BILL NUMBER: S8097
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend chapter 394 of the laws of 2018 amending the insurance
law relating to the implementation of a valuation manual and relating to
directing the department of financial services to study the impact of
the implementation of such valuation manual, in relation to the time
period for submitting reports and making such provisions permanent
 
PURPOSE OR GENERAL IDEA OF BILL:
To make permanent the provisions of Chapter 294 of the laws of 2018
related to principle-based reserving for life insurance policies and
annuity contracts.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends Chapter 394 of the Laws of 2018 to repeal the 2028
sunset date and to repeal the requirement for the Department of Finan-
cial Services to issue a final principle-based reserving report in 2027.
 
JUSTIFICATION:
In 2009, the National Association of Insurance Commissioners (NAIC)
adopted a new method for establishing life insurance reserves known as
principle-based reserving (PBR), and in 2013 various states began enact-
ing laws to authorize the use of PBR. When Chapter 294 of the laws of
2018 was enacted, life insurers operating in New York were calculating
their required reserves for life insurance policies and annuity
contracts using pre-set formulas in New York Insurance Law section 4217.
Since the enactment of Chapter 294 of 2018, the NAIC has made princi-
ple-based reserving an accreditation standard. There is no reason for
the sunset to exist, nor for the Department of Financial Services to
issue a third report on PBR following its 2023 and 2025 reports.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.