S05028 Summary:

BILL NOS05028
 
SAME ASNo same as
 
SPONSORSEWARD
 
COSPNSR
 
MLTSPNSR
 
Amd S3213, Ins L
 
Relates to settlement options for life insurance policies, requires life insurers to provide certain explanations to beneficiaries of such policies.
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S05028 Actions:

BILL NOS05028
 
05/02/2011REFERRED TO INSURANCE
06/01/20111ST REPORT CAL.899
06/02/20112ND REPORT CAL.
06/06/2011ADVANCED TO THIRD READING
06/13/2011PASSED SENATE
06/13/2011DELIVERED TO ASSEMBLY
06/13/2011referred to insurance
01/04/2012died in assembly
01/04/2012returned to senate
01/04/2012REFERRED TO INSURANCE
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S05028 Floor Votes:

There are no votes for this bill in this legislative session.
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S05028 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5028
 
                               2011-2012 Regular Sessions
 
                    IN SENATE
 
                                       May 2, 2011
                                       ___________
 
        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 disclosure related  to
          the settlement options for life insurance
 
          The  People of the State of New York, represented in Senate and Assem-

        bly, do enact as follows:
 
     1    Section 1. Section 3213 of the insurance law is  amended  to  read  as
     2  follows:
     3    §  3213.  Payment  of  proceeds. (a) Where the proceeds of a policy of
     4  life insurance delivered or issued for delivery in this state are  paya-
     5  ble, according to its terms, to two or more beneficiaries without desig-
     6  nation of their respective interests, the proceeds shall be paid to such
     7  beneficiaries in equal portions.
     8    (b)  (1)  At the time a claim is made, a life insurer shall provide to
     9  the beneficiary of  a  policy  of  life  insurance  written  information
    10  describing  the settlement options available under the policy and how to
    11  obtain specific details relevant to the options.
    12    (2)(A) For the purposes of this paragraph, the  term  "retained  asset

    13  account"  means any mechanism whereby the settlement of proceeds payable
    14  under a life insurance policy is accomplished by the life insurer or  an
    15  entity acting on behalf of the life insurer placing the proceeds into an
    16  account  with check or draft writing privileges where those proceeds are
    17  retained by the life insurer pursuant to a  supplementary  contract  not
    18  involving annuity benefits.
    19    (B)  If  the  life  insurer  settles benefits through a retained asset
    20  account, such insurer shall provide the beneficiary with a  supplemental
    21  contract  that  clearly  describes the rights of the beneficiary and the
    22  obligations of the life insurer  under  the  supplemental  contract.  In
    23  addition,  the  following  written  disclosures shall be provided to the

    24  beneficiary before a retained asset account is established:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10607-02-1

        S. 5028                             2
 
     1    (i) a statement that payment of the  full  benefit  amount  is  accom-
     2  plished by delivery of a draft book or check book;
     3    (ii)  a statement that one draft or check may be written to access the
     4  entire amount, including interest, of the retained asset account at  any
     5  time;
     6    (iii)  whether  other available settlement options are preserved until
     7  the entire balance is withdrawn or the  balance  drops  below  the  life

     8  insurer's minimum balance requirements;
     9    (iv)  a statement identifying the account as either a checking account
    10  or a draft account and an explanation of how the account works;
    11    (v) information about the account services provided and contact infor-
    12  mation where the beneficiary may request and obtain more  details  about
    13  such services;
    14    (vi) a description of fees charged, if applicable;
    15    (vii)  information relating to the frequency of statements showing the
    16  current account balance, the interest credited, drafts or  checks  writ-
    17  ten, and any other account activity;
    18    (viii)  information regarding the minimum interest rate to be credited
    19  to the account and how the actual interest rate will be determined;

    20    (ix) a statement that the interest earned on the account may be  taxa-
    21  ble;
    22    (x)  a  statement  that  retained asset account funds held by the life
    23  insurer are not insured by the federal deposit insurance corporation but
    24  are guaranteed by the state guaranty association. The beneficiary should
    25  be advised to contact the  national  organization  of  life  and  health
    26  insurance guaranty associations to learn more about the coverage limita-
    27  tions to the account under a state guaranty association; and
    28    (xi)  a  description  of  the life insurer's policy regarding retained
    29  asset accounts that become inactive.
    30    § 2. This act shall take effect on the one hundred eightieth day after
    31  it shall have become a law.
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