NY Insurance Law
Article 42, Life Inusrance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies
Section
4202. Capital and surplus requirements of life insurance
companies.
4203. Transfer of shares of domestic life insurance company.
4204. Financial requirements for the organization of stock
accident and health insurance companies and stock
legal services insurance companies.
4205. Life, accident and health, and legal services insurance
companies; engaging in other business.
4206. Deposits by life, accident and health, and legal
services insurance companies.
4207. Dividends to shareholders of life, and accident and
health insurance companies.
4208. Financial and additional requirements for the
organization of mutual life, accident and health, and
legal services insurance companies.
4209. Mutual life insurance companies, mutual accident and
health insurance companies; assessments.
4210. Election of directors of domestic mutual life insurance
companies.
4211. Election of directors of domestic stock life insurance
companies.
4212. Stock life insurance companies; voting power of
policyholders.
4213. Industrial life insurance.
4214. Industrial accident and industrial health insurance.
4215. Contracts with industrial life insurance agents;
prohibitions.
4216. Group life insurance; premium requirements; notice of
conversion; filing of compensation.
4217. Valuation of insurance policies and contracts.
4218. When actual premium is less than net premium; minimum
reserve.
4219. Limitation on accumulation of surplus of life insurance
companies.
4220. Life insurance and annuities; nonforfeiture benefits
under defaulted contracts.
4221. Standard nonforfeiture law.
4222. Policy loans.
4223. Standard nonforfeiture law for annuities.
4224. Life, accident and health insurance; discrimination and
rebating; prohibited inducements and interdependent
sales.
4225. Domestic life insurance companies; discrimination as to
brokers.
4226. Misrepresentations, misleading statements and
incomplete comparisons by insurers.
4228. Life insurance and annuity business; limitations of
expenses.
4230. Salaries and pensions to officers and employees.
4231. Policyholder`s participation in surplus of life
insurance companies.
4232. Amounts credited on certain contracts or life insurance
policies.
4233. Annual statements of life insurance companies.
4235. Group accident and health insurance.
4236. Joint underwriting of group health insurance for
persons aged sixty-five and over.
4237. Blanket accident and health insurance.
4237-a. Stop-loss insurance.
4238. Group annuity contracts.
4239. Allocation and reporting of income and expenses of life
insurers.
4240. Separate accounts; fixed and variable life insurance
and annuities and funding agreements.
4241. Penalty for violation of filing requirements.
S 4202. Capital and surplus requirements of life insurance companies.
(a) (1) A stock company may be organized as prescribed in section one
thousand two hundred one and subsection (e) of section one thousand one
hundred two of this chapter and licensed to do the business of life
insurance as specified in paragraph one of subsection (a) of section one
thousand one hundred thirteen of this chapter with a paid-in capital of
at least two million dollars and a paid-in initial surplus at least
equal to the greater of four million dollars or two hundred percent of
its capital, and it may in addition do any one or more of the kinds of
insurance business specified in paragraphs two, three and twenty-nine of
subsection (a) of section one thousand one hundred thirteen of this
chapter, without having additional capital or surplus.
(2) Every such company shall at all times maintain a minimum capital
of two million dollars, except that every such company
(A) if organized prior to April fourth, nineteen hundred sixty-two
shall at all times maintain a minimum capital of at least three hundred
thousand dollars and a surplus at least equal to fifty percent of such
capital; and
(B) if organized on or after April fourth, nineteen hundred sixty-two
and prior to September first, nineteen hundred sixty-six shall at all
times maintain a minimum capital of at least five hundred thousand
dollars and a surplus at least equal to fifty percent of such capital;
and
(C) if organized on or after September first, nineteen hundred
sixty-six and prior to September first, nineteen hundred seventy-nine
shall at all times maintain a minimum capital of at least one million
dollars and a surplus at least equal to fifty percent of such capital.
(b) (1) The superintendent may permit the organization, in conformity
with section one thousand two hundred one and subsection (e) of section
one thousand one hundred two of this chapter, of a stock company to do
on a restricted plan any one or more of the kinds of insurance business
specified in paragraphs one, two and three of subsection (a) of section
one thousand one hundred thirteen of this chapter, with a minimum
paid-in capital and a minimum paid-in surplus in an amount prescribed by
him, but not less than a paid-in capital of two hundred thousand dollars
and a paid-in surplus at least equal to one hundred thousand dollars
provided the superintendent, after investigation, finds that the
restricted plan is sound, economical and practical and that there is a
public demand for such insurance or annuity contracts.
(2) Every such company shall at all times maintain such prescribed
minimum capital except that every such company organized prior to April
fourth, nineteen hundred sixty-two shall at all times maintain a minimum
paid-in capital and a minimum paid-in surplus in an amount prescribed by
the superintendent, but not less than a paid-in capital of one hundred
thousand dollars and a paid-in surplus at least equal to fifty thousand
dollars.
S 4203. Transfer of shares of domestic life insurance company. (a) No
shareholder of a domestic life insurance company shall vote his shares
until the earlier of (i) ten days after written notice of acquisition
thereof has been filed with the superintendent, or (ii) one year after
the date of acquisition thereof.
(b) This section shall apply only to shares acquired after such a
company has been licensed under this chapter.
S 4204. Financial requirements for the organization of stock accident
and health insurance companies and stock legal services insurance
companies.
(a) (1) A stock company may be organized in the manner prescribed in
section one thousand two hundred one and subsection (e) of section one
thousand one hundred two of this chapter and licensed to do only the
kind of insurance business specified in item (i) of paragraph three of
subsection (a) of section one thousand one hundred thirteen of this
chapter, with a paid-in capital of not less than one hundred thousand
dollars, and a paid-in surplus at least equal to fifty percent of its
capital. Every such company shall at all times thereafter maintain a
minimum capital of one hundred thousand dollars.
(2) Notwithstanding the foregoing, any such stock company initially
licensed on or after July first, nineteen hundred eighty-two shall have
a paid-in capital of not less than two hundred thousand dollars and a
paid-in surplus at least equal to fifty percent of its capital and shall
at all times maintain a minimum capital of at least two hundred thousand
dollars.
(b) (1) Any company organized under the provisions of subsection (a)
of this section may be licensed to do the kind of insurance business
specified in item (ii) of paragraph three and paragraph twenty-nine of
subsection (a) of section one thousand one hundred thirteen of this
chapter, if it has a paid-in capital of not less than one hundred fifty
thousand dollars, and a paid-in initial surplus at least equal to fifty
percent of its capital. Every such company shall at all times maintain a
minimum capital of one hundred fifty thousand dollars.
(2) Notwithstanding the foregoing provisions of this subsection, any
such company initially licensed on or after July first, nineteen hundred
eighty-two shall have a paid-in capital of not less than three hundred
thousand dollars and a paid-in surplus at least equal to fifty percent
of its capital and shall at all times maintain a minimum capital of at
least three hundred thousand dollars.
(c) A stock company may be organized to do only the kind of insurance
specified in paragraph twenty-nine of subsection (a) of section one
thousand one hundred thirteen of this chapter if it complies with the
financial requirements of paragraph one of subsection (a) of this
section.
S 4205. Life, accident and health, and legal services insurance
companies; engaging in other business. No life insurance company
licensed to do a life insurance business in this state shall do any
business other than the kinds of business specified in paragraphs one,
two, three and twenty-nine of subsection (a) of section one thousand one
hundred thirteen, sections one thousand one hundred fourteen, one
thousand seven hundred fourteen and three thousand two hundred
twenty-two of this chapter and such other business as is necessarily or
properly incidental thereto. Except as stated in section one thousand
one hundred six of this chapter, this section shall apply to the
business within or without this state of such a foreign life insurance
company and shall apply only to the business within the United States of
such an alien life insurance company.
S 4206. Deposits by life, accident and health, and legal services
insurance companies. Before being licensed to do business, every
domestic life insurance company, every domestic accident and health
insurance company and every domestic legal services insurance company
shall deposit with the superintendent at least one hundred thousand
dollars in securities eligible for deposits, except that every such
company initially licensed on or after July first, nineteen hundred
eighty-two shall make a deposit with the superintendent at least equal
to two hundred percent of the amount required hereinabove.
S 4207. Dividends to shareholders of life, and accident and health
insurance companies. (a) (1) Notwithstanding paragraph two of this
subsection, any domestic stock life insurance company may distribute a
dividend to its shareholders where the aggregate amount of such
dividends in any calendar year does not exceed the lesser of:
(A) ten percent of its surplus to policyholders as of the immediately
preceding calendar year; or
(B) its net gain from operations for the immediately preceding
calendar year, not including realized capital gains.
(2) Except as provided in paragraph one of this subsection, no
domestic stock life insurance company shall distribute any dividend to
its shareholders unless a notice of its intention to declare such
dividend and the amount thereof shall have been filed with the
superintendent not less than thirty days in advance of such proposed
declaration. The superintendent may disapprove such distribution by
giving written notice to such company within thirty days after such
filing that he finds that the financial condition of the company does
not warrant such distribution.
(b) (1) Except as provided in paragraph three hereof, no domestic
stock accident and health insurance company shall declare or distribute
any dividend on its capital stock, except out of earned surplus, as
defined in subsection (a) of section four thousand one hundred five of
this chapter. No such company shall declare or distribute any dividend
to shareholders which, together with all such dividends declared or
distributed by it during the next preceding twelve months, exceeds the
lesser of ten percent of its surplus to policyholders, as shown by its
last statement on file with the superintendent, or one hundred percent
of adjusted net investment income for such period unless, upon prior
application therefor, the superintendent approves a greater dividend
payment based upon his finding that the insurer will retain sufficient
surplus to support its obligations and writings. Within the meaning of
this section, "adjusted net investment income" means net investment
income for the twelve months immediately preceding the declaration or
distribution of the current dividend increased by the excess, if any, of
net investment income over dividends declared or distributed during the
period commencing thirty-six months prior to the declaration or
distribution of the current dividend and ending twelve months prior
thereto; "surplus" means the amount of the insurer`s admitted assets in
excess of its capital and its liabilities; and both "surplus" and
"surplus to policyholders" shall include any voluntary reserves, or any
part thereof, which are not required by law.
(2) If the superintendent finds, after notice to and hearing of such
company, that any such company has distributed any dividend in violation
of this subsection, he may order such company to cease doing any new
business until the amount of such dividend has been restored to such
company. The directors of any such company who vote in favor of the
declaration and distribution of any dividend in violation of this
section shall, in addition to all other liabilities or penalties
prescribed by law, be jointly and severally liable to the creditors,
including policyholder creditors, of such company to the extent of the
dividend so declared and paid, and every shareholder receiving any such
dividend shall be liable to such creditors of such company to the extent
of the dividend received by such shareholder.
(3) Any domestic stock accident and health insurance company may
declare and distribute a stock dividend to its shareholders whenever it
shall have a surplus as defined in paragraph one hereof, in an amount at
least equal to the sum of such dividend and thirty percent of its
unearned premium liability as shown by its last statement on file in the
office of the superintendent and, for such purpose, such company may
increase its capital stock from such surplus in the manner prescribed in
section one thousand two hundred six of this chapter, and it shall
distribute such additional or increased stock to its shareholders in
proportion to the stock held by each, respectively.
(c) Any stock accident and health insurance company authorized to do
business in this state may include in its charter a provision
authorizing the board of directors to permit its policyholders from time
to time to participate in the profits of its operations through the
payment of dividends to policyholders. For the purpose of carrying into
effect any such provision, the board of directors may from time to time
make reasonable classifications of policies. Every such classification
of risks shall be filed with the superintendent and shall not be
effective as to policies issued or delivered in this state unless
approved by the superintendent as fair and equitable and not unfairly
discriminatory. Any such classification approved by the superintendent
shall remain in effect in this state until disapproved by him or until
withdrawn or modified with his approval by the company filing the same.
No dividends to policyholders shall be declared or paid by any such
company except out of its earned surplus, as defined in subsection (a)
of section four thousand one hundred five of this chapter.
