    16  ticable and in the public interest,  with  the  replacements  regulation
    17  adopted  by  the  national  association  of  insurance commissioners, as
    18  amended from time to time, and shall also:
    19    (A) specify what constitutes the replacement of a life insurance poli-
    20  cy or annuity contract and the proper disclosure and notification proce-
    21  dures to replace a policy or contract;
    22    (B) require notification of the proposed replacement  to  the  insurer
    23  whose policies or contracts are intended to be replaced; and
    24    (C)  [require the timely exchange of illustrative and cost information
    25  required by section three thousand two hundred nine of this chapter  and
    26  necessary  for  completion  of a comparison of the proposed and replaced
    27  coverage; and
    28    (D)] provide for a sixty-day period following issuance of the replace-
    29  ment policies or contracts during which the policy or contract owner may
    30  return the policies or contracts and reinstate the replaced policies  or
    31  contracts.
    32    (b)  [Any  comparison of the policies or contracts of any such insurer
    33  or insurers shall be deemed to be an incomplete comparison  if  it  does
    34  not  conform  to all the requirements for comparisons established by the
    35  superintendent by regulation.
    36    (c)] In any determination, judicial or otherwise, of  the  incomplete-
    37  ness  or  misleading  character of any such [comparison or of] represen-
    38  tation, it shall not be presumed that the insured knew or knows  of  any
    39  of  the  provisions  or  benefits  contained  in any insurance policy or
    40  contract.
    41    § 3. This act shall take effect on the one hundred eightieth day after
    42  it shall have become a law.