NY State Senate Bill 2017-S1477

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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to insurance
Jan 09, 2017	referred to insurance

2017-S1477 (ACTIVE) - Details

See Assembly Version of this Bill:: A2586
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §4217, Ins L
Versions Introduced in Other Legislative Sessions:: 2015-2016: S7535, A10582
2019-2020: S3519
2021-2022: S4043

2017-S1477 (ACTIVE) - Summary

Relates to requirements imposed for the valuation of the reserve liabilities of life insurance policies and contracts.

2017-S1477 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S1477

 TITLE OF BILL :

An act to amend the insurance law, in relation to the valuation of
life insurance policies and contracts

 PURPOSE :

The purpose of this bill is to amend § 4217 of the insurance law (the
standard valuation law for life insurance) to require that any
additional standards relating to this section proposed for imposition
by the Department of Financial Services should be prescribed by
regulation.

 SUMMARY OF PROVISIONS :

This bill amends § 4217(a)(1), (e)(1), (e)(4)(C) and (f)(4) of the
insurance law to refine the rules related to the submission of
reserving reports that are required under current law from life
company appointed actuaries. The amendments would: 1) permit the
appointed actuary to aggregate life, annuity and health business for
purposes of performing asset adequacy testing in support of an
actuarial opinion on reserve adequacy; and 2) restrict the
Superintendent from imposing any assumptions or other additional
standards to be used by the appointed actuary in forming his actuarial

opinion, beyond those prescribed by regulation.

 JUSTIFICATION :

Additional actuarial standards that go beyond the current law should
only be imposed on life insurance companies via regulation, subject to
proposal and comment, and not by arbitrary guidance. Such guidance is
currently imposed on life companies annually by the Department of
Financial Services without any requirement that it be published for
feedback and comment before imposition. The requisite transparency
established in this bill will result in any additional standards or
assumptions developed by the Department being proposed for public
comment and feedback, subject to the state administrative procedures
act (SAPA), before implementation. This is especially important since
subjective, overly-conservative reserving requirements, which can
currently be imposed via fiat through mere guidance, can result in
higher product pricing and less product availability for life
insurance products sold in New York.

Despite their importance, life insurance products are not required as
a matter of law or policy, as is the case with other types of
insurance products such as automobile or homeowners insurance. People
who purchase life insurance products are choosing to do so with
discretionary income and competing priorities and are also often
lacking a clear understanding of the importance of the financial
protection the products provide. It is in the interest of this state
to assist in the promotion of these products, at affordable prices,
which provide its citizens with the tools to protect their own
financial futures. In turn, the purchase of these products by the
citizens of this state alleviates or reduces their need for public
assistance in times of need, which decreases financial stress on the
state.

 LEGISLATIVE HISTORY :

S.7535 of 2016.

 EFFECTIVE DATE :
Immediately.

2017-S1477 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1477
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              January 9, 2017
                                ___________
 
 Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to the valuation of  life
   insurance policies and contracts
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subsection (a) of section 4217 of the insur-
 ance law, as amended by chapter 22 of the laws of 1994,  is  amended  to
 read as follows:
   (1)  The  superintendent  shall  annually [value, or] cause EVERY LIFE
 INSURANCE COMPANY DOING BUSINESS IN THIS STATE to [be valued,] VALUE the
 reserve liabilities (hereinafter called reserves) for all ITS  outstand-
 ing  insurance  policies  and contracts [of every life insurance company
 doing business in this state], except that, in  the  case  of  an  alien
 company, such valuation shall be limited to its United States business[,
 and  may].  THE  SUPERINTENDENT  SHALL  certify  the  amount of any such
 reserves, specifying the mortality table or tables,  rate  or  rates  of
 interest  and  methods  (net  level premium method or other) used in the
 calculation of such reserves, UNLESS THE SUPERINTENDENT DETERMINES  THAT
 THE MEMORANDUM PREPARED PURSUANT TO PARAGRAPH THREE OF SUBSECTION (E) OF
 THIS  SECTION  TO  SUPPORT THE ACTUARIAL OPINION OF RESERVES REQUIRED BY
 PARAGRAPH ONE OF SUBSECTION (E) OF THIS SECTION FAILS TO MEET THE STAND-
 ARDS PRESCRIBED BY REGULATION.    In  calculating  such  reserves,  [the
 superintendent]  LIFE  INSURANCE  COMPANIES  may  use  group methods and
 approximate averages for fractions of a year or otherwise.
   § 2. Paragraph 1 of subsection (e) of section 4217  of  the  insurance
 law,  as  added by chapter 22 of the laws of 1994, is amended to read as
 follows:
   (1) General. Every life insurance company doing business in this state
 shall annually submit the opinion of a qualified actuary as  to  whether
 the reserves and related actuarial items held in support of the policies
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01966-01-7