S 4208. Financial and additional requirements for the organization of
mutual life, accident and health, and legal services insurance
companies.
(a) (1) A mutual insurance company may be incorporated and licensed
exclusively to do one or more of the kinds of insurance business
specified in paragraphs one, two, three and twenty-nine of subsection
(a) of section one thousand one hundred thirteen of this chapter, upon
compliance with the applicable requirements of section one thousand two
hundred one and subsection (e) of section one thousand one hundred two
of this chapter and subsection (b) of this section.
(2) In this section:
(A) "Initial surplus" means the paid-in initial surplus required
pursuant to paragraph nine of subsection (a) of section one thousand two
hundred one and paragraph one of subsection (e) of section one thousand
one hundred two of this chapter.
(B) "Minimum surplus" means the amount of surplus which such company
shall, after being licensed to do business, at all times maintain
unimpaired.
(C) "Applications" means individual applications for policies of life
insurance, except that in the case of volunteer firemen, it shall also
mean applications for enrollment for coverage to be issued under group
life insurance policies applied for by not less than twenty-five
associations or organizations of volunteer firemen in accordance with
the provisions of paragraph seven of subsection (b) of section four
thousand two hundred sixteen of this article.
(b) (1) If organized to do only the kind of insurance business
specified in paragraph one of subsection (a) of section one thousand one
hundred thirteen of this chapter, such company shall:
(A) have not less than one thousand bona fide applications for life
insurance in an amount not less than one thousand dollars each;
(B) have received from each such applicant in cash the full amount of
one annual premium on the policy applied for, which premiums in the
aggregate at least equal twenty-five thousand dollars;
(C) have an initial surplus of one hundred fifty thousand dollars in
cash; and
(D) have a minimum surplus of one hundred thousand dollars.
(2) If organized to do only the kind of business specified in item (i)
of paragraph three of subsection (a) of section one thousand one hundred
thirteen of this chapter, such company shall:
(A) have not less than five hundred bona fide applications for such
insurance;
(B) have received from each such applicant in cash the full amount of
one annual premium on the policy applied for, which premiums in the
aggregate at least equal twenty thousand dollars;
(C) have an initial surplus of one hundred fifty thousand dollars in
cash; and
(D) have a minimum surplus of one hundred thousand dollars, except
that every such company initially licensed on or after July first,
nineteen hundred eighty-two shall have an initial surplus and a minimum
surplus in an amount which is at least equal to two hundred percent of
that required of a like company licensed prior to July first, nineteen
hundred eighty-two.
(3) If organized to do the kinds of insurance business specified in
paragraph one and in item (i) of paragraph three of subsection (a) of
section one thousand one hundred thirteen of this chapter, such company
shall comply with both paragraph one and paragraph two of this
subsection.
(4) To be organized to do the kind of insurance business specified in
paragraph two of subsection (a) of section one thousand one hundred
thirteen of this chapter, such company shall meet the organizational
requirements of paragraph one hereof and shall have an initial surplus
and a minimum surplus, each in an amount at least fifty thousand dollars
in excess of the respective amounts otherwise required by paragraph one
hereof.
(5) To be organized to do the kind of insurance business specified in
item (ii) of paragraph three or paragraph twenty-nine of subsection (a)
of section one thousand one hundred thirteen of this chapter, such
company shall meet the organizational requirements of one or more of
paragraphs one through four hereof and shall have an initial surplus and
a minimum surplus, each in an amount at least fifty thousand dollars in
excess of the highest applicable respective amount required by such
paragraph or paragraphs, except that any such company initially licensed
on or after July first, nineteen hundred eighty-two shall have an
initial surplus and a minimum surplus, each in an amount at least one
hundred thousand dollars in excess of the highest applicable respective
amount required by such paragraph or paragraphs.
S 4209. Mutual life insurance companies, mutual accident and health
insurance companies; assessments. (a) (1) No domestic mutual life
insurance company shall issue any policy of life or accident and health
insurance or any annuity contract providing for the payment of any
assessment by any policyholder or member in addition to the regular
premium or consideration charged therefor; nor shall any such company
have power to levy or collect any such assessment.
(2) No foreign or alien life insurance company shall do business in
this state if it does business anywhere on any assessment plan.
(b) (1) Except as provided in subsection (c) hereof, every domestic
mutual accident and health insurance company shall provide in its
policies that every member shall be liable for an assessment, in
addition to the amount of premiums paid or payable, in an amount not
exceeding the maximum named therein, which shall be not less than one
annual premium on the policy; if the assessment liability is unlimited
the policy shall so provide.
(2) If any domestic mutual accident and health insurance company does
not have admitted assets at least equal to the aggregate of its
liabilities, reserves and its minimum surplus as required by this
chapter, and if such impairment is not otherwise rectified, the board of
directors of such company may, with the approval of the superintendent
and within such time as he prescribes, order an assessment as specified
in its by-laws for an amount which will provide sufficient funds to
rectify such impairment, except that no member of such company shall be
liable for an assessment exceeding the limit specified in his policy.
(3) All such orders of assessment shall be filed with the
superintendent and shall not take effect unless and until approved by
him. The superintendent may refuse any such approval if, in his
judgment, such refusal will best promote the interests of the
policyholders and creditors of such company, and of the insuring public.
Such assessment shall be made upon all members liable to assessment
therefor in proportion to their several liabilities.
(4) Every person who was a member of such company at any time during
two years prior to the making of an order of assessment by the board of
directors shall pay his proportionate part of any such assessment if he
is notified of such assessment within one year after the making of an
order of assessment. A member`s proportionate part of any assessment
shall be determined by applying to the premium earned on the member`s
policy or policies during the period to be covered by the assessment the
ratio of the total assessment to the total premiums earned during such
period on all policies subject to assessment.
(c) Every mutual accident and health insurance company licensed to do
business in this state, if its charter or by-laws permit or are amended
to permit the issuance of policies without contingent mutual liability
of the policyholders for assessment, may with the permission of the
superintendent issue non-assessable policies in this state. Every such
company shall submit a copy of its proposed non-assessable policy or
policies for approval of the superintendent, and shall have obtained his
approval thereof. Every policy issued by any such company shall clearly
state whether or not the holder of such policy is subject to a liability
for assessment.
(d) (1) Any foreign mutual accident and health insurance company which
complies with the requirements of subsection (c) hereof for the issuance
of non-assessable policies may do an insurance business in this state
without complying with the requirements of subsection (b) hereof.
(2) No such company which does not comply with the requirements of
subsection (c) hereof shall do an insurance business in this state
unless its by-laws and its policies issued in this state contain
provisions for the levying and collection of assessments upon members,
at least for the payment of losses and expenses, which conform in
substance to the requirements of subsection (b) hereof.
S 4210. Election of directors of domestic mutual life insurance
companies. (a) (1) The directors of every domestic mutual life insurance
company shall be elected in the manner and subject to the regulations
prescribed in this section.
(2) Every such company shall, in accordance with its charter, either
elect its entire board of directors biennially, or divide its board of
directors into not more than three classes, as nearly equal as may be,
in which case the members of one class only shall be elected annually.
(3) In this section:
(A) "Policyholder" means the person insured under an individual policy
of life insurance or of accident and health insurance issued upon the
application of such person, the person who effectuates any such policy
upon the person of another pursuant to subsection (c) of section three
thousand two hundred five of this chapter, the person to whom any
annuity or pure endowment is presently or prospectively payable by the
terms of an individual annuity or a pure endowment contract, except
where the policy or contract declares some other person to be the owner
or holder thereof, in which case such owner or policyholder shall be
deemed the policyholder, and except in cases of assignment as
hereinafter provided. In the case of any such individual policy or
contract insuring two or more persons jointly the persons insured, or,
if any such policy be issued upon the application of some third person
or persons, the person or persons who effectuated any such policy
pursuant to subsection (c) of section three thousand two hundred five of
this chapter shall be deemed one policyholder within the meaning of this
section. In case any such policy or contract shall have been assigned by
an assignment absolute on its face, to an assignee other than the
company which shall have issued such policy, and in case the signature
of such assignee, either attested by the assignor or acknowledged by the
assignee, shall have been more than six months prior to any election
hereinafter referred to, filed at the principal office of such company,
then such assignee shall be deemed a policyholder within the meaning of
this section. In the case of every policy or contract of group insurance
or group annuity contract, issued by such company, the employer, or
other person, firm, corporation or association to whom or in whose name
the master policy shall have been issued and held, shall be deemed one
policyholder within the meaning of this section. Whenever in this
section reference is made to a policy of life insurance for one thousand
dollars or more, such reference shall be deemed to include, as
equivalent thereto, an annuity contract which at normal date of maturity
requires the payment of one hundred dollars or more annually, and a pure
endowment contract for the principal sum of one thousand dollars or
more.
(B) "Acknowledged", when used in reference to any instrument or
signature, shall have the same meaning which it has in reference to
conveyances of real property eligible for recording under section two
hundred ninety-one of the real property law.
(b) (1) Every participating policyholder of such company and every
policyholder of such company whose policy or contract is a
non-participating policy or contract described in the first sentence of
paragraph one of subsection (e) of section four thousand two hundred
thirty-one of this article, or a variable annuity contract subject to
paragraph one of subsection (d) of section four thousand two hundred
forty of this article and whose policy or contract shall be in force and
shall have been in force for at least one year prior to any such
election shall be entitled, without further qualification, to vote
thereat, either in person or by mail or by proxy, as hereinafter
provided, except that any company may adopt a resolution amending its
charter or by-laws so as to provide that all voting by policyholders for
directors shall be by ballot alone and not by proxy. In the event any
company adopts such an amendment, all mention of proxy or proxies or of
persons to receive proxies in this section, shall not apply to such
company and such company shall conduct its elections only by means of
ballots as long as such amendment is in effect. Any such company may,
upon the approval of the superintendent, confer, upon all or any class
of its non-participating policyholders holding a policy or contract
issued pursuant to the special permit granted by the superintendent in
accordance with paragraph one of subsection (e) of section four thousand
two hundred thirty-one of this article, the same rights to vote for
directors possessed by its participating policyholders. The
superintendent may give such approval if he finds that the proposed
change is in conformity with the requirements of law and that the
representation of the policyholders therein conferred is equitable and
reasonable.
(2) Every other person having a right to vote in any such election by
virtue of any contract which was made prior to April twenty-seventh,
nineteen hundred six, and which shall be in force at the time of such
election, shall be entitled to vote thereat in similar manner.
(3) In any election of directors of a domestic mutual life insurance
company pursuant to the provisions of this section, every policyholder
shall be entitled to one vote only, irrespective of the number of
policies or contracts held by him and of the amount thereof.
(c) (1) Not less than five months nor more than eight months prior to
any such election, on request of not less than twenty-five policyholders
entitled to vote at the last prior election, which request must be
subscribed and affirmed as true under the penalties of perjury by each
of such policyholders and must be filed in duplicate with such company
at least five days before any hearing thereon, the superintendent, after
notice of not less than five days to such company and a hearing thereon,
may in his discretion order such company within a period of not more
than forty-five days and not less than thirty days thereafter, to file
in his office, or in some suitable place designated by him and under his
custody, a full and correct copy of its list or card catalogue of the
names and last known postoffice addresses of all policyholders who have
been such for at least six months under a policy of life insurance for
one thousand dollars or more, or to file any part of such list or card
catalogue as the superintendent specifies.
(2) A list or any part thereof which may be so ordered filed pursuant
to paragraph one hereof shall be arranged, classified and corrected as
directed by the superintendent; and if one or more independent
nominations are made, as specified in subsection (h) hereof, then such
election shall be deemed a contested election and a complete list or
card catalogue of names of all policyholders who are eligible to vote,
as defined in this section, under a policy of life insurance for one
thousand dollars or more shall be so filed within forty-five days after
the copy of the certificate of such nominations, certified by the
superintendent shall have been filed at the home office of such company,
and such list or card catalogue shall be corrected from the records of
such home office so that a list or card catalogue, as nearly correct as
may be, shall be on file as aforesaid down to within three months of
such election.
