BILL NUMBER: S7286
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law, in relation to term life insurance
suitability information and the limiting of certain regulations or
orders promulgated by the superintendent related thereto
 
PURPOSE OR GENERAL IDEA OF BILL:
To provide an exemption from the superintendent's authority to impose
certain suitability criteria, .a best interests standard, or a fiduciary
duty on licensed life insurance agents and brokers, or life insurers
duly licensed to do business in the State of New York, in conjunction
with the provision of counsel, advice, or a recommendation to a consumer
or potential consumer of term life insurance when the amount of such
life insurance policy is one million dollars or less.
 
SUMMARY OF PROVISIONS:
Section one of the bill contains the legislative findings and intent -
To create more opportunities for the availability of term life insur-
ance. Section two of the bill adds two new sections - sections 4227 and
4227-a - to the insurance law, defining what constitutes "suitable"
information, and limiting the superintendent's powers, respectively.
Suitability is limited to age and annual income. Section three contains
the effective date.
 
JUSTIFICATION:
Compliance with 11 NYCRR 224 (Reg 187) - which imposes a suitability and
best interest standard on all life insurance sales, and a best interest
standard on all advice and recommendations with respect to the exercise
of any life insurance policy option or amendment - requires extensive
contact and information gathering on the part of life insurance agents,
brokers, and life insurers from consumers to properly comply with the
regulation's provisions. The process deters consumers from obtaining
basic term life insurance. This legislation would make the process less
onerous.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.