 S. 1477                             2
 
 and contracts specified by the superintendent by regulation are computed
 appropriately,  are  based  on  assumptions  which  satisfy  contractual
 provisions, are consistent with prior reported amounts and  comply  with
 applicable  laws of this state. The superintendent [by regulation] shall
 define the specifics of this opinion and add any other items  deemed  to
 be necessary to its scope SOLELY BY REGULATION.
   § 3. Subparagraph (C) of paragraph 4 of subsection (e) of section 4217
 of  the  insurance  law,  as added by chapter 22 of the laws of 1994, is
 amended to read as follows:
   (C) The opinion shall be based on standards adopted from time to  time
 by the Actuarial Standards Board and on such additional standards as the
 superintendent  may  by regulation prescribe.   THE SUPERINTENDENT SHALL
 NOT PRESCRIBE ANY ASSUMPTIONS OR OTHER ADDITIONAL STANDARDS TO  BE  USED
 BY   THE  QUALIFIED  ACTUARY  WHEN  FORMING  THE  OPINION  BEYOND  THOSE
 PRESCRIBED BY REGULATION.
   § 4. Paragraph 4 of subsection (f) of section 4217  of  the  insurance
 law,  as  added by chapter 22 of the laws of 1994, is amended to read as
 follows:
   (4) [Without the specific approval of the  superintendent  subject  to
 such  conditions  as  he may prescribe and as provided by regulation, an
 insurer shall not] AN INSURER MAY aggregate the reserves referred to  in
 [two  or  more  of paragraph] PARAGRAPHS one, two [or] AND three of this
 subsection. [Such regulation may prescribe the  conditions  under  which
 the  valuation  of  two  or more classes of business of insurance or the
 valuation of all of its insurance business to which this section applies
 may be combined.] THE SUPERINTENDENT MAY, SOLELY BY REGULATION,  REQUIRE
 INSURERS  TO  SHOW  THE  RESULTS  OF  ASSET  ADEQUACY ANALYSIS AS TO THE
 ADEQUACY OF RESERVES REFERRED TO IN PARAGRAPHS ONE,  TWO  AND  THREE  OF
 THIS SUBSECTION SEPARATELY IN THE ACTUARIAL MEMORANDUM PREPARED PURSUANT
 TO  PARAGRAPH  THREE  OF  SUBSECTION  (E)  OF  THIS SECTION, BUT MAY NOT
 PROHIBIT INSURERS FROM AGGREGATING THE RESERVES  REFERRED  TO  IN  PARA-
 GRAPHS ONE, TWO AND THREE OF THIS SUBSECTION FOR THE PURPOSES OF MEETING
 THE  MINIMUM  STANDARDS  FOR  THE  VALUATION OF LIFE INSURANCE POLICIES,
 ANNUITIES AND GUARANTEED INVESTMENT CONTRACTS, AND INDIVIDUAL AND  GROUP
 ACCIDENT AND HEALTH INSURANCE POLICIES.
   § 5. This act shall take effect immediately.

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Senate Bill S1477

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

2017-S1477 (ACTIVE) - Details

2017-S1477 (ACTIVE) - Summary

2017-S1477 (ACTIVE) - Sponsor Memo

2017-S1477 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1477

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Sponsored By

James L. Seward

Archive: Last Bill Status - In Senate Committee Insurance Committee

2017-S1477 (ACTIVE) - Details

2017-S1477 (ACTIVE) - Summary

2017-S1477 (ACTIVE) - Sponsor Memo

2017-S1477 (ACTIVE) - Bill Text download pdf

Comments