What's happening
This bill requires insurers to provide a detailed financial review form for limited death benefit life insurance policies sold to people aged sixty and over.
Why it matters
Enhances transparency for older consumers. By requiring insurers to provide a standardized "Financial Review of Policy" form, the bill helps individuals aged 60 and over better understand the true costs and benefits of limited death benefit life insurance, including how accumulated premiums compare to potential payouts.
Promotes informed decision-making. The financial review includes a detailed table comparing annual premiums, potential interest if money were saved instead, death benefits, and surrender values. This allows consumers to assess whether the insurance is a good financial fit or if they might be better off investing premiums elsewhere.
Strengthens consumer protections and recourse. The bill allows consumers harmed by non-compliance to sue for damages (up to three times actual damages or $100, whichever is greater) and possibly recover attorney’s fees, while also empowering the Attorney General to seek injunctions and civil penalties against violators.
Addresses suitability and predatory sales risks. By highlighting that the policy may not be ideal for every consumer and that premiums could be lower if health information were collected, the bill seeks to reduce the chances of older adults being sold inappropriate or overpriced insurance products.
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Who cares
Headline styles
Life Insurance Rules for Seniors
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
No co-sponsors yet.
History
- Referred to consumer protection
- Referred to consumer protection
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Life Insurance for Seniors
In Assembly Committee · Insurance · Sponsor Vivian Cook
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5311
2019-2020 Regular Sessions
IN SENATE
April 24, 2019
Introduced by Sen. COMRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection
AN ACT to amend the general business law, in relation to limited death benefit life insurance policies for persons aged sixty and over
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The general business law is amended by adding a new article 30-B to read as follows:
ARTICLE 30-B
FINANCIAL REVIEW REQUIREMENT FOR LIMITED
DEATH BENEFIT LIFE INSURANCE POLICIES FOR
PERSONS AGED SIXTY AND OVER Section 645. Financial review of policy.
§ 645. Financial review of policy. 1. Whenever a life insurance policy or certificate of insurance is delivered or issued for delivery in this state to an applicant at age sixty and over, which limits death benefits during a period following the inception date of the policy or where the accumulated premiums exceed the death benefit at any point during the first ten years, the insurer shall provide the insured with a copy of a "Financial Review of Policy" form of at least ten point in size. Such form shall use substantially the same format and terminology shown below, and shall have complete information provided for any and all blank space.
Financial Review of Policy
Notice: You should review this form and your policy and
decide if the policy is suitable for you. If you are not
entirely satisfied, pursuant to New York State law, you may
return the policy within thirty days from the date you
receive it and obtain a full refund of any premiums paid.
This is a policy offered without an attempt to classify
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07987-01-9
S. 5311 2
risks by determining your state of health. Premiums may have
been lower if health information had been obtained.
Applicant Information:
Name: Age: Sex: (1) (2) (3) (4) (5)
Col 3
Prem- minus
iums Col 2 End of Annual accum- Cash Net Policy Prem- ulating Surren- gain Year ium interest Death der (net
at 5% Benefits Value loss) __________________________________________________________________ 1 2 3 4 5 6 7 8 9 10
Definitions. The following terms used in the above chart are defined as:
1. Annual Premium -- Amount you must pay each year to keep this policy in force.
2. Premiums Accumulating Interest at 5% -- Amount which could be earned if, instead of purchasing insurance, the premium dollars paid to the insurer were left to accumulate at 5% interest.
3. Death Benefits -- Amount that will be paid upon death, exclusive of any supplementary benefits.
4. Cash Surrender Value -- Amount the insurance company will pay you if you surrender your policy to the company for cash.
5. Net Gain or Loss -- This column shows whether your money would have earned more or less at 5% interest than your life insurance benefit.
2. Any consumer injured by a violation of this section may bring an action for recovery of damages. Judgment shall be entered in favor of a consumer in an amount not to exceed three times the actual damages or one hundred dollars whichever is greater. The court may award reasonable attorney's fees to a prevailing plaintiff.
