NY State Senate Bill 2011-S5543

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 04, 2012	referred to insurance
Jun 01, 2011	referred to insurance

2011-S5543 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §3208, Ins L; amd §3450, Pub Health L

2011-S5543 (ACTIVE) - Summary

Relates to payments of commissions for funeral directing.

2011-S5543 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5543

TITLE OF BILL:
An act
to amend the insurance law and the public health law, in relation to
payment of commissions for funeral directing

PURPOSE:
This legislation authorizes insurers to pay commissions to certain
licensed insurance agents on the sale of certain life insurance
policies.

SUMMARY OF PROVISIONS:
Section 1 of the legislation amends section 3208 of the insurance law
to allow insurers to pay commissions to certain licensed insurance
agents on the sale of certain life insurance policies.

Section 2 of the legislation amends section 3450 of the public health
law to prohibit suspension or revocation of a funeral director's
license for accepting a commission, as a licensed insurance agent,
for the sale of certain life insurance policies.

Section 3 of the legislation is the effective date.

JUSTIFICATION:
In virtually all states except New York, consumers have two choices

for preneed funeral funding. Those two choices are a preneed funeral
trust and preneed life insurance. Preneed life insurance funding is
effectively banned in New York because payment of insurance
commissions to funeral directors who are actually licensed insurance
agents is prohibited in New York. Consequently, consumers are
denied the freedom to choose which funding option best suits their
personal needs when prearranging a funeral.

There is no compelling reason to restrict the payment of commissions
to funeral directors that are properly licensed to sell life
insurance in NYS. In addition to providing consumers with the freedom
to choose different funding options, this legislation offers other
benefits to consumers in NYS. In situations where the consumer cannot
pay the full cost of a funeral in advance, insurance products can
provide immediate first-dollar coverage for the full amount of the
funeral whereas trust funds must accumulate. In addition, Medicaid
and Social Security Supplemental Income (SSI) programs both recognize
and promote use of life insurance as an appropriate vehicle to spend
down assets when applying for Medicaid or SSI benefits (the current
system in NYS effectively denies New York consumers this option).

In addition to the consumer benefits, this legislation also benefits
the State since under the current system insurance premium tax
dollars and insurance licensing fees paid to the State are lost.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None.


EFFECTIVE DATE:
This act shall take effect immediately, with provisions.

2011-S5543 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5543

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              June 1, 2011
                               ___________

Introduced  by Sen. FLANAGAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law and the public health law, in relation
  to payment of commissions for funeral directing

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 2 of subsection (d) of section 3208 of the insur-
ance  law,  as amended by chapter 557 of the laws of 2001, is amended to
read as follows:
  (2) pay any such benefit or any part thereof to any  funeral  director
or  funeral  directing  concern or other person engaged in such trade or
business or to any official or designated group  of  them,  without  the
consent  of  the  person or persons entitled to such benefits, or to pay
any commission or other consideration to any funeral director or funeral
directing concern or employee thereof THAT IS NOT LICENSED  PURSUANT  TO
ARTICLE  TWENTY-ONE  OF  THIS  CHAPTER  to induce such person to sell or
offer to sell any contract or policy of insurance designated or marketed
as payable for funeral or burial expenses upon the death of the insured;
or
  S 2. Paragraph (l) of subdivision 1 of  section  3450  of  the  public
health law, as amended by chapter 557 of the laws of 2001, is amended to
read as follows:
  (l)  has paid, given, has caused to be paid or given or offered to pay
or to give to any person a commission or  other  valuable  consideration
for  the  solicitation or procurement, either directly or indirectly, of
funeral patronage, or has accepted any consideration (including  without
limitation a commission, rebate, or discount or direct or indirect price
reduction on merchandise from the current value thereof) from any finan-
cial  institution  or  trust  company,  or  agent thereof, with whom the
funeral director deposits funds paid for funeral services in advance  of
need  pursuant to subdivision one of section four hundred fifty-three of

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11010-01-1

S. 5543                             2

the general business law, or has accepted any consideration  ([including
without  limitation a commission or gift] EXCLUDING A COMMISSION AUTHOR-
IZED PURSUANT TO ARTICLE TWENTY-ONE  OF  THE  INSURANCE  LAW)  from  any
insurer  or  agent  thereof,  to  sell, offer or promote the sale of any
policy of insurance payable, expressly or as marketed, at the  death  of
the insured for funeral or burial expenses;
  S  3.  This  act shall take effect immediately; provided, however that
the amendments to paragraph 2 of subsection (d) of section 3208  of  the
insurance  law  made  by  section  one of this act and the amendments to
paragraph (l) of subdivision 1 of section 3450 of the public health  law
made  by section two of this act shall not affect the expiration of such
paragraphs and shall be deemed to expire therewith.

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Senate Bill S5543

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Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

2011-S5543 (ACTIVE) - Details

2011-S5543 (ACTIVE) - Summary

2011-S5543 (ACTIVE) - Sponsor Memo

2011-S5543 (ACTIVE) - Bill Text download pdf

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Sponsored By

John J. Flanagan

Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

2011-S5543 (ACTIVE) - Details

2011-S5543 (ACTIVE) - Summary

2011-S5543 (ACTIVE) - Sponsor Memo

2011-S5543 (ACTIVE) - Bill Text download pdf

Comments