(d) (1) Such list or card catalogue or any part thereof so filed,
while in the custody of the superintendent, shall be subject to
inspection, under regulations prescribed by him, at any time during
business hours by any policyholder of such company or by his authorized
representative, and in case of a contested election, under regulations
to be prescribed by the superintendent, may be used in the canvass of
the policyholders of the company.
(2) After such election, or, if no independent nomination has been
made, then after the time for such independent nominations has expired,
such list or card catalogue shall be returned to the company filing the
same.
(e) If all or any class of the policyholders of any domestic stock
life insurance company shall be entitled to vote at any election of the
directors of such company, such policyholders, subject to the provisions
of the company`s charter, shall be entitled to vote in person, by proxy
or by mail, as herein provided, and under the conditions stated in
subsection (c) hereof, a similar list or card catalogue of
policyholders, qualified to vote, in accordance with the charter or
by-laws of such corporation, except the holders of industrial policies,
shall be filed and maintained in the office of the superintendent, or in
some suitable place designated by him and under his custody, and at the
home office of such company, respectively, similarly arranged and
similarly subject to inspection and copy and withdrawal as in the case
of mutual life insurance companies as above provided.
(f) Where policyholders in any company shall have made nominations as
hereinafter prescribed, they or a committee representing them, shall
upon demand, and with the approval of the superintendent and the payment
to the company of the actual cost of making such copies, be furnished by
such company with a copy of such list of policyholders or with a copy
therefrom of the policyholders residing in a designated territory. A
copy of a list so taken, or of any part thereof, shall be held by
persons receiving the same inviolate and solely for the purposes of said
nominators in a pending election and shall not be transmitted to other
persons for any other use whatever. At the close of the canvass of the
votes all copies of such lists shall be returned to the company.
(g) At least seven months prior to the date of any election of
directors in any such company, the board of directors shall nominate
candidates for every vacancy to be filled at such election and shall
also appoint three persons, jointly or severally, to receive proxies to
be voted for said nominees, and shall also file in duplicate with the
superintendent and at its home office a certificate of the names of the
candidates so nominated and of the persons so designated to receive said
proxies, which shall be described as the "administration ticket."
(h) (1) (A) In every such company which had over one hundred thousand
policies or contracts of the kind or kinds specified in subsection (a)
hereof, in force at its last preceding election, each in the amount of
one thousand dollars or more, of life insurance or an equivalent thereto
as hereinbefore provided, any policyholders, prospectively qualified as
voters at the next ensuing election of directors, equal in number to
one-tenth of one per centum of such total policies in force or five
hundred, whichever number is greater, and in every other such company,
any five hundred or more of such prospectively qualified voters, may
make other nominations for one or more vacancies in the board of
directors to be filled at any such election by filing with the
superintendent, at least five months before the election, a certificate,
subscribed and affirmed as true under the penalties of perjury by each
of such policyholders, giving the names and addresses of the candidates
nominated, the names and addresses of three persons jointly or
severally, designated to receive proxies to be voted for said nominees,
and an appropriate name or title designated by the superintendent to
distinguish such ticket from the administration ticket and other
nominations.
(B) If the superintendent finds after investigation or hearing that
such other nominations have been made as specified in this subsection,
he may certify to such certificate.
(C) Such nominators shall also file a copy of said certificate,
certified by the superintendent, at the home office of the company at
least five months before such election.
(D) Any policyholder who will be qualified to vote at such ensuing
election if he continues his policy or contract in force at the time of
such election, shall be deemed prospectively qualified to vote thereat.
(2) (A) All certificates of nomination shall be accompanied by a
written acceptance of such nomination by each nominee thereon.
(B) The supreme court in the judicial district in which such company
has its home office may for cause shown direct the name of any candidate
to be stricken from a ticket on file.
(C) The provisions of subsection (k) hereof shall apply to any vacancy
so created.
(3) If no independent nomination shall have been made as provided in
subsection (h) hereof, then the provisions of subsections (i) to (k),
hereof inclusive, of this section, shall not be applicable, and such
election of directors shall be conducted in accordance with such
reasonable rules and regulations as the superintendent may prescribe;
but no votes shall be cast or counted except by ballot signed by the
policyholder and for candidates nominated by the board of directors, in
accordance with subsection (g) of this section or for such candidate as
the board of directors may have nominated to fill vacancies among said
candidates caused by the death, disability or refusal to stand as
candidates of any one or more of those so nominated.
(i) (1) (A) At least three months prior to any such contested election
the company shall cause to be mailed, in a sealed envelope with postage
prepaid, to each policyholder whose name shall be upon said complete
list or card catalogue and whose policy shall still be in force, at his
last known post-office address, a serially numbered official ballot in a
form approved by the superintendent and containing the respective
tickets nominated as hereinbefore provided and the names and addresses
of the persons so appointed to receive proxies. A corresponding serially
numbered stub or card containing the name and address of the
policyholder to whom each ballot is sent shall be retained at the home
office of the company for the purpose of identifying said ballot when
returned.
(B) Such official ballot shall be conveniently arranged under the
names or titles by which the nominations have been designated and shall
have printed upon it the name of the company, the post-office address of
its home office, the number of directors to be elected and the names of
those whose terms expire, the date of the election and instructions as
herein provided for executing such official ballot or for the use of a
proxy as herein provided and a designated space for the signature of the
policyholder, the number of one of his policies and the signature of a
subscribing witness.
(C) No other or different ballot shall be used, except that a
duplicate ballot or ballots may be supplied to any policyholder and
voter or to the holder of his proxy, for his own use, pursuant to rules
and regulations prescribed by the superintendent.
(D) There shall be inclosed in such sealed envelope with such official
ballot a suitable return gummed envelope having inscribed thereon the
name and post-office address of the home office of the company, the
corresponding serial number, and the words "ballot for directors".
There shall also be inclosed in such sealed envelope or printed on the
back of such ballot, a suitable blank proxy together with a statement of
the right of the policyholder to vote either by mail or by proxy as
herein provided or in person.
(E) No other papers or written or printed matter shall be inclosed in
such sealed envelope. Specimen copies of such sealed envelope, ballot
and proxy shall be submitted to the superintendent for his approval, and
no such envelope and inclosures shall be mailed unless the same shall
have been approved by him.
(2) A policyholder desiring to vote directly by mail must indicate the
name of the nominee or nominees for whom he desires to vote or strike
out the name or names of those for whom he does not desire to vote upon
the official ballot so provided or must otherwise suitably indicate in
the blank spaces thereon the nominee or nominees for whom he desires to
vote, and must sign the said official ballot in his own handwriting in
the presence of a subscribing witness, and place or cause to be placed
thereon the number of at least one policy held by him. Failure to state
or to correctly state such policy number shall not render a ballot void
or subject the policyholder to any penalty.
(3) Such policyholder desiring to vote directly by mail must inclose
the official ballot so marked in such return envelope or in a similarly
inscribed envelope. Such envelope containing the ballot sealed and
postpaid shall be mailed by the policyholder to the home office of the
company. No policyholder may vote for more than the number of directors
so to be elected and all ballots upon which the intent of the
policyholder does not fairly appear shall be void.
(j) (1) A policyholder may vote by proxy executed to one or more of
the persons designated in the certificates filed as provided in
subsections (g) and (h) of this section. The execution of a proxy shall
be attested by a subscribing witness and the proxy shall set forth the
number of at least one policy held by the person giving it. A proxy
shall not be valid unless executed within three months prior to the
election and shall be used only at such election or any adjournment
thereof and may not be revoked by the policyholder giving the same
unless it appears that the policyholder was induced by fraud or
misrepresentation to execute the proxy.
(2) In exercising such proxy the holder or holders thereof shall vote
only upon the official ballot, or the duplicate thereof, furnished to
such policyholder as hereinbefore provided, to which such proxy shall be
attached. In so voting the proxy holder shall sign said ballot in the
name of the policyholder, and shall also sign his own name as proxy.
(3) Ballots voted by proxy holders shall be mailed to the home office,
or voted in person by said proxy holder, in the same manner as herein
prescribed for ballots voted directly by policyholders.
(k) (1) The votes at such contested election shall be limited to the
candidates nominated as aforesaid and to substituted nominees chosen as
follows:
(A) In case any vacancy occurs more than five months prior to the day
set for such election, the board of directors, if such vacancy occurs on
the administration ticket, or a majority of the nominators, if such
vacancy occurs on any independent ticket, shall nominate another
candidate to fill such vacancy by filing at least one month prior to the
date of such election a certificate of said nomination with the
superintendent and a certified copy thereof at the home office of the
company, and the name of the candidate so selected shall be set forth in
the official ballot sent out by the company.
(B) If such vacancy occurs within five months of such election then
the board of directors, including those elected at such election, shall
have power to fill such vacancy.
(2) All ballots by mail shall be received, at the home office of the
company holding such contested election, by two or more persons,
one-half of whom shall be appointed for that purpose by the
superintendent and one-half by the directors of the company. The
compensation of the custodians so appointed shall be paid by the
company. Such custodians shall keep a daily record of the envelopes
marked as containing ballots for directors which are received at the
home office, and shall securely retain them in their joint custody in
safety vaults or compartments accessible only to such custodians and not
to either of them separately, under regulations prescribed by the
superintendent. Prior to the closing of the polls on election day said
custodians shall deliver all ballots so received by them to the
inspectors of election.
(3) The election shall be held at the home office of the company. The
polls shall be opened at ten o`clock in the forenoon and remain open
until four o`clock in the afternoon of the day of the election, at which
time they shall be closed. All votes cast at such election shall be by
ballot as hereinbefore provided.
(4) The superintendent shall appoint an adequate number of competent
and disinterested inspectors of election and may appoint if necessary,
expert accountants and other assistants and may authorize the
procurement of stationery and supplies necessary for conducting the
election and canvassing the votes. The reasonable compensation of such
inspectors, expert accountants and other assistants prescribed by the
superintendent, and other necessary disbursements approved by him, shall
be paid by the company. Such inspectors shall have power to determine
all questions concerning the verification of the ballots, the
ascertainment of the validity thereof, the qualifications of the voters
and the canvass of the vote, and with respect thereto shall act under
such rules and regulations as are prescribed by the superintendent.
(5) All envelopes marked substantially as hereinbefore prescribed
received by mail at the office of the company at any time prior to the
day of election or on that day before the polls are closed shall be
forthwith delivered intact without opening to the custodians appointed
as hereinbefore provided and before the polls are closed shall be
delivered to the inspectors of election.
(6) No person shall conceal or withhold or aid or abet any other
person in concealing or withholding from the custodians or inspectors
any such envelope; nor shall any person, other than an inspector, or an
authorized assistant, open or aid or abet any person to open any such
envelope.
(7) No ballots received by mail at the office of the company or
offered personally or by proxy after the polls are closed shall be
counted. All ballots offered personally or under proxies and all ballots
received by mail at the office of the company as aforesaid before the
polls are closed shall be received by the inspectors subject to
verification and ascertainment of the validity thereof and of the
qualifications of the voters.
(8) Immediately upon the closing of the polls the inspectors shall
proceed to the examination of the ballots and shall canvass the votes
lawfully cast. The canvass shall proceed from day to day and the
inspectors, or a majority thereof, shall certify the result to the
company and to the superintendent as soon as it is completed. Such
certificate shall be subscribed and affirmed by such inspectors as true
under the penalties of perjury. Unless contested by the superintendent
or other qualified person pursuant to paragraph twelve hereof, the
results so certified shall be decisive. The superintendent may require
the inspectors to report for determination by him any questions upon
which they may disagree.
(9) Representatives designated by a majority of each three persons who
shall have been appointed as aforesaid to receive proxies to be voted
for tickets nominated for such contested election, in such number as
shall be approved by the superintendent, may be present during the
casting, verification and canvass of the votes. The compensation of such
representatives shall not be a charge upon or paid from the funds of the
company.