3. In addition to the other remedies provided, whenever there shall be a violation of this section, application may be made by the attorney general in the name of the people of the state of New York to a court or justice having jurisdiction by a special proceeding to issue an injunction, and upon notice to the defendant of not less than five days, to enjoin and restrain the continuance of such violations; and if it shall appear to the satisfaction of the court or justice that the defendant has, in fact, violated this article, an injunction may be issued by such court or justice, enjoining and restraining any further violation, without requiring proof that any person has, in fact, been injured or damaged thereby. In any such proceeding, the court may make allowances to the attorney general as provided in paragraph six of subdivision (a) of section eighty-three hundred three of the civil practice law and
S. 5311 3
rules, and direct restitution. Whenever the court shall determine that a violation of this article has occurred, the court may impose a civil penalty of not more than five hundred dollars for each violation. In connection with any such proposed application, the attorney general is authorized to take proof and make a determination of the relevant facts and to issue subpoenas in accordance with the civil practice law and rules.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general business law, in relation to limited death benefit life insurance policies for persons aged sixty and over
Summary of provisions
This bill would add to the General Business Law a new section 641 to require that an insurer provide consumers with a prescribed "Financial Review of Policy" form when it delivers or issues for delivery in this state a life insurance policy or a certificate of insurance to an appli- cant aged sixty years or older, either when such certificate limits death benefits during a period following the inception date of the poli- cy or where the accumulated premiums exceed the death benefit at any point during the first ten years. The form must (i) be printed in at least ten point type size; (ii) be presented in a chart format with all blank spaces completed; and, (iii) contain notice advising the insured of the statutory right to cancel the policy within 30 days. Further, the form must contain the following information for each of the first ten years of the policy: (1) annual premium, (2) premiums accumulating interest at 5%, (3) death benefits, (4) cash surrender value, (5) difference, if any, between death benefit and premiums accumulating interest at 5%. The bill would authorize a private right of action in which the consumer could recover three times actual damages or $100, whichever is greater. In addition, the Attorney General would be author- ized to enjoin violations and to recover a civil penalty of $500 per violation.
In addition to the other remedies provided, whenever there is a violation of this section, application may be made by the Attorney General in the name of the people of the State of New York to a court or justice having jurisdiction by a special proceeding to issue an injunc- tion, and upon notice to the defendant of not less than five days, to enjoin and restrain the continuance of such violations. If it appears to the satisfaction of the court or justice that the defendant has, in fact, violated this article, an injunction may be issued by such court or justice, enjoining and restraining any further violation, without requiring proof that any person has, in fact, been injured or damaged thereby. In any such proceeding, the court may make allowances to the Attorney General as provided in paragraph six of subdivision (a) of section eighty-three hundred three of the civil practice law and rules, and direct restitution. Whenever the court shall determine that a violation of this article has occurred, the court may impose a civil penalty of not more than five hundred dollars for each violation. In connection with any such proposed application, the attorney general is authorized to take proof and make a determination of the relevant facts and to issue subpoenas in accordance with the civil practice law and rules.
Read the full memo (649 words)
Legislative history
Previously introduced; 2017/18 A.2074
Fiscal impact
None.
Justification
This bill would enable a senior citizen who is solicited to purchase a so-called "low-value" life insurance policy to make better informed buying choices by requiring the insurer, at the time of delivery of such policy, to make specified disclosure, in a readily understood manner, of material facts concerning important features thereof.
Many insurance companies have found a lucrative market in selling low value life insurance policies aimed at senior citizens. Although such policies are widely believed to be exceptionally poor buys, information acquired by the Department of Law Consumer Frauds and Protection Bureau indicates that thousands of senior citizens in this state purchase such policies annually. For example, one major insurer reports that, between 1986 and 1993, it sold approximately 62,000 such policies with an aver- age annual premium of $153.
Effective date
This act shall take effect on the first of January succeeding the date on which it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.