Provides that an approved policy form that has been revised may continue to be delivered or issued for delivery in New York state without further approval

BILL NUMBER:S4767B

Title of bill

An act to amend the insurance law, in relation to approval of certain insurance and annuity policy forms

Purpose

This bill would amend the insurance law to permit the Superintendent of Insurance to waive the re-approval of an amended policy form when the amendment is due to a revision to a separate account, so long as the revision has already been approved by the Department as part of the separate account plan of operation. Under those circumstances, such amended policy form would need to be filed on an informational basis with the.New York State Insurance Department, within sixty days after approval of the amended separate account plan. This amendment would also give the Superintendent the discretion to waive other approvals of amended policy forms.

Summary of provisions

This bill establishes a new paragraph (7) to §3201(b) of the insurance law to authorize the Superintendent of Insurance to waive the approval of an amended policy form, so long as the amendment had already been re-approved by the Insurance Department as part of a separate account plan of operation and so long as the amended form is filed with the Insurance Department on an informational basis, within sixty days after the revised separate account plan is approved. Current law is being interpreted so as not to allow the Department any discretion in waiving the re-approval of these types of amended policy forms. This amendment would further give the Superintendent the discretion to waive the approval of a class or classes of policy forms and only pursuant to written published guidance. Current law would not seem to allow the Superintendent this discretion in this regard.

Justification

Interpretation of the current law has led to the conclusion by some· that the Insurance Department has little discretion when it comes to determining whether or not an amendment to a previously-approved policy form rises to the level of needing re-approval by the Insurance Depart- ment. This has become an impediment when insurers need to make simple revisions to policies or contracts, particularly variable life and annu- ity contracts that contain a separate account.· Separate accounts are mutual fund-type options that are offered as an investment option under certain variable insurance products. These accounts are administered by another company (such as Fidelity or Magellan), which will routinely make fund revisions (such as, a simple renaming of a fund). Revisions to a separate account under a variable insurance contract are already required to be reviewed and reapproved pursuant to the separate account plan of operation required pursuant to §4240(e) of the Insurance Law. Currently, the Insurance Department also requires that the amended poli- cy form itself must also be reviewed and approved, in addition to the approval of the amended separate account plan of operation. This dual-

track, re-approval process unnecessarily slows down the ability of insurers to turn around amended forms to the insurance marketplace. This revision to the law would allow the Superintendent the discretion to waive approvals of amended policy forms, specifically under the circumstances described above, but also more generally, if the Depart- ment determines any amendment is inconsequential enough so as to not rise to the level of needing to be re-approved.

Prior legislative history

None.

Fiscal implications

No known costs to the State are associated with this bill.

Effective date

This act shall take effect sixty days after it shall have become a law.