(10) All ballots and proxies received by the inspectors of election
shall immediately upon the completion of the canvass be placed in sealed
packages and shall be preserved by the said inspectors for a period of
four months, subject to the order of any court having jurisdiction of
any proceedings relating thereto. The necessary expenses of preserving
such ballots and proxies shall be paid by the company as a part of the
expenses of such election.
(11) The superintendent shall have power to supervise and direct the
methods and procedure of any such contested election and to make all
further needful rules and regulations concerning the same. The
superintendent shall prescribe the method of distribution of ballots and
proxies to policyholders, qualified to vote at such election, who are
not included in such list or card catalogue, and shall prescribe
reasonable rules and regulations for the casting of such ballots and the
exercise of such proxies. All bills for or on account of the custodians
of ballots and inspectors of election, their employees, assistants and
other necessary expenses or disbursements, during the conduct of such
contested election, and the canvass of the votes, shall be approved by
the superintendent before payment by the company.
(12) Any such contested election and the conduct thereof shall at all
times, on petition of the superintendent or of any person or persons
qualified with respect to any procedure or right therein which is in
question, be subject to the supervision and control of the supreme court
in the judicial district in which such company has its home office, in
like manner as elections for state, county and municipal officers, so
far as analogous thereto.
(l) The inclusion by any such company of the name of any person in any
list of policyholders required by this section shall not be construed as
an admission by the company of the validity of any policy or contract
and no such list shall be competent evidence against the corporation in
any action or proceeding in which the question of the validity of any
policy or contract or of any claim under it is involved.
(m) (1) No insurance company, and no officer, agent or employee
thereof shall knowingly omit, from any list or card catalogue herein
required to be filed, the name of any policyholder required to be
included therein, or shall knowingly omit to give the correct name and
address of such policyholder, or shall knowingly give a wrong address,
or shall expend, advance or lend any money of the company contrary to
the provisions of this section.
(2) Except where such expenditure is otherwise authorized or required
by this section, no money of the company shall be expended in connection
with any such election or in canvassing therefor, and no officer or
agent of the company shall directly or indirectly make any advance or
loan of such moneys to any person in connection with or for the purpose
of such election or canvass unless the expenditure or loan is in a
contested election and shall be limited to reasonable amounts authorized
by the board of directors of the company and approved in advance by the
superintendent.
(3) No officer, salaried agent or employee of any such company shall,
within the period between the filing of the nominations and the
election, during business hours, devote any of his time to soliciting
votes in support of or in opposition to any candidate or list of
candidates in connection with any such election of directors. No
officer, agent or employee of any such company shall compel or coerce
any other such officer, agent or employee to support, work for, or
oppose any candidate or any list of candidates. Neither the stationery
or supplies of any such company nor office space devoted to the conduct
of its business shall be used for furthering the interest of any ticket
or candidate at any election of directors. Notwithstanding the above,
the company may utilize the time of officers, employees and agents,
office space, stationery and supplies in circumstances where money of
the company may be expended pursuant to paragraph two of this
subsection, but no officer, employee or agent shall in connection with
any election be coerced to undertake activity outside the scope of the
duties of the position of such officer, employee or agent.
(4) No person, firm or corporation, whether connected with such
company or otherwise, shall issue or cause to be issued any circular or
other written or printed communication, either in behalf of or in
opposition to any ticket or any candidate for election as director of
such company which contains any false statement.
(5) No policyholder shall sell or offer to sell any vote or proxy for
any sum of money or anything of value. No agent shall be paid or receive
any sum of money or anything of value in connection with the voting of a
ballot or obtaining of a proxy.
S 4211. Election of directors of domestic stock life insurance
companies. (a) No election of directors of a domestic stock life
insurance company shall be valid unless a copy of the notice of election
shall have been filed in the office of the superintendent at least ten
days before the day of such election in addition to the service thereof,
as required by section six hundred five of the business corporation law.
(b) Whenever any directors of such a company shall have resigned and
successors shall have been chosen pursuant to the provisions of the
by-laws, such successors shall not take office nor exercise their duties
until ten days after written notice of their election shall have been
filed in the office of the superintendent.
(c) Policyholders of such an insurance company shall be eligible for
election as directors or officers, whether or not they are shareholders.
S 4212. Stock life insurance companies; voting power of policyholders.
(a) (1) Any domestic stock life insurance company may, by amendment to
its charter, confer upon its policyholders, or upon such of its
policyholders as shall have a specified amount of insurance on their
lives, the right to vote for all or any less number of directors of such
company in a manner not inconsistent with this chapter.
(2) Such amendment shall take effect upon approval by the
superintendent. The superintendent may give such approval if he finds
that the proposed change is in conformity with the requirements of law
and that the representation of policyholders therein conferred is
equitable and reasonable.
(3) If the right to vote for all of the directors of such company is
conferred upon such policyholders, then the election of directors shall
thereafter be governed by the provisions of subsection (e) of section
four thousand two hundred ten of this article.
(b) This section shall not apply to any such company which has
conferred voting power upon policyholders pursuant to any previous law
effective before January first, nineteen hundred forty, but the voting
rights of such policyholders shall continue to be governed by such
previous law.
S 4213. Industrial life insurance. (a) In this chapter "industrial
life insurance" means that form of life insurance, either:
(1) under which the premiums are payable weekly, or
(2) under which the premiums are payable monthly or oftener, but less
often than weekly, if the face amount of insurance provided in any such
policy is less than one thousand dollars and if the words "industrial
policy" are printed upon the policy as a part of the descriptive matter.
(b) (1) No insurer or fraternal benefit society doing in this state
the business of industrial life insurance shall deliver or issue for
delivery in this state, and no agent or representative of any such
company or society shall aid in so issuing or delivering, any policy of
weekly premium industrial life insurance on the life of a person of the
age, as determined by next birthday, of ten years or more, with
knowledge that the amount of such policy, together with the amount of
all other policies of weekly premium industrial life insurance then in
force as premium paying insurance on the life of such person, exceeds
one thousand dollars but nothing contained in this section shall affect
the validity or enforceability, in accordance with its terms, of any
such policy.
(2) The amounts of weekly premium industrial life insurance referred
to in this subsection shall not include dividend additions nor
additional amounts payable under provisions for accidental death
benefits.
(3) Any rules or regulations of any such insurer or fraternal benefit
society, which are designed to limit the amount of insurance, as herein
provided, shall be filed with the superintendent.
(c) No authorized life insurance company, including a cooperative life
and accident insurance company and no authorized fraternal benefit
society, shall deliver or issue for delivery in this state any policy or
contract of industrial life insurance in the form of endowment
insurance.
(d) Notwithstanding the provisions of subsection (c) hereof, any
domestic life insurance company or fraternal benefit society may issue
in this state for delivery outside of this state through its agent or
like representative in another state or foreign country any policy of
industrial life insurance, in the form of endowment insurance, which
insures the life of a non-resident of this state and which is not
prohibited by the laws of such other state or foreign country.
(e) Notwithstanding the foregoing provisions, on and after June first,
nineteen hundred eighty, no policy of industrial life insurance shall be
delivered or issued for delivery in this state.
S 4214. Industrial accident and industrial health insurance. (a) In
this chapter:
(1) "Industrial accident insurance" means that form of accident
insurance wherein the premium is payable in the manner prescribed in
subsection (a) of section four thousand two hundred thirteen of this
article, covering such risks as death, dismemberment, loss of eyesight,
or loss of time, as a result of accidental means.
(2) "Industrial health insurance" means that form of health insurance
wherein the premium is payable in the manner prescribed in subsection
(a) of section four thousand two hundred thirteen of this article,
covering such risk as loss of time caused by illness or sickness.
(b) Notwithstanding the foregoing provisions, on and after June first,
nineteen hundred eighty, no policy designated or sold as an industrial
accident insurance or industrial health insurance policy shall be
delivered or issued for delivery in this state; provided, however, that
this prohibition shall not prevent the delivery or issuance for delivery
of a policy approved by the superintendent where the premium is payable
weekly or monthly and such policy is approvable under other provisions
of this chapter.
S 4215. Contracts with industrial life insurance agents; prohibitions.
(a) No life insurance company licensed to do business in this state
shall make any contract with any agent, superintendent or other
representative employed in this state which provides:
(1) That the company shall charge against the past, present or future
compensation of the agent, superintendent or other representative,
either salary or commission, any sum of money as a result of the
surrender for cash of any industrial policy by any policyholder;
(2) That the company shall charge against the past, present or future
compensation of the agent, superintendent or other representative,
either salary or commission, any sum of money as a result of the lapse
of any industrial policy that has been in force for three years or
longer.
(b) The provisions of subsection (a) hereof shall not prohibit the
company from contracting with its agents, superintendents or other
representatives, to charge any agent, superintendent or other
representative, a sum not exceeding the commission on any policy written
by the agent, superintendent or other representative on the life of any
person, or any relative sharing the home with the person, who has
terminated a policy of the company not more than three months before or
who terminates such a policy within three months after the policy was
written.
S 4216. Group life insurance; premium requirements; notice of
conversion; filing of compensation. (a) (1) In this chapter:
(A) "Group life insurance" means that form of life insurance covering
any one of the groups specified in subsection (b) hereof, which is
written under a policy issued to the policyholder as hereinafter
defined, and which in all other respects conforms to the requirements of
subsection (b) hereof.
(B) "Certificate holder," as used in relation to a group life
insurance policy, means the person to whom a certificate evidencing such
insurance is issued under any such policy, as hereinafter provided.
(2) In this section, for the purposes of insurance hereunder:
"employees" may be deemed to include (i) the officers, managers,
employees and retired employees of the employer and of subsidiary or
affiliated corporations of a corporate employer, and the individual
proprietors, partners, employees and retired employees of affiliated
individuals and firms controlled by the employer through stock
ownership, contract or otherwise; (ii) the individual proprietor or
partner if the employer is an individual proprietor or a partnership;
(iii) as used in paragraph one of subsection (b) hereof, the directors
of the employer and of subsidiary or affiliated corporations of a
corporate employer; and (iv) as used in paragraphs four and five of
subsection (b) hereof, the trustees or their employees, or both, if
their duties are principally connected with such trusteeship.
(b) Any life insurance company authorized to do business in this state
may deliver in this state policies of group life insurance only as
follows:
(1) A policy issued to an employer or to a trustee or trustees of a
fund established by an employer, which employer or trustees shall be
deemed the policyholder, insuring with or without evidence of individual
insurability satisfactory to the insurer, employees of such employer,
and insuring, except as hereinafter provided, all of such employees or
all of any class or classes thereof determined by conditions pertaining
to the employment, or by a combination of such conditions and conditions
pertaining to the family status of the employee, for amounts of
insurance on each person insured based upon some plan which will
preclude individual selection. However, such a plan may permit a limited
number of selections by employees if the selections offered utilize a
consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
The premium for the policy shall be paid by the policyholder, either
wholly from the employer`s funds or funds contributed by him or from
funds contributed by the insured employees, or from funds contributed
jointly by the employer and employees. If all or part of the premium is
to be derived from funds contributed by the insured employees, such
policy must insure not less than fifty percent of such eligible
employees or, if less, fifty or more of such employees. Except as
provided in subsection (b) of section four thousand two hundred
thirty-one of this article and in paragraph five of subsection (a) of
section three thousand two hundred twenty of this chapter, such policy
shall provide for payment of all benefits thereunder, to the person
insured or to some beneficiary or beneficiaries other than the employer,
and shall provide for the issuance of a certificate to the policyholder
for delivery to the person insured or to such beneficiary, as evidence
of such insurance.
