Statement that the proposed action amending 11 NYCRR Part 98 (Insurance Regulation 147) is a consensus rulemaking and that no person is likely to object to its adoption.
In February 2013, the Department of Financial Services ("Department") proposed, and promulgated as an emergency measure, its first Fourth Amendment to Part 98 (Insurance Regulation 147), which revised reserve standards for certain universal life insurance policies in conformity with National Association of Insurance Commissioners ("NAIC") Actuarial Guideline 38. The emergency measure was re-promulgated in May and July, 2013. The Department allowed the last emergency measure to expire in September 2013. The Department also withdrew its proposal on October 16, 2013, because the rule resulted in insurers increasing their reserves for in-force business by less than $1 billion in the aggregate, rather than by the $10 billion that had been projected by the NAIC Joint Working Group that drafted Actuarial Guideline 38. Superintendent Lawsky addressed the