Requires insurers to specify either calendar days or business days in certain policies

Title of bill

An act to amend the insurance law, in relation to certain life insurance policies and annuities contracts

Purpose

To require insurers to specify either calendar days or business days in certain policies.

Summary of provisions

Section 1 of this bill amends subsection (a) of section 3203 of the insurance law by adding a new paragraph 18, which states that any insurer who issues a replacement life insurance policy or annuity contract shall provide to the policy or contract owner the right to return the policy or contract within sixty days from the date of delivery of such policy or contract and receive an unconditional full refund of all premiums or considerations paid on it. It further states that the insurer shall specify whether the term "days" refers to calendar days as defined in section 19 of the general construction law and as computed by section 20 of the general construction law or business days and where such term is not specified, the term "days" shall mean business days, Monday through Friday of any given week.

Section 2 of this bill states that the superintendent of financial services shall promulgate any and all rules or regulations and take any other measures necessary to implement this act on its effective date on or before such date.

Section 3 of this bill states that this act shall take effect on the one hundred twentieth day after it shall have become law and shall apply to all insurance policies, contracts and plans, issued, renewed, modified, altered or amended on or after such effective date.

Justification

Currently an insurer must provide notice to contract or policy owners that he or she has 60 days to return a replacement life insurance policy or annuity contract. However, in that notice there is no specification of whether the 60 days are calculated as calendar days or business days. This has led to confusion for consumers of such policies, causing them to miss deadlines. To avoid confusion in the future, these notices should be explicitly clear on how that 60-day period will be calculated. For notices that do not state such information, the longer period (i.e. business days) should be assumed.

This bill would require insurers to specify to contract or policy owners whether the 60 days will be calculated by calendar or business days, and where not specified, business days shall be used.

Legislative history

New Bill.

Fiscal implications

None.

Effective date

This act shall take effect on the one hundred twentieth day after it shall have become law and shall apply to all insurance policies, contracts and plans, issued, renewed, modified, altered or amended on or after such effective date.