New York State Assembly

 
•  Summary 
 
•  Actions 
 
•  Committee Votes 
 
•  Floor Votes 
 
•  Memo 
 
•  Text 
 
•  LFIN 
 
•  Chamber Video/Transcript 

A07701 Summary:

A07701 Actions:

A07701 Committee Votes:

Committee:INSURANCE   Chair:Cahill      
DATE:05/25/2021AYE/NAY:23/0  Action: Favorable refer to committee Rules        
Cahill
Aye
Blankenbush
Aye
Cook
Aye
Hawley
Aye
Pretlow
Aye
Byrne
Aye
Rivera
Aye
Schmitt
Aye
Cymbrowitz
Aye
Palmesano
Aye
Lavine
Aye
DiPietro
Aye
Steck
Aye
Gandolfo
Excused
Dilan
Aye
Hunter
Aye
Niou
Aye
Rosenthal
Aye
Stern
Aye
McDonald
Aye
Jacobson
Aye
Williams
Aye
Meeks
Aye
Forrest
Excused
Anderson
Aye

Committee:RULES   Chair:Heastie      
DATE:06/01/2021AYE/NAY:30/0  Action: Favorable         
Heastie
Aye
Barclay
Aye
Gottfried
Aye
Hawley
Aye
Nolan
Excused
Giglio
Aye
Weinstein
Aye
Blankenbush
Aye
Pretlow
Aye
Norris
Aye
Cook
Aye
Montesano
Aye
Glick
Aye
Ra
Aye
Aubry
Aye
Brabenec
Aye
Englebright
Aye
Dinowitz
Aye
Colton
Aye
Magnarelli
Aye
Perry
Aye
Paulin
Aye
Peoples-Stokes
Aye
Benedetto
Aye
Lavine
Aye
Lupardo
Aye
Zebrowski
Aye
Thiele
Aye
Braunstein
Aye
Dickens
Aye
Davila
Aye

A07701 Floor Votes:

A07701 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A7701
 
SPONSOR: Hunter

 
TITLE OF BILL:
 
An act to amend the insurance law, in relation to improving insurance
consumer servicing options
 
 
PURPOSE:
 
To modernize the methods of consumer servicing that unauthorized insur-
ers are permitted, in certain circumstances, to use, including tele-
phone, video call, facsimile, web portal, electronic transfer of funds,
or any other electronic means approved by the Superintendent of Finan-
cial Services ("Superintendent").
 
 
SUMMARY OF PROVISIONS:

Section 1. Insurance Law § 1101(b)(2)(C) is amended to provide that the
Superintendent's approval granted pursuant to Insurance Law § 1105 may
authorize transactions involving the continuance or servicing of life
insurance policies or annuity contracts to be effected by an unauthor-
ized insurer from outside New York by telephone, video call, facsimile,
web portal, electronic transfer of funds, or by any other electronic
means approved by the Superintendent, provided that the unauthorized
insurer shall not have any other contact or interaction with a person in
New York other than as specified and in the manner provided in Insurance
Law § 1101(b)(2).
 
Section 2. Insurance Law § 1101(b)(2)(D) is amended to provide that
transactions described in that subparagraph involving the continuance or
servicing of life insurance policies or annuity contracts may be
effected by an unauthorized insurer from outside New York by telephone,
video call, facsimile, web portal, electronic transfer of funds, or by
any other electronic means approved by the Superintendent, provided that
the unauthorized insurer shall not have any other contact or interaction
with a person in New York other than as specified and in the manner
provided in Insurance Law § 1101(b)(2).
 
Section 3. Insurance Law § 1105 is amended to provide that a plan
submitted by an authorized insurer to voluntarily cease maintaining a
license in New York may request that the insurer be permitted to contin-
ue or service a life insurance policy or annuity contract from outside
New York by telephone, video call, facsimile, web portal, electronic
transfer of funds, or by any other electronic means approved by the
Superintendent pursuant to Insurance Law § 1101(b)(2)(C). Section 4. The
bill would take effect immediately.
 
 
JUSTIFICATION:
 
Insurance Law § 1101(b)(1) identifies acts that constitute doing an
insurance business in New York and that therefore may only be done by an
insurer licensed to do an insurance business in New York. Insurance Law
§ 1101(b)(2)(C) provides a limited exception for transactions involving
the continuance or servicing of (individual or group) life insurance
policies or annuity contracts lawfully issued or delivered in New York
by an authorized insurer and occurring subsequent to the termination of
such insurer's authority to do an insurance business in New York. Howev-
er, the transactions may only be effected by mail.  Insurance Law §
1101(b)(2)(D) provides a limited exception for transactions with respect
to (individual or group) life insurance policies or annuity contracts
lawfully issued without New York occurring subsequent to issue, if, at
the time of issue, such policies or contracts covered subjects of insur-
ance or risks not resident or located in New York. However, the trans-
actions may only be effected by mail.

Whereas the current exemptions authorize continuance and servicing by
mail only, this bill would authorize continuance and servicing by tele-
phone, video call, facsimile, web portal, electronic transfer of funds,
or by any other electronic means approved by the Superintendent. It
would apply to individual and group life insurance policies and annuity
contracts.
 
