S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2655
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 20, 2017
                                ___________
 
 Introduced  by M. of A. STECK -- read once and referred to the Committee
   on Insurance
 
 AN ACT to amend the insurance law, in relation  to  the  replacement  of
   individual  life insurance policies or individual annuity contracts of
   any insurer
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  section  heading and subsections (a), (b) and (c) of
 section 2123 of the insurance law, subsection (a) as amended by  section
 37-a  of  part  D of chapter 56 of the laws of 2013, subsections (b) and
 (c) as amended by chapter 540 of the laws of 1996, are amended  to  read
 as follows:
   Misrepresentations[,]   AND   misleading  statements  [and  incomplete
 comparisons].
   (a) (1) No agent or representative of any insurer  or  health  mainte-
 nance  organization  authorized  to  transact  life,  accident or health
 insurance or health maintenance organization  business  in  this  state,
 insurance  broker,  person  who  has  received a grant from and has been
 certified by the health benefit exchange established pursuant to section
 1311 of the Affordable Care Act, 42 U.S.C. § 18031, to act as a  naviga-
 tor,  including  any  person employed by a certified navigator, or other
 person, firm, association or corporation, shall issue  or  circulate  or
 cause  or permit to be issued or circulated, any illustration, circular,
 statement or memorandum misrepresenting the terms,  benefits  or  advan-
 tages  of  any policy or contract of life, accident or health insurance,
 any annuity contract or any health  maintenance  organization  contract,
 delivered or issued for delivery or to be delivered or issued for deliv-
 ery,  in  this  state,  or  shall make any misleading estimate as to the
 dividends or share of surplus or additional amounts to  be  received  in
 the  future  on  such  policy  or  contract,  or shall make any false or
 misleading statement as to the dividends or share of  surplus  or  addi-

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

                                                            LBD04757-01-7

 A. 2655                             2
 
 tional amounts previously paid by any such insurer or health maintenance
 organization  on  similar  policies  or  contracts,  or  shall  make any
 misleading representation, or any misrepresentation, as to the financial
 condition  of any such insurer or health maintenance organization, or as
 to the legal reserve system upon which such insurer  or  health  mainte-
 nance organization operates.
   (2) No such person, firm, association or corporation shall make to any
 person  or  persons  any incomplete [comparison] OR MISLEADING REPRESEN-
 TATION of any such policies or contracts of any  insurer,  insurers,  or
 health maintenance organization, for the purpose of inducing, or tending
 to  induce,  such  person  or persons to lapse, forfeit or surrender any
 insurance policy or health maintenance organization contract.
   (3) Any replacement of individual life insurance policies or  individ-
 ual  annuity  contracts of an insurer by an agent, representative of the
 same or different insurer or broker shall conform to  standards  promul-
 gated  by  regulation  by  the  superintendent. Such regulation shall BE
 CONSISTENT, TO THE GREATEST EXTENT PRACTICABLE AND IN THE PUBLIC  INTER-
 EST,  WITH  THE  REPLACEMENTS REGULATION ADOPTED BY THE NATIONAL ASSOCI-
 ATION OF INSURANCE COMMISSIONERS, AS AMENDED  FROM  TIME  TO  TIME,  AND
 SHALL ALSO:
   (A) specify what constitutes the replacement of a life insurance poli-
 cy or annuity contract and the proper disclosure and notification proce-
 dures to replace a policy or contract;
   (B)  require  notification  of the proposed replacement to the insurer
 whose policies or contracts are intended to be replaced; AND
   (C) [require the timely exchange of illustrative and cost  information
 required  by section three thousand two hundred nine of this chapter and
 necessary for completion of a comparison of the  proposed  and  replaced
 coverage; and
   (D)] provide for a sixty-day period following issuance of the replace-
 ment policies or contracts during which the policy or contract owner may
 return  the policies or contracts and reinstate the replaced policies or
 contracts.
   (b) [Any comparison of the policies or contracts of any such  insurer,
 insurers  or  health  maintenance  organization shall be deemed to be an
 incomplete comparison if it does not conform to all the requirements for
 comparisons established by regulation.
   (c)] In the determination, judicial or otherwise, of  the  incomplete-
 ness or misleading character of any such [comparison] REPRESENTATION, it
 shall  not  be  presumed  that  the  insured knew or knows of any of the
 provisions, terms or benefits  contained  in  any  insurance  policy  or
 health maintenance organization contract.
   §  2.  The section heading and subsections (a), (b) and (c) of section
 4226 of the insurance law, paragraph 6 of subsection  (a)  as  added  by
 chapter 616 of the laws of 1997, are amended to read as follows:
   Misrepresentations[,]   AND   misleading  statements  [and  incomplete
 comparisons] by insurers. (a) No insurer authorized to do in this  state
 the business of life, or accident and health insurance, or to make annu-
 ity contracts shall:
   (1)  issue or circulate, or cause or permit to be issued or circulated
 on its behalf,  any  illustration,  circular,  statement  or  memorandum
 misrepresenting the terms, benefits or advantages of any of its policies
 or contracts;
   (2)  make  any  estimate of the dividends or share of surplus or addi-
 tional amounts to be received on such policies or contracts;

 A. 2655                             3
 
   (3) make any false or misleading statement of the dividends  or  share
 of  surplus  or  additional  amounts paid by any such insurer on similar
 policies or contracts;
   (4)  make  any  misleading representation, or any misrepresentation of
 the financial condition of any such insurer  or  of  the  legal  reserve
 system upon which it operates; [or]
   (5)  make  or deliver to any person or persons any incomplete [compar-
 ison of] OR MISLEADING REPRESENTATION REGARDING  any  such  policies  or
 contracts for the purpose of inducing, or tending to induce, such person
 or  persons  to  lapse,  forfeit  or  surrender  any insurance policy or
 contract[.]; OR
   (6) replace the individual life insurance policies or individual annu-
 ity contracts of an insurer by the same  or  different  insurer  without
 conforming to the standards promulgated by regulation by the superinten-
 dent.  Such regulation shall BE CONSISTENT, TO THE GREATEST EXTENT PRAC-
 TICABLE AND IN THE PUBLIC INTEREST,  WITH  THE  REPLACEMENTS  REGULATION
 ADOPTED  BY  THE  NATIONAL  ASSOCIATION  OF  INSURANCE COMMISSIONERS, AS
 AMENDED FROM TIME TO TIME, AND SHALL ALSO:
   (A) specify what constitutes the replacement of a life insurance poli-
 cy or annuity contract and the proper disclosure and notification proce-
 dures to replace a policy or contract;
   (B) require notification of the proposed replacement  to  the  insurer
 whose policies or contracts are intended to be replaced; AND
   (C)  [require the timely exchange of illustrative and cost information
 required by section three thousand two hundred nine of this chapter  and
 necessary  for  completion  of a comparison of the proposed and replaced
 coverage; and
   (D)] provide for a sixty-day period following issuance of the replace-
 ment policies or contracts during which the policy or contract owner may
 return the policies or contracts and reinstate the replaced policies  or
 contracts.
   (b)  [Any  comparison of the policies or contracts of any such insurer
 or insurers shall be deemed to be an incomplete comparison  if  it  does
 not  conform  to all the requirements for comparisons established by the
 superintendent by regulation.
   (c)] In any determination, judicial or otherwise, of  the  incomplete-
 ness  or  misleading  character of any such [comparison or of] represen-
 tation, it shall not be presumed that the insured knew or knows  of  any
 of  the  provisions  or  benefits  contained  in any insurance policy or
 contract.
   § 3. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.