Relates to required form for exclusion language; permits superintendent of insurance to establish such form through promulgation of regulations.
TITLE OF BILL: An act to amend the insurance law, to allow for certain life insurance policy provisions to be disclosed in an alternative, equally prominent manner
PURPOSE: The purpose of the bill is to amend § 3201(c)(4) of the insurance law to authorize the Superintendent of Financial Services to develop an alternative to the disclosure requirements for certain life insurance policy provisions. Current law only allows such disclosure to be put forth in red ink, capital letters and twelve point font.
SUMMARY OF PROVISIONS: This bill amends § 3201(c)(4) of the insurance law to add language to provide that the Superintendent can, at his discretion, develop a uniform alternative to the requisite disclosure on life insurance policy applications that is equally prominent manner to the current requirement that the disclosure be in red ink, capital letters and twelve point type.
EXISTING LAW: Current law only allows such disclosure to be put forth in red ink, capital letters and twelve point font.
JUSTIFICATION: Section 3201(c)(4) of the insurance law provides the disclosure that must be included on a life insurance policy application if it contains a limitation or restriction related to war or travel. Such disclosure is required to be put forth in red ink, capital letters and twelve point font size.
At the time that this law was written, life insurance policy forms were typically printed in mass volume and distributed to the agent or employer who was marketing the policy. Since that time, the use of personal computers and office printers by such entities has proliferated so that these documents are now oftentimes, particularly in the group insurance setting, being provided to the employers who are offering them via computer and then printed out on office printers for distribution.
Although the original document may have been sent to the employer with red ink on the form, the form may not be reproduced in that manner if, for instance, the employer is not using a color printer. This bill would allow the superintendent to provide life insurers with some flexibility regarding the format of this disclosure while also providing for a uniform standard in the marketplace. For instance, insurers may have submitted to the Department of Financial Services forms that have the disclosure in bold, capital letters and larger than twelve point type. The Department would find it necessary to reject these alternatives because the law is very specific and detailed in how the disclosure should be put forward to the consumer. This bill would allow the Department to develop an alternative uniform standard.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK ________________________________________________________________________ 4374--A Cal. No. 967 2013-2014 Regular Sessions IN SENATE March 25, 2013 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -- recommitted to the Committee on Insurance in accordance with Senate Rule 6, sec. 8 -- 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, to allow for certain life insurance policy provisions to be disclosed in an alternative, equally prominent manner THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The opening paragraph of paragraph 4 of subsection (c) of section 3201 of the insurance law is amended to read as follows: The superintendent shall not approve any life insurance policy form containing any war or travel exclusion or restriction, for delivery or issuance for delivery in this state, unless such policy form shall have printed or stamped across its face in red and in capital letters not smaller than twelve point type, OR IN AN EQUALLY PROMINENT MANNER ESTAB- LISHED AT THE DISCRETION OF THE SUPERINTENDENT AND PROMULGATED THROUGH REGULATIONS, the following: S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD09743-03-4