NEW YORK STATE
INSURANCE DEPARTMENT

FIRST AMENDMENT TO REGULATION NO. 65
(11 NYCRR 202)

COMPENSATION TO AGENTS AND FEES OR OTHER ALLOWANCES PAYABLE FOR INDIVIDUAL LIFE INSURANCE ISSUED ON A MASS MERCHANDISING BASIS UNDER PLANS SPONSORED BY UNION – MANAGEMENT WELFARE FUNDS

I, Gregory V. Serio, Superintendent of Insurance of the State of New York, pursuant to the authority granted by Sections 201 and 301 of the Insurance Law, do hereby promulgate the following First Amendment to Part 202 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation No. 65), to take effect upon publication in the State Register.

(NEW MATTER UNDERLINED; DELETED MATTER IN BRACKETS)

Subdivisions (a) and (b) of Section 202.1 are amended to read as follows:

(a) The term "employee welfare fund" shall mean the fund as defined in section [37-a(1)] 4402(a) of the Insurance Law.

(b) The term "union" shall mean a labor organization as defined in section [37-a(8)] 4402(g) of the Insurance Law.

Section 202.3 is amended to read as follows:

202.3 Fees or other allowances.

[(a)] An insurer shall not make any payment of fees or allowances of whatever nature, and by whatever name, to any person, firm or corporation in connection with the sale or administration of policies covered by this Part other than commissions to an insurance agent or general agent, except in reimbursement for the reasonable value of one or both of the following services performed on behalf of the insurer:

(1) Maintaining essential employee records.

(2) Billing premiums.

In no event shall any payment for the above services exceed the estimated cost to the insurer of performing such services itself.

[(b) Policies covered by this Part shall be excluded in the determination of expense reimbursement allowance credits as defined in section 11.2(a) of Part 11 of this Title (Regulation No. 49) entitled "Reimbursement for Office and Other Agency Expenses Incurred in Connection with the Acquisition and Servicing of Ordinary Life Insurance Policies and Ordinary Annuity Contracts."]

I, Gregory V. Serio, Superintendent of Insurance of the State of New York, do hereby certify that the foregoing is the First Amendment to Part 202 of Title 11 of the Official Compilation of Codes, Rules and Regulations of the State of New York (Regulation 65), entitled " Compensation To Agents And Fees Or Other Allowances Payable For Individual Life Insurance Issued On A Mass Merchandising Basis Under Plans Sponsored By Union –Management Welfare Funds", promulgated by me on October 28, 2003, pursuant to the authority granted by Sections 201 and 301 of the Insurance Law, to take effect upon publication in the State Register.

Pursuant to the provisions of the State Administrative Procedure Act, prior notice of the proposed regulation was published in the State Register on August 20, 2003. No other publication or prior notice is required by statute.

__________________________________________

Gregory V. Serio
Superintendent of Insurance

October 28, 2003