(2) A policy issued to a labor union, which shall be deemed the
policyholder insuring, with or without evidence of individual
insurability satisfactory to the insurer, not less than twenty-five
members of such union, and insuring, except as hereinafter provided all
of the members of such union or all of any class or classes thereof
determined by conditions pertaining to their employment or membership in
the union, or both, and who are actively engaged in their occupations,
for amounts of insurance on each person insured based upon some plan
which will preclude individual selection. However, such a plan may
permit a limited number of selections by members if the selections
offered utilize a consistent pattern of grading the amounts of insurance
for individual group members so that the resulting pattern of coverage
is reasonable. The premium on such policy may be paid by the union, by
the members, or by the union and its members jointly. If the premium is
paid by the members or by the union and its members jointly such policy
must insure not less than fifty percent of such eligible members or, if
less, fifty or more of such members. Except as provided in paragraph
five of subsection (a) of section three thousand two hundred twenty of
this chapter, such policy shall provide for the payment of benefits to
the person insured or to some beneficiary or beneficiaries, other than
the union or any of its officials, representatives or agents, and shall
provide for the issuance of a certificate to the union for delivery to
the person insured or to such beneficiary, as evidence of such
insurance. Any such policy may vary from the foregoing requirements, as
follows:
(A) if the policy is cancellable at the option of the insurer at the
end of any policy year and if the basis of premium rates may be changed
by the insurer at the beginning of any policy year, all members of such
labor union may be insured thereunder;
(B) if and when members of such union apply for and pay for additional
amounts of insurance, a smaller percentage of such members than fifty
percent may, with evidence of individual insurability satisfactory to
the insurer, be insured thereunder for such additional amounts.
(3) (A) A policy issued to a creditor or vendor, or to a trustee or
agent designated by two or more creditors or vendors, which creditor,
vendor, trustee, or agent shall be deemed the policyholder, except as
hereinafter provided.
(B) The policy shall insure all of the members, but may exclude any as
to whom evidence of individual insurability is not satisfactory to the
insurer, of a group of debtors or vendees, defined as follows:
(i) all of the borrowers, or borrowers and guarantors of borrowers, or
intended borrowers (under a program for defraying the cost of attendance
of a student at a college or university or at an elementary or secondary
school providing education required for minors, which program includes
provision for immediate periodic payments by the parent or guardian of
such student and a loan commitment to such parent and guardian by a
financial institution, or by or on behalf of a college or university or
such an elementary or secondary school to defray the cost of attendance
at such college or university or elementary or secondary school in
excess of the accumulated periodic payments by the parent or guardian)
from one financial institution and its subsidiary or affiliated
companies, or from two or more creditors or vendors so designating such
trustee, trustees or agent, or
(ii) all of the purchasers of securities, merchandise or other
property from one vendor, or from two or more vendors so designating
such trustee or agent, or
(iii) all of any class or classes of such debtors or purchasers
determined by conditions pertaining to the type of indebtedness or
purchase.
(C) The policy may specify the ages to which the insurance provided
shall be limited, provided however that if the insurance terminates at a
particular age, the age at which it terminates shall be prominently
displayed on the application for insurance.
(D) If the agreement provides for repayment in instalments, the
insurance may be continued for the duration of the debt over a period of
not more than thirty-five years from the date the debt is first
incurred; otherwise the insurance may be continued for a period not in
excess of eighteen months except that such insurance may be continued
for an additional period not exceeding six months in the case of
default, extension or recasting of the loan.
(E) Notwithstanding anything in this paragraph to the contrary,
(i) the insurance of borrowers, who incur indebtedness arising from
the granting of policy loans pursuant to policy provisions therefor,
provided under a policy issued to the insurance company granting the
policy loan, may be continued for the duration of the indebtedness,
(ii) under a plan approved by the superintendent the insurance of
debtors with respect to an agreement which does not provide for
repayment in instalments may be continued for the duration of the
indebtedness but not more than seven years from the date the
indebtedness is incurred, and
(iii) the insurance of persons who are tenants or shareholders of a
mutual or other housing corporation (organized pursuant to the
provisions of the private housing finance law and regulated by such
statute as to rent, dividends and profits) under a policy issued with
identifiable charges or fixed amounts of premiums to such corporation or
to a trustee or trustees or agent designated by one or more such
corporations may be continued for the term of the tenant`s lease with
such corporation or thirty-six months or whichever is the greater
period, and the amount of insurance with respect to any person insured
under such policy may be a fixed amount not greater than the lesser of
fifty-five thousand dollars or an amount equal to thirty-six times the
monthly instalments due under such lease.
(F) The benefits of any policy authorized under this paragraph shall
be payable to the policyholder; but the amount of any benefit received
by the policyholder thereunder not in excess of the actual indebtedness
shall be applied by the policyholder to the discharge of any obligation
of the person insured, or his personal representative, to the
policyholder, creditor or his assignee and the amount of any benefit
received by the policyholder thereunder in excess of the actual
indebtedness shall be payable to a beneficiary named by the debtor or,
if none, then either to the estate of the debtor or under the provision
of a facility of payment clause.
(G) No such group shall be eligible for insurance hereunder unless the
new entrants to such group number at least twenty-five persons yearly.
(H) The premium for the policy shall be paid by the policyholder,
either from the creditor`s or vendor`s funds, or from charges collected
from the insured debtors or purchasers, or from both. A policy on which
all or part of the premium to be derived from the collection from the
insured debtors or purchasers of identifiable charges not required of
uninsured debtors or purchasers may be issued only if the policy
reserves to the insurer the right to require evidence of individual
insurability if less than seventy-five percent of the new entrants in
any year become insured and provided that such policy shall not include,
in the class or classes of debtors or purchasers eligible for insurance,
debtors or purchasers under obligations outstanding at its date of issue
without evidence of individual insurability unless at least seventy-five
percent of the then eligible debtors or purchasers elect to pay the
required charges.
(I) The policy may be issued to an assignee to whom such creditor or
vendor has transferred all of its right, title and interest to the
unpaid indebtedness, or to the unpaid purchase price, under all such
agreements made by it.
(J) The amount of insurance on any person insured under a policy shall
not at any time exceed:
(i) in all cases except as hereinafter provided the lesser of
fifty-five thousand dollars and the amount of unpaid indebtedness or the
amount of the purchase price unpaid by such person;
(ii) in the case of a loan commitment pursuant to the hereinabove
program for defraying the cost of attendance of a student at a college
or university or at such an elementary or secondary school, the lesser
of fifty-five thousand dollars and the total of the unpaid balance of
the scheduled periodic payments whether due or not due and the amount of
any outstanding loan commitment pursuant to such a program; or
(iii) in the case of a transaction secured by a real estate mortgage,
the lesser of the sum of two hundred twenty thousand dollars and the
amount of the indebtedness so secured.
(iv) in the case of indebtedness arising from a credit card account
where there is no specific charge for insurance, the lesser of the sum
of one hundred thousand dollars or the amount of unpaid indebtedness.
(K) (i) With respect to loans made by production credit associations
organized pursuant to the federal Farm Credit Act of 1933, 12 U.S.C. SS
1131c - 1138c, and with respect to loans made by a bank, trust company
or industrial bank to a borrower engaged in the business of farming,
crop production or the raising, breeding, fattening or marketing of
livestock for the purposes of such business and other requirements of
the borrower, the amount of insurance may exceed the unpaid indebtedness
and shall not be limited as to amount except that the insurance shall
not exceed the greater of the loan commitment or the outstanding balance
of the loan at the inception of the period for which the borrower is
insured.
(ii) With respect to loans made by Federal Land Banks established
pursuant to an Act of Congress of the United States entitled the
"Federal Farm Loan Act", approved July seventeenth, nineteen hundred
sixteen, as amended, the amount of insurance on any person insured under
the policy shall not at any time exceed the amount of the unpaid
indebtedness at the inception of the period for which premiums are paid,
but shall not otherwise be limited as to amount.
(L) The superintendent shall prescribe from time to time regulations
determining the procedures, terms and conditions applicable to a policy
issued pursuant to this paragraph to the trustee or agent designated by
two or more creditors or vendors.
(M) Each insurer shall file with the superintendent its forms of
policies, certificate statements and applications pertaining to credit
insurance together with its premium rates for such insurance and the
same shall be subject to his approval. The superintendent shall not
approve any such forms if the premium charged is unreasonable in
relation to the benefits provided.
(N) For the purposes of this paragraph: (i) "creditor" includes a
lessor of real or personal property, (ii) "borrower" includes a lessee
of real or personal property, and (iii) "indebtedness" includes rentals
payable under the lease of real or personal property.
(4) A policy issued to a trustee or trustees of a fund established or
participated in by two or more employers or by one or more labor unions,
or by one or more employers and one or more labor unions, which trustee
or trustees shall be deemed the policyholder, to insure employees of the
employers or members of the unions for the benefit of persons other than
the employers or the unions, subject to the following requirements:
(A) The persons eligible for insurance shall be all of the employees
of the employers or all of the members of the unions, or all of any
class or classes thereof determined by conditions pertaining to their
employment, or to membership in the unions, or to both.
(B) The premium for the policy shall be paid by the trustees either
wholly from funds contributed by the employer or employers of the
insured persons or by the union or unions, or by both, or from funds
contributed by the insured persons, or jointly from such funds and funds
contributed by the insured persons specifically for their insurance. A
policy on which no part of the premium is to be derived from funds
contributed by the insured persons specifically for their insurance must
insure all eligible persons, excluding any as to whom evidence of
individual insurability is not satisfactory to the insurer.
(C) The policy shall insure at least fifty persons at date of issue.
(D) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
the policyholder, employers, or unions. However, such a plan may permit
a limited number of selections by employees or members if the selections
offered utilize a consistent pattern of grading the amounts of insurance
for individual group members so that the resulting pattern of coverage
is reasonable.
(E) With respect to a policy issued to a trustee or trustees of a fund
established by one or more labor unions, or by one or more employers and
one or more labor unions the proposed insured must submit, and the
insurer must obtain, a written certification that a reasonable number of
comparative bids have been obtained from different insurers and that
such bids have been considered by the trustees before making a decision
concerning which bid to accept. Such decision must be made at a
trustees` meeting held on a date certain, and a copy of the minutes of
such meeting must be attached to such certification.
(5) A policy issued to a trustee or trustees of a fund established or
participated in by the employer members of a trade association, which
trustee or trustees shall be deemed the policyholder, to insure
employees of such employers for the benefit of persons other than the
association or the employers, subject to the following requirements:
(A) The policy may be issued only if:
(i) the association has been in existence for at least two years and
was formed for purposes principally other than obtaining insurance, and
(ii) the participating employers, meaning such employer members whose
employees are to be insured, constitute at date of issue at least fifty
percent of the total employers eligible to participate, unless the total
number of persons covered at date of issue exceeds six hundred, in which
event such participating employers must constitute at least twenty-five
percent of such total employers, in either case omitting from
consideration any employer whose employees are already covered for group
life insurance;
(B) The persons eligible for insurance under the policy shall be all
of the employees of the participating employers, or all of any class or
classes thereof determined by conditions pertaining to their employment.
(C) The premium for the policy shall be paid by the trustee or
trustees either wholly from funds contributed by the employers or by the
employees or funds contributed jointly by the employers and the
employees. A policy on which no part of the premium so payable is to be
derived from funds contributed by the insured employees must insure all
eligible employees, excluding any as to whom evidence of individual
insurability is not satisfactory to the insurer;
(D) The policy must cover at least fifty employees at date of issue;
(E) The amounts of insurance under the policy must be based upon some
plan precluding individual selection either by the employees or by the
policyholder or the employer. However, such a plan may permit a limited
number of selections by employees if the selections offered utilize a
consistent pattern of grading the amount of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(6) A policy issued to a duly organized association of civil service
employees which shall include in its membership not less than five
thousand civil service employees having a common employer, or to a duly
organized association of teachers having a membership of not less than
five thousand, which association, in either event, shall be deemed the
policyholder, and which shall have been formed and is maintained for
purposes other than to effect group life insurance on its members. Such
policy shall insure only members of such association, with or without
evidence of individual insurability satisfactory to the insurer, based
upon a plan which will preclude individual selection. However, such a
plan may permit a limited number of selections by members if the
selections offered utilize a consistent pattern of grading the amounts
of insurance for individual group members so that the resulting pattern
of coverage is reasonable. The premium on such policy may be paid by the
association or by the association and the insured members jointly or by
the insured members alone. Every member of such association in good
standing shall have opportunity to apply for such insurance and not less
than sixty percent of the eligible members in good standing may be so
insured. Such policy shall provide for the payment of benefits, except
policy dividends, to the person insured or to some beneficiary or
beneficiaries, other than the association or any of its officers or
directors, as such, and shall also provide for the issuance of a
certificate to the association for delivery to the person insured or to
such beneficiary, as evidence of such insurance.
