The Office of General Counsel issued the following informal opinion on December 18, 2002, representing the position of the New York State Insurance Department.
Re: N.Y. Comp. Codes R. & Regs. tit. 11, § 51.1-51.8 (1998) (Reg. 60) and Unauthorized Insurers
Is N.Y. Comp. Codes R. & Regs. tit. 11, § 51.1-51.8 (1998) (Reg. 60) applicable to an unauthorized insurer that issued a life insurance policy or annuity contract that is being replaced?
No. Regulation 60 is not applicable to unauthorized insurers. However, the authorized insurer that is replacing the life insurance policy or annuity contract issued by an unauthorized insurer is subject to the requirements of the regulation.
An individual lived in a state other than New York and purchased an annuity contract from an insurer that is licensed in that state but is not licensed in New York. The individual moved to New York and now wishes to replace that annuity contract with one that is issued by an insurer licensed in New York.
One of the purposes of Regulation 60 is stated in Section 51.1(a) as:
To implement the Insurance Law of New York by regulating the acts and practices of insurers, agents and other licensees of the Insurance Department with respect to the internal and external replacement of life insurance policies and annuity contracts.
An unauthorized insurer is not a licensee of the Department and, accordingly, is not subject to the requirements of the regulation. However, this does not relieve the authorized insurer, agent or other licensee from their obligations under the regulation. The agent must comply with section 51.5 of Regulation 60; the insurer must comply with section 51.6 of Regulation 60; and both the agent and the insurer are subject to section 51.7 of Regulation 60.
In the event that the unauthorized insurer does not submit the requested information necessary to complete the "Disclosure Statement" within the prescribed time, the agent replacing the life insurance policy or annuity contract may, pursuant to section 51.5(c)(2), use, and the insurer replacing the policy or contract shall review and may accept, good faith approximations based on the information available.
For further information you may contact Supervising Attorney Joan Siegel at the New York City Office.