S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4434
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 14, 2023
                                ___________
 
 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 maintenance 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
 navigator,  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,  circu-
 lar,  statement  or  memorandum  misrepresenting  the terms, benefits or
 advantages of any policy or contract of life, accident or health  insur-
 ance,  any  annuity  contract  or  any  health  maintenance organization
 contract, delivered or issued for delivery or to be delivered or  issued
 for delivery, 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-
 tional amounts previously paid by any such insurer or health maintenance
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06658-01-3
              

 A. 4434                             2
 
 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. 4434                             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.