(7) A policy insuring the members of one or more troops or units of
the state troopers or state police of any state, issued to the
commanding officer of the state troopers or state police, who shall be
deemed the policyholder, the premium on which is to be paid by the
members insured; or a policy covering the members of one or more duly
incorporated policemen`s benevolent associations or of one or more
associations or organizations of uniformed firemen or volunteer
firefighters or volunteer ambulance workers which association or
organization shall have been in existence for at least two years prior
to the issuance of such policy and which shall have twenty-five members
at the time of the issuance of such policy, which shall be issued to
such association or to a trustee or trustees of a fund established, or
participated in, by one or more of such associations or organizations as
the policyholder. If the opportunity to take such insurance is offered
to all eligible members of a unit of such state troopers or state
police, or to all eligible members of such incorporated policemen`s
benevolent association or of an association or organization of uniformed
firemen, volunteer firefighters, then not less than fifty percent of
such members or, if less, fifty or more of such members may be so
insured. If the insurance is limited to those eligible members who are
employed as state troopers, policemen, firemen or volunteer ambulance
workers, then not less than sixty percent or five hundred of such
members, whichever is less, may be so insured. Such policy shall provide
for the payment of benefits, except policy dividends, to the person
insured or to some beneficiary or beneficiaries, other than such
commanding officer or such association or any of its officials, as such,
and shall also provide for the issuance of a certificate to the
policyholder for delivery to the person insured or to such beneficiary,
as evidence of such insurance. For the purposes of this paragraph any
association currently holding premium dividends as a result of policies
issued under this section shall be permitted to maintain said dividends
for the general purposes of the entire membership. For the purposes of
this paragraph the term "eligible members of an association of volunteer
firefighters or volunteer ambulance workers" means members who perform
services in fire-fighting duties or members of a volunteer exempt fire
benevolent association who are entitled to benefits from the
expenditures of foreign fire insurance tax moneys, including, inactive
exempt volunteer firefighters as defined by section two hundred of the
general municipal law or in ambulance-related duties, respectively. The
amounts of insurance may be based upon a plan which permits a limited
number of selections by the members if the selections offered utilize a
consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(8) (A) A policy issued to a municipal corporation or a public housing
authority, which corporation or authority shall be deemed the
policyholder, insuring, with or without evidence of individual
insurability satisfactory to the insurer, not less than twenty-five
employees of such corporation or authority, except that in each of the
villages of Croton-on-Hudson and Lloyd Harbor not less than ten such
employees, and insuring all of such employees or all of any class or
classes thereof determined by conditions pertaining to the employment,
for amounts of insurance on each person insured based upon some plan
which will preclude individual selection. However, such a plan may
permit a limited number of selections by employees if the selections
offered utilize a consistent pattern of grading the amounts of insurance
for individual group members so that the resulting pattern of coverage
is reasonable.
(B) The premium for the policy may be paid either by the policyholder
or by the insured employees, or both, in the manner provided in section
ninety-three of the general municipal law. If a part of the premium is
to be derived from funds contributed by insured employees, the policy
must insure not less than seventy-five percent of all eligible
employees. Such policy shall provide for the payment of benefits to the
person insured or to some beneficiary or beneficiaries other than the
municipal corporation or the public housing authority, and shall also
provide for the issuance of a certificate to the policyholder for
delivery to the person insured or to such beneficiary, as evidence of
such insurance. A policy on which no part of the premium is to be
derived from funds contributed by the insured employees specifically for
their insurance must insure all eligible employees, or all except any as
to whom evidence of individual insurability is not satisfactory to the
insurer.
(C) Subject to the constitution and general laws of this state, every
municipal corporation or public housing authority is empowered to
contract by its fiscal or disbursing officer with an authorized life
insurance company for group life insurance on the lives of its
employees.
(9) A policy issued to the state covering, with or without evidence of
individual insurability satisfactory to the insurer, persons who are
managerial or confidential employees, or retired managerial or
confidential employees, of governments or public employers for the
purposes of article fourteen of the civil service law. The state shall
be deemed to be the policyholder. With respect to its employees, the
state and each other participating government or public employer shall
be deemed to be the employer. The premiums or subscription charges may
be derived from funds contributed entirely by insured employees and
retired employees or by insured employees and retired employees and the
employer jointly or entirely by the employer. If the premiums or
subscription charges are derived from funds contributed wholly by the
employer, all eligible employees are to be covered. If all or part of
the premiums or subscription charges are to be derived from funds
contributed by insured employees and if the opportunity to take such
insurance is offered to all eligible employees of an employer, then such
policy must cover not less than forty percent of such employees, the
calculation being with respect to each employer individually. The
amounts of insurance may be based upon a plan which permits a limited
number of selections by the employees if the selections offered utilize
a consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(10) A policy issued to an association, or to a trustee or trustees of
a fund established, created or maintained for the benefit of members of
one or more associations, all of whose eligible members have the same
profession, trade or occupation, which association or associations have
been organized and maintained in good faith for purposes principally
other than that of obtaining insurance and have been in active existence
for at least two years. The policy shall insure members, or employees of
members, of such association or associations, and except as provided in
paragraph five of subsection (a) of section three thousand two hundred
twenty of this chapter, such policy shall provide for the payment of
benefits to the person insured or some beneficiary or beneficiaries
other than employers and the association or associations, or any
officials, representatives, trustees or agents thereof and shall provide
for the issuance of a certificate to the persons insured or such
beneficiary as evidence of such insurance. The members or employees
eligible for the insurance under the policy shall be all the members who
have not attained any limiting age specified in the policy, or all such
members and their employees, or all of any class or classes thereof
determined by conditions pertaining to their employment or to
association membership or both. The premium for the policy shall be paid
by the association or trustee or trustees either from funds contributed
by the association or by the insured individuals, or from funds
contributed jointly by the association and insured individuals
specifically for their insurance. A policy on which all or part of the
premium is to be derived from funds contributed by the insured
individuals specifically for their insurance must insure at least fifty
percent of the then eligible individuals or a minimum of two hundred
individuals, whichever is less, excluding any as to whom evidence of
individual insurability is not satisfactory to the insurer. A policy on
which no part of the premium is to be derived from funds contributed by
the insured individuals specifically for their insurance must insure all
eligible individuals, excluding any as to whom evidence of individual
insurability is not satisfactory to the insurer. The policy must insure
at least one hundred individuals at date of issue. The amounts of
insurance on employees or members insured under the policy shall be
based upon some plan precluding individual selection. However, such a
plan may permit a limited number of selections by employees or members
if the selections offered utilize a consistent pattern of grading the
amounts of insurance for individual group members so that the resulting
pattern of coverage is reasonable. If a policy dividend is declared or a
reduction in rate is made under such a policy, the excess, if any, of
the aggregate dividends or rate reductions under the policy over the
aggregate expenditure for insurance under such policy made from
association or employer funds, including expenditures made in connection
with administration of such policy, shall be applied by the policyholder
for the sole benefit of the insured individuals.
(11) A policy, covering persons employed pursuant to 32 U.S.C. S 709,
members of the national guard on full-time training duty under
provisions of such title 32, or on active duty or active duty for
training under provisions of title 10 of the United States Code, under
the full-time manning program, issued to the adjutant general, who shall
be deemed the policyholder, or to a trustee or trustees of a fund
established, created, or maintained for the benefit of such individuals
insured, which trustee or trustees shall be deemed the policyholder, the
premium of which is to be paid by the individuals insured either
directly or by deduction from wages or salary. The policy must insure at
least fifty percent or four hundred of the individuals eligible for such
insurance, whichever is less. Such policy shall provide for the payment
of benefits to the individual insured or to some beneficiary or
beneficiaries other than to the aforesaid trustee or trustees or the
adjutant general. The policy shall also provide for the issuance of a
certificate to the policyholder for delivery to the individual insured
or to such beneficiary, as evidence of such insurance. The amounts of
insurance may be based upon a plan which permits a limited number of
selections by the members provided the selections offered utilize a
consistent pattern of grading the amounts of insurance for individual
group members so that the resulting pattern of coverage is reasonable.
(12) A policy issued to an association, or the trustee or trustees of
a trust established, or participated in, by one or more associations, to
insure association members subject to the following:
(A) Each association shall have (i) A minimum of two hundred insured
members at the policy`s date of issue;
(ii) Been organized and maintained in good faith for purposes
principally other than that of obtaining insurance;
(iii) Been in active existence for at least two years; and
(iv) A constitution and by-laws which provide that:
(I) The association holds regular meetings not less than annually to
further purposes of the association;
(II) The association collects dues or solicits contributions from
members; and
(III) The members have voting privileges and representation on the
governing board and committees.
(B) The premium for the policy shall be paid by the association or
trustees either wholly from funds contributed by the association or by
the insured individuals, or from funds contributed jointly by the
association and insured individuals. A policy on which no part of the
premium is to be derived from funds contributed by the insured
individuals specifically for their insurance must insure all eligible
individuals excluding any as to whom evidence of individual insurability
is not satisfactory to the insurer.
(C) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
an association. However, such a plan may permit a number of selections
by the association, if the selections offered utilize a consistent
pattern of grading the amounts of insurance so that the resulting
pattern of coverage is reasonable. Furthermore, such plan may permit a
limited number of selections by members if the selections offered
utilize a consistent pattern of grading the amounts of insurance for
individual group members so that the resulting pattern of coverage is
reasonable.
(D) Except as provided in paragraph five of subsection (a) of section
three thousand two hundred twenty of this chapter, such policy shall
provide for the payment of benefits to the person insured or to some
beneficiary or beneficiaries, other than the association or any
officials, representatives, trustees or agents thereof and shall provide
for the issuance of a certificate to the persons insured or such
beneficiary, as evidence of such insurance.
(E) The premiums charged must be reasonable in relation to the
benefits provided.
(13) A policy issued to any organization, or the trustee or trustees
of a trust established, or participated in, by one or more of such
organizations to insure certain persons subject to the following:
(A) The organization must be:
(i) A bank, retailer or other issuer of a credit card, charge card or
payment card which can be used to buy goods or services, and the policy
must insure holders of that card;
(ii) A bank, savings and loan association, credit union, mutual fund,
money market fund, stockbroker or other similar financial institution
regulated by state or federal law, and the policy must insure the
depositors, account holders or members of that institution.
(B) Except for a credit union where the premium shall be paid entirely
from funds contributed by the credit union, the organization or
organizations shall have a minimum of two hundred insured persons at the
policy`s date of issue.
(C) The premium for the policy shall be paid by the organization or
trustees either wholly from funds contributed by the organization or by
the insured individuals, or from funds contributed jointly by the
organization and insured individuals. A policy on which no part of the
premium is to be derived from funds contributed by the insured
individuals specifically for their insurance must cover all eligible
individuals excluding any as to whom evidence of individual insurability
is not satisfactory to the insurer.
(D) The amounts of insurance under the policy shall be based upon some
plan precluding individual selection either by the insured persons or by
the organization. However, such plan may permit a number of selections
by the organization if the selections offered utilize a consistent
pattern of grading the amounts of insurance so that the resulting
pattern of coverage is reasonable. Furthermore, such a plan may permit a
limited number of selections by members if the selections offered
utilize a consistent pattern of grading the amounts of insurance for
individual group members so that the resulting pattern of coverage is
reasonable.
(E) Except as provided in paragraph five of subsection (a) of section
three thousand two hundred twenty of this chapter, such policy shall
provide for the payment of benefits to the persons insured or to some
beneficiary or beneficiaries other than the organization, or any
official, representatives, trustees or agents thereof, and shall provide
for the issuance of a certificate to the persons insured or such
beneficiary, as evidence of such insurance.
(F) The premiums charged must be reasonable in relation to the
benefits provided.
(14) A policy issued to insure any other group approved by the
superintendent upon a finding that:
(A) There is a common enterprise or economic or social affinity or
relationship;
(B) The premiums charged are reasonable in relation to the benefits
provided; and
(C) The issuance of the policy would result in economies of
acquisition or administration, would be actuarially sound, and would not
be contrary to the best interest of the public. The superintendent shall
promulgate regulations setting forth any such groups that have been
accepted as qualifying pursuant to this paragraph.
(c) (1) No domestic, foreign or alien life insurance company shall be
permitted to do business in this state if it hereafter issues, within or
without this state, any policy of group life insurance which on its
issuance does not appear to be self-supporting on reasonable assumptions
as to interest, mortality and expense.
(2) Anything in this chapter to the contrary notwithstanding, any
group life insurance policy issued or delivered in this state may
provide for readjustment of the rate of premium based on the experience
thereunder, at the end of the first year or of any subsequent year of
insurance thereunder, and such readjustment may be made retroactive only
for such policy year. Any such rate readjustment shall be computed on a
basis which is equitable to all group life insurance policies.
(d) In the event a group life insurance policy hereafter issued for
delivery in this state permits a certificate holder to convert to
another type of life insurance within a specified time after the
happening of an event, such certificate holder shall be notified of such
privilege and its duration within fifteen days before or after the
happening of the event, provided that if such notice be given more than
fifteen days, but less than ninety days after the happening of such
event, the time allowed for the exercise of such privilege of conversion
shall be extended for forty-five days after the giving of such notice.
If such notice be not given within ninety days after the happening of
the event, the time allowed for the exercise of such conversion
privilege shall expire at the end of such ninety days. Written notice by
the policyholder given to the certificate holder or mailed to the
certificate holder at his last known address, or written notice by the
insurer mailed to the certificate holder at the last address furnished
to the insurer by the policyholder, shall be deemed full compliance with
the provisions of this subsection for the giving of notice.
(e) Each domestic insurer and each foreign or alien insurer doing
business in this state shall file with the superintendent its schedule
of rates of commissions, compensation and other fees or allowances to
agents and brokers pertaining to the solicitation or sale of group life
insurance and of fees or allowances, exclusive of amounts payable to
persons who are in the regular employ of the insurer other than as
agent, to any individuals, firms or corporations pertaining to the
service or administration of group life insurance, whether transacted
within or without this state. An insurer may revise such schedules from
time to time, and shall file such revised schedules with the
superintendent. No insurer shall pay to an agent, agents, broker or
brokers or any combination of licensees for the solicitation or sale of
a policy of group life insurance or for any other purpose related to
such group insurance any commission, compensation or other fees or
allowances in excess of that determined on the basis of the schedules of
such insurer as then on file with the superintendent; nor shall such
insurer pay for services pertaining to the service or administration
thereof to any individual, firm or corporation any fees, commissions or
allowances in excess of that determined on the basis of the schedules of
such insurer as then on file with the superintendent or for such
services except such as are rendered in behalf of such insurer,
provided, however, nothing contained herein shall apply to or affect the
computation of dividends or experience rating credits.
(f) Any policy of group life insurance may include provisions for the
payment by the insurer of life insurance benefits upon the death of the
spouse of the insured employee or member or his or her child dependent
upon him or her for support and maintenance or any other person
dependent upon the insured employee or member, provided that insurance
upon the life of the spouse or other person shall not exceed the amount
of insurance for which the employee or member is eligible, nor shall the
insurance upon the life of each dependent child so insured exceed
twenty-five thousand dollars. A policy of insurance issued in accordance
with paragraph three of subsection (b) of this section, while it may
provide coverage for a spouse of the insured employee or member, it
shall not, however, provide coverage for a dependent child of the
insured employee or member. An insurer providing group life insurance
for a spouse or dependent children shall require evidence of
insurability sufficient to protect against substantial adverse
selection.
(g) An insurer authorized or licensed to do business in this state may
solicit or make available credit life insurance coverage in this state
as provided for in paragraph three of subsection (b) of this section
under a policy of group life insurance only if the policy is delivered
to policyholders described in and conforming to the definition in
paragraph three of subsection (b) of this section, and with respect to
all credit transactions entered into in this state, the policy fully
complies with the requirements of paragraph twelve of subsection (a) of
section three thousand two hundred twenty of this chapter.
(h)(1) Any dividend hereafter apportioned on any participating group
insurance policy, or any rate reduction hereafter made or continued on
any non-participating group policy for the first or any subsequent year
of insurance under any such policy heretofore or hereafter issued under
paragraph twelve, thirteen or fourteen of subsection (b) of this
section, may be applied to reduce the policyholder`s part of the cost of
such policy, except that the excess, if any, of the insured`s aggregate
contribution under the policy over the net cost (gross premium less
dividends or rate reductions) of the insurance shall be applied at the
discretion of the insurer either as a cash payment to the insured or to
reduce the insured`s premium, unless the insured assigns the dividend or
rate reduction to the policyholder. If a dividend or rate reduction is
payable upon termination of the policy the insurer shall either make
payment to the insured or to the policyholder upon receipt of a
certification from the policyholder that the dividend or rate reduction
will be distributed by the policyholder to the insureds or applied to
reduce the insured`s premium.
(2) The provisions of paragraph one of this subsection shall apply to
New York residents insured under a policy issued in any other
jurisdiction to a group which is not of the type described in paragraphs
one through eleven of subsection (b) of this section.
(i) (1) The provisions of subsections (d), (f) and (h) of this section
shall not apply to policies issued under the authority of subsection (d)
of section three thousand two hundred five of this chapter, provided
such policies are issued in compliance with the requirements of
subsection (d) and subsection (e) of section three thousand two hundred
five of this chapter.
(2) Any life insurance company authorized to do business in this state
may deliver in this state policies of group insurance issued to an
employer or to the trustee of a fund established by one or more
employers, or one or more employers and one or more labor unions without
complying with the provisions of paragraphs one and four of subsection
(b) of this section where group insurance is issued under the authority
of subsection (d) of section three thousand two hundred five of this
chapter.
S 4217. Valuation of insurance policies and contracts. (a) (1) The
superintendent shall annually value, or cause to be valued, the reserve
liabilities (hereinafter called reserves) for all outstanding 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 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. In calculating such
reserves, the superintendent may use group methods and approximate
averages for fractions of a year or otherwise.
(2) In lieu of the valuation of the reserves herein required of any
foreign or alien company, the superintendent may accept any valuation
made, or caused to be made, by the insurance supervisory official of any
state or other jurisdiction when such valuation complies with the
minimum standard herein provided and if the official of such state or
jurisdiction accepts as sufficient and valid for all legal purposes the
certificate of valuation of the superintendent when such certificate
states the valuation to have been made in a specified manner according
to which the aggregate reserves would be at least as large as if they
had been computed in the manner prescribed by the law of that state or
jurisdiction.
(3) (A) The superintendent may, in his discretion, vary the standards
of mortality applicable to policies of insurance on substandard lives
and other extra-hazardous lives issued by any life insurance company
doing business in this state.
(B) He may also, in his discretion, vary the standards of interest and
mortality applicable to contracts issued by an alien insurer in
countries other than the United States, if such alien insurer maintains
the trusteed surplus prescribed by section one thousand three hundred
twelve of this chapter.
(4) (A) Any life insurance company doing business in this state which
has adopted as a basis for the valuation of its insurance policies and
contracts standards producing greater reserves in the aggregate than the
minimum standards herein prescribed may continue to use such higher
standards as a basis of valuation.
(B) After January first, nineteen hundred forty, any life insurance
company doing business in this state may, subject to the provisions of
paragraph eight of subsection (c) of this section, adopt as the basis
for the valuation of its insurance policies and contracts standards
producing greater reserves in the aggregate than the minimum standards
herein prescribed; and any such company which shall have at any time
adopted such higher standards of valuation may, with the approval of the
superintendent, adopt lower standards of valuation, but in no case lower
than the minimum standards herein prescribed, provided, however, that,
for the purposes of this paragraph, the holding of additional reserves
determined by a qualified actuary to be necessary to render the opinion
required by subsection (e) of this section shall not be deemed to be the
adoption of a higher standard of valuation.
(C) The superintendent may approve any such change if he finds that
the proposed standards are for the best interests of the holders of the
policies and contracts and annuitants of such company.
(D) Nothing contained herein shall be deemed to affect the contractual
rights or obligations of the holder of any such policy or contract.
(b) (1) This subsection shall apply only to those policies and
contracts issued prior to the operative date of section four thousand
two hundred twenty-one of this article.
(2) Except as provided in paragraph six hereof the legal minimum
standards for the valuation of life insurance contracts shall be as
follows:
(A) For the valuation of all such contracts issued before the first
day of January, nineteen hundred one, it shall be the Actuaries` or
Combined Experience Table of Mortality with interest at four percent per
annum.
(B) For the valuation of such contracts issued on or after said day,
except as provided in subparagraphs (C) and (D) hereof, it shall be the
American Experience Table of Mortality with Craig`s extension for ages
under ten years and with interest at three and one-half percent per
annum.
(C) For the valuation of group term insurance policies under which
premium rates are not guaranteed for a period in excess of five years,
it shall be the American Men Ultimate Table of Mortality with interest
at three and one-half percent per annum.
(D) Any life insurance company may, at its option, value its life
insurance contracts issued on or after the first day of January,
nineteen hundred thirty, in accordance with their terms on the basis of
the American Men Ultimate Table of Mortality, supplemented by such
extension and modification for ages under twenty years, as may be
approved by the superintendent, with interest at three and one-half
percent per annum by the level net premium method or by the modified
preliminary term method prescribed in paragraph four hereof.
(3) Life insurance policies issued on or after the first day of
January, nineteen hundred seven, may, at the option of the insurer, be
valued in accordance with their terms by the modified preliminary term
method prescribed in paragraph four hereof, or in accordance with the
select and ultimate method on the basis that the rate of mortality
during the first five years after the issuance of said contracts
respectively shall be calculated according to the following percentages
of the rates shown by the American Experience Table of Mortality:
For the first insurance year, fifty percent thereof; for the second
insurance year, sixty-five percent thereof; for the third insurance
year, seventy-five percent thereof; for the fourth insurance year,
eighty-five percent thereof; and for the fifth insurance year,
ninety-five percent thereof.
(4) (A) Life insurance policies may provide for not more than one year
of preliminary term insurance by incorporating in the provisions thereof
specifying the premium consideration to be received by the insurer, a
clause plainly showing that the first year`s insurance under such
policies is term insurance, purchased by the whole or a part of the
premium to be received during the first policy year.
(B) Such policies may, in accordance with their terms, be valued on
the basis of the mortality tables and interest rates prescribed in
paragraph two hereof, by the modified preliminary term plan described as
follows: If the premium charged for term insurance under a limited
payment life preliminary term policy providing for the payment of all
premiums thereon in less than twenty years from the date of the policy,
or under an endowment preliminary term policy, exceeds that charged for
like insurance under twenty payment life preliminary term policies of
the same company, the reserve thereon at the end of any year, including
the first, shall be not less than the reserve on a twenty payment life
preliminary term policy issued in the same year and at the same age,
together with an amount which shall be equivalent to the accumulation of
a level net premium sufficient to provide for a pure endowment at the
end of the premium paying period equal to the difference between items
(i) and (ii) hereof as follows: (i) the value at the end of such period
of such a twenty payment life preliminary term policy and (ii) the full
level net premium reserve at such time of such a limited payment life or
endowment policy.
(C) The premium paying period referred to above is the period during
which premiums are concurrently payable under such twenty payment life
preliminary term policy and such limited payment life or endowment
policy.
(5) (A) The legal minimum standard for the valuation of all individual
annuity contracts issued on or after January first, nineteen hundred
forty (including life annuities provided or available under optional
modes of settlement in insurance contracts issued on or after such date)
shall be the Combined Annuity Tables with age set back one year, with
interest at three and one-half percent per annum.