This bill is narrowly drafted to modernize the methods of post-issuance
continuance and servicing that unauthorized insurers may use in certain
limited cases. This bill is not intended to expand the ability of unau-
thorized insurers, or any persons or entities acting on their behalf, to
sell, solicit, negotiate; deliver, or issue for delivery in New York any
insurance policy or contract. By way of example, here are some instances
in which the bill will benefit New York consumers:
 
1. A resident of another state moves to New York. While residing in the
other state, the individual was issued a life insurance policy, annuity
contract, or group life insurance or annuity certificate in the other
state by an insurer licensed in the other state but not licensed in New
York. The revisions will ensure that the "new" New York resident will
not lose access to servicing options offered by the unlicensed insurer
such as servicing by telephone, video call, facsimile, web portal, elec-
tronic transfer of funds, or other electronic means approved by the
Superintendent.
 
2. A New York resident is the named beneficiary under a life insurance
policy, annuity contract, or group life insurance or annuity certificate
issued in another state to a resident of the other state by an insurer
licensed in the other state but not licensed in New York. The revisions
will ensure that the New York beneficiary can access methods of facili-
tating payment of the claim offered by the unlicensed insurer, including
by telephone, video call, facsimile, web portal, electronic transfer of
funds, or other electronic means approved by the Superintendent.
 
3. A New York resident owns a life insurance policy, annuity contract,
or group life insurance or annuity certificate issued in New York by an
insurer that was licensed in New York at the time the insurer issued the
policy or contract. Subsequently, the insurer terminates its license to
do business in New York. The revisions expand the scope of the with-
drawal plan, pursuant to Insurance Law § 1105, so that the Superinten-
dent may approve continuance and servicing of the New York contracts by
methods including telephone, video call, facsimile, web portal, elec-
tronic transfer of funds, or other electronic means approved by the
Superintendent. This narrow legislative change does not permit any
solicitation or sales in New York by an unauthorized insurer.
 
 
LEGISLATIVE HISTORY:
 
This is a new bill.
 
 
FISCAL IMPLICATIONS:
None.
 
 
EFFECTIVE DATE:
This act shall take effect immediately.

A07701 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7701
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 20, 2021
                                       ___________
 
        Introduced by M. of A. HUNTER -- read once and referred to the Committee
          on Insurance
 
        AN  ACT  to  amend the insurance law, in relation to improving insurance
          consumer servicing options
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subparagraph  (C)  of  paragraph  2  of subsection (b) of
     2  section 1101 of the insurance law is amended to read as follows:
     3    (C) transactions involving the continuance or  servicing  of  life  or
     4  accident  and  health  insurance  policies or annuity contracts lawfully
     5  issued or delivered in this state by an authorized insurer and occurring
     6  subsequent to the termination of  such  insurer's  authority  to  do  an
     7  insurance  business  in  this  state. Notwithstanding the foregoing, the
     8  superintendent's approval granted pursuant to section one  thousand  one
     9  hundred  five  of  this article may authorize transactions involving the
    10  continuance or servicing of life insurance policies or annuity contracts
    11  to be effected from outside this state by telephone, video call, facsim-
    12  ile, web portal, electronic transfer of funds, or by any other electron-
    13  ic means approved by the superintendent, provided that the insurer shall
    14  not have any other contact or interaction with a person  in  this  state
    15  other than as specified and in the manner provided in this paragraph;
    16    § 2. Subparagraph (D) of paragraph 2 of subsection (b) of section 1101
    17  of the insurance law is amended to read as follows:
    18    (D)  transactions  with  respect  to  policies  or  annuity  contracts
    19  lawfully issued without this state occurring subsequent to issue, if, at
    20  the time of issue, such policies or contracts covered subjects of insur-
    21  ance or risks not resident or located in this  state.    Notwithstanding
    22  the foregoing, transactions described in this subparagraph involving the
    23  continuance or servicing of life insurance policies or annuity contracts
    24  may  be  effected  from  outside  this  state  by telephone, video call,
    25  facsimile, web portal, electronic transfer of funds,  or  by  any  other
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10447-03-1
        A. 7701                             2
 
     1  electronic  means  approved  by  the  superintendent,  provided that the
     2  insurer shall not have any other contact or interaction with a person in
     3  this state other than as specified and in the manner  provided  in  this
     4  paragraph;
     5    § 3. Section 1105 of the insurance law is amended to read as follows:
     6    §  1105.  Voluntarily  ceasing to maintain license. When an authorized
     7  insurer proposes to cease to maintain its existing licensing  status  in
     8  this  state,  the  insurer  shall at least forty-five days prior to such
     9  proposed action submit to the  superintendent  a  plan  to  protect  the
    10  interests  of  the  people of this state. Such proposed action shall not
    11  become effective without the approval of such plan  by  the  superinten-
    12  dent. The plan shall include requirements and procedures for meeting the
    13  insurer's  contractual obligations, providing security protection in the
    14  event of a subsequent insolvency, and meeting any  applicable  statutory
    15  obligations, including its obligations pursuant to articles fifty-three,
    16  fifty-four and fifty-five of this chapter. Such plan shall be in compli-
    17  ance  with  a regulation to be promulgated by the superintendent. A plan
    18  may request that the insurer be permitted to continue or service a  life
    19  insurance  policy  or  annuity contract from outside this state by tele-
    20  phone, video call, facsimile, web portal, electronic transfer of  funds,
    21  or  by  any  other  electronic  means  as approved by the superintendent
    22  pursuant to subparagraph (C) of  paragraph  two  of  subsection  (b)  of
    23  section  one  thousand  one  hundred  one  of  this article. In order to
    24  protect the interests of the people of this  state,  the  superintendent
    25  may  require  the  deposit of securities in this state, in trust, in the
    26  name of the superintendent.
    27    § 4. This act shall take effect immediately.

A07701 LFIN:

 
NO LFIN

A07701 Chamber Video/Transcript: