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Bill

S 9746

Clarifies that certain prohibitions on insurance companies shall apply to policies or contracts purchased and delivered or issued for delivery in the state of New York

2025 Regular Session Introduced by Jamaal Bailey and 1 co-sponsor

New York-delivered insurance policies cannot be misrepresented or incompletely compared, and replacements require standards, disclosures, and a 60-day reconsideration window.

ADVANCED TO THIRD READING
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WeVote Research Nonpartisan
Bill Summary · S 9746

Purpose and intent

  • S. 9746 aims to clarify that certain prohibitions on insurance companies apply to policies or contracts “purchased and delivered or issued for delivery in the state of New York.”
  • The bill modifies provisions related to misrepresentations, misleading statements, and incomplete comparisons by insurers to ensure they apply to New York-delivered policies/contracts and to specify replacement and disclosure requirements.

Key provisions and changes

  • Section 4226 (a) – Misrepresentations and incomplete comparisons:

    • Retains existing prohibitions on insurers authorized in New York from:
    • Issuing or circulating illustrations, statements, or memorandums misrepresenting terms/benefits (subparagraphs 1).
    • Making estimates of dividends or surplus for such policies (subparagraph 2).
    • Making false or misleading statements about dividends, surplus, or added amounts (subparagraph 3).
    • Misstating an insurer’s financial condition or its reserve system (subparagraph 4).
    • Delivering incomplete comparisons intended to induce lapse, surrender, or forfeiture (subparagraph 5).
    • Adds a new item (6) prohibiting the replacement of individual life insurance policies or individual annuity contracts with the same or different insurer unless conforming to standards promulgated by the superintendent.
    • The regulation must:
      • Define what constitutes a replacement and the proper disclosure/notification procedures.
      • Require notification to the insurer whose policies are to be replaced.
      • Require timely exchange of illustrative and cost information for accurate comparison (per section 329 of the Insurance Law) to complete the comparison.
      • Provide a 60-day grace period after issuance of replacement policies/contracts during which the owner may return and reinstate the replaced policies/contracts.

  • Section 4226 (b) – Completeness of comparisons:

    • Any comparison of policies/contracts purchased and delivered in New York that does not meet the regulatory requirements for comparisons is deemed incomplete.

  • Section 4226 (c) – Knowledge and notice:

    • In determining whether a comparison or representation is incomplete/misleading, it shall not be presumed that the insured knew the provisions/benefits of the New York-delivered policy/contract.

  • Section 4226 (d) – Penalties:

    • If an insurer knowingly violates these provisions or knowingly receives premium/compensation resulting from violation, the insurer is subject to a penalty equal to the premium or compensation involved, in addition to other penalties. Affected individuals may sue for the penalty for their own use and benefit under applicable civil procedures.

Who/what is affected

  • Insurers authorized to do business in New York (life, accident and health, or annuity contracts) whose policies or contracts are purchased and delivered or issued for delivery in New York.
  • Policyholders/contract owners in New York who purchase or hold such policies/contracts.
  • Insurers engaging in replacements of life insurance policies or annuities for New York-delivered contracts.
  • The New York Superintendent of Insurance will regulate and promulgate the replacement standards and comparison requirements.

Procedural and timeline aspects

  • Effective date: Immediate upon enactment.
  • Regulatory Development: The superintendent must promulgate regulations specifying replacement standards, disclosure/notification procedures, cost information exchange, and the 60-day reconsideration window after replacement issuance.
  • Compliance and enforcement: Establishes penalties for knowing violations or receipt of improper compensation, with enforcement available to aggrieved individuals under civil procedures.

Additional context

  • The bill codifies and extends protections against misleading illustrations, financial condition representations, and incomplete comparisons specifically for policies delivered in New York, while adding a formal framework for policy replacements and associated disclosures.
  • No explicit monetary thresholds or sunset provisions are included beyond the immediate effective date and the mandatory regulatory framework.

Compiled from official sources — confirm details with the bill’s official record.

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