(B) The legal minimum standard for the valuation of all individual
annuity contracts issued prior to January first, nineteen hundred forty
(including annuities provided or available under optional modes of
settlement in insurance contracts issued prior to such date) shall be in
accordance with the provisions of law applicable thereto as of the date
of issuance.
(C) Except as otherwise provided in paragraphs three and four of
subsection (c) hereof for group annuity and pure endowment contracts,
the legal minimum standard for the valuation of all group annuity
contracts shall be the 1971 Group Annuity Mortality Table, or any
modification of this table approved by the superintendent, and five
percent interest.
(D) Annuities, annuity benefits and guaranteed interest contracts to
which this subsection applies shall be subject to item (vi) of
subparagraph (B) of paragraph four of subsection (c) of this section.
(6) (A) The legal minimum standard for the valuation of all industrial
life insurance policies issued on or after January first, nineteen
hundred forty shall, at the option of the company, be either (i) the
1941 Standard Industrial Mortality Table or the 1941 Substandard
Industrial Mortality Table, with interest at three and one-half percent
per annum by the net level premium method, or (ii) either of the tables
specified in item (i) hereof, by the modified preliminary term method
prescribed in paragraph four hereof, in accordance with the terms of the
policy, or (iii) in the case of policies issued on the monthly premium
plan, the New York Standard Intermediate Table of Mortality (1907 Table)
with interest at three and one-half percent per annum. In lieu of such
tables, at the option of the company, the Standard Industrial Mortality
Table (1907) or the Substandard Industrial Mortality Table (1907) may be
used with respect to such policies issued prior to January first,
nineteen hundred forty-two.
(B) The legal minimum standard for the valuation of all industrial
life insurance policies issued prior to January first, nineteen hundred
forty shall be the minimum standard required by the law of this state in
force at the date of issuance.
(7) The legal minimum standard for the valuation of all accidental
death benefits and disability benefits, provided in connection with or
supplemental to life insurance policies or annuity contracts shall be
such tables as the superintendent may prescribe.
(c) (1) This subsection shall apply only to policies and contracts
issued on or after the operative date of section four thousand two
hundred twenty-one of this article, except as otherwise provided in
paragraphs three and four of this subsection for group annuity and pure
endowment contracts issued prior to such operative date.
(2) Except as otherwise provided in paragraphs three, four and ten of
this subsection, the minimum standard for the valuation of all such
policies and contracts shall be the commissioners reserve valuation
method defined in paragraph six of this subsection and in section four
thousand two hundred eighteen of this article, three percent interest
for all life insurance policies issued prior to January first, nineteen
hundred sixty-six and for all individual annuity and pure endowment
contracts issued prior to January first, nineteen hundred sixty, or
three and one-half percent interest for all life insurance policies
issued on or after January first, nineteen hundred sixty-six and prior
to June thirteenth, nineteen hundred seventy-four and for all individual
annuity and pure endowment contracts issued on or after January first,
nineteen hundred sixty, and prior to the operative date of paragraph
three of this subsection, or four percent interest for all life
insurance policies issued on or after June thirteenth, nineteen hundred
seventy-four and prior to January first, nineteen hundred seventy-nine,
or four and one-half percent interest for all life insurance policies,
issued on or after January first, nineteen hundred seventy-nine, or five
percent interest for all annuities purchased or to be purchased under
group annuity contracts, and the following tables:
(A) For all ordinary policies of life insurance issued on the standard
basis, excluding any disability and accidental death benefits in such
policies, the Commissioners 1941 Standard Ordinary Mortality Table for
such policies issued prior to the operative date of subsection (h) of
section four thousand two hundred twenty-one of this article, the
Commissioners 1958 Standard Ordinary Mortality Table for such policies
issued on or after such operative date and prior to the operative date
of subsection (k) of such section; provided that for any category of
such policies issued on female risks all modified net premiums and
present values may be calculated according to an age not more than six
years younger than the actual age of the insured, and for such policies
issued on or after the operative date of such subsection, and, at the
option of the company, for such policies not providing for nonforfeiture
benefits which are issued on or after nineteen hundred eighty-one and
prior to the operative date of such subsection, (i) the Commissioners
1980 Standard Ordinary Mortality Table, or (ii) at the election of the
company for any one or more specified plans of life insurance, the
Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year
Select Mortality Factors, or (iii) any ordinary mortality table, adopted
after nineteen hundred eighty by the National Association of Insurance
Commissioners, that is approved by the superintendent for use in
determining the minimum standard of valuation for such policies, or (iv)
any other ordinary mortality table, or any modification of any of the
foregoing tables, approved by the superintendent for any specified class
or classes of risks.
(B) For all industrial life insurance policies issued on the standard
basis, excluding any disability and accidental death benefits in such
policies, the 1941 Standard Industrial Mortality Table for such policies
issued prior to the operative date of subsection (i) of section four
thousand two hundred twenty-one of this article, and for such policies
issued on or after such operative date (i) the Commissioners 1961
Standard Industrial Mortality Table, or (ii) any industrial mortality
table, adopted after nineteen hundred eighty by the National Association
of Insurance Commissioners, that is approved by the superintendent for
use in determining the minimum standard of valuation for such policies,
or (iii) any other industrial mortality table, or any modification of
any of the foregoing tables, approved by the superintendent for any
specified class or classes of risks.
(C) For individual annuity and pure endowment contracts, excluding any
disability and accidental death benefits in such contracts,--the 1937
Standard Annuity Mortality Table or, at the option of the company, the
Annuity Mortality Table for 1949, Ultimate, or any modification of
either of these tables approved by the superintendent.
(D) For group annuity and pure endowment contracts, excluding any
disability and accidental death benefits in such contracts,--the 1971
Group Annuity Mortality Table or any modification of this table approved
by the superintendent.
(E) For total and permanent disability benefits in or supplementary to
ordinary policies or contracts--for policies or contracts issued on or
after January first, nineteen hundred sixty-six, the tables of Period 2
disablement rates and the 1930 to 1950 termination rates of the 1952
Disability Study of the Society of Actuaries, with due regard to the
type of benefits or any tables of disablement rates and termination
rates, adopted after nineteen hundred eighty by the National Association
of Insurance Commissioners, that are approved by the superintendent for
use in determining the minimum standard of valuation for such policies
or any other tables of disablement rates and termination rates, or any
modification of any of the foregoing tables, approved by the
superintendent for any specified class or classes of risks; for policies
or contracts issued prior to January first, nineteen hundred sixty-six,
either such tables or, at the option of the company, the Class (3)
Disability Table (1926). Any such table shall, for active lives, be
combined with a mortality table permitted for calculating the reserves
for life insurance policies.
(F) For accidental death benefits in or supplementary to policies--
for policies issued on or after January first, nineteen hundred
sixty-six, the 1959 Accidental Death Benefits Table or any accidental
death benefits table, adopted after nineteen hundred eighty by the
National Association of Insurance Commissioners, that is approved by the
superintendent for use in determining the minimum standard of valuation
for such policies or any other accidental death benefits table, or any
modification of any of the foregoing tables, approved by the
superintendent for any specified class or classes of risks; for policies
issued prior to January first, nineteen hundred sixty-six, either such
table or, at the option of the company, the Inter-Company Double
Indemnity Mortality Table. Any such table shall be combined with a
mortality table permitted for calculating the reserves for life
insurance policies.
(G) For group life insurance, life insurance issued on the substandard
basis, annuities involving life contingencies provided or available
under optional modes of settlement in life insurance policies or annuity
contracts and other special benefits--such tables as may be approved by
the superintendent.
(3) Except as provided in paragraph four hereof, the minimum standard
for the valuation of all individual annuity and pure endowment contracts
issued on or after the operative date of this paragraph, as defined
herein, and for all annuities and pure endowments purchased or to be
purchased on or after the operative date under group annuity and pure
endowment contracts, shall be the commissioners reserve valuation method
defined in paragraph six hereof and the following tables and interest
rates:
(A) For individual annuity and pure endowment contracts issued prior
to January first, nineteen hundred seventy-nine, excluding any
disability and accidental death benefits in such contracts and excluding
any annuities, purchased under individual deferred annuity contracts, to
which the company has elected to have subparagraph (B) hereof apply--the
1971 Individual Annuity Mortality Table, or any modification of this
table approved by the superintendent, and six percent interest for
single premium immediate annuity contracts, and four percent interest
for all other individual annuity and pure endowment contracts, or such
higher rate or rates of interest for any of such contracts as may be
approved from time to time by the superintendent.
(B) For individual annuity and pure endowment contracts issued on or
after January first, nineteen hundred seventy-nine, excluding any
disability and accidental death benefits in such contracts, and, at the
election of the company, for annuities purchased on or after such date
under individual deferred annuity contracts--the 1971 Individual Annuity
Mortality Table, or any individual annuity mortality table, adopted
after nineteen hundred eighty by the National Association of Insurance
Commissioners, that is approved by the superintendent for use in
determining the minimum standard of valuation for such contracts, or any
other individual annuity mortality table, or any modification of any of
the foregoing tables, approved by the superintendent, and seven and
one-half percent interest for all single premium individual immediate
annuity contracts and all annuities, purchased under individual deferred
annuity contracts, to which the company has elected to have this
subparagraph apply and five and one-half percent interest for all other
individual annuity and pure endowment contracts, excluding any
annuities, purchased under deferred annuity contracts, for which the
interest rate is seven and one-half percent or such higher rate or rates
of interest for any of such contracts or annuities purchased under
deferred annuity contracts as may be approved from time to time by the
superintendent.
(C) For all annuities and pure endowments purchased or to be purchased
prior to January first, nineteen hundred seventy-seven under group
annuity and pure endowment contracts, excluding any disability and
accidental death benefits purchased under such contracts,--the 1971
Group Annuity Mortality Table, or any modification of this table
approved by the superintendent, and six percent interest, or such higher
rate or rates of interest for any of such annuities and pure endowments
as may be approved from time to time by the superintendent.
(D) For all annuities and pure endowments purchased or to be purchased
on or after January first, nineteen hundred seventy-seven under group
annuity and pure endowment contracts, excluding any disability and
accidental death benefits purchased under such contracts--the 1971 Group
Annuity Mortality Table, or any group annuity mortality table, adopted
after nineteen hundred eighty by the National Association of Insurance
Commissioners, that is approved by the superintendent for use in
determining the minimum standard of valuation for such annuities and
pure endowments, or any other group annuity mortality table, or any
modification of any of the foregoing tables, approved by the
superintendent, and seven and one-half percent interest, or such higher
rate or rates of interest for any such annuities and pure endowments as
may be approved from time to time by the superintendent.
(E) After June thirteenth, nineteen hundred seventy-four, any company
may file with the superintendent a written notice of its election to
comply with the provisions of this paragraph after a specified date
before January first, nineteen hundred seventy-nine, which shall be the
operative date of this paragraph for such company, provided that an
insurer may elect a different operative date for individual annuity and
pure endowment contracts from that elected for group annuity and pure
endowment contracts. If a company makes no such election, the operative
date of this paragraph for such company shall be January first, nineteen
hundred seventy-nine.
(F) Annuities, annuity benefits and guaranteed interest contracts to
which this subsection applies shall be subject to item (vi) of
subparagraph (B) of paragraph four of this subsection.
(4) (A) The interest rates used in determining the minimum standard
for the valuation of:
(i) all life insurance policies issued in a particular calendar year,
on or after January first, nineteen hundred eighty-two,
(ii) all individual annuity and pure endowment contracts issued in a
particular calendar year on or after January first, nineteen hundred
eighty-two, and, at the option of the company, all annuities purchased
in a particular calendar year on or after such date under individual
deferred annuity contracts issued prior thereto,
(iii) all annuities and pure endowments purchased in a particular
calendar year on or after January first, nineteen hundred eighty-two
under group annuity and pure endowment contracts, and
(iv) the net increase, if any, in a particular calendar year after
January first, nineteen hundred eighty-two, in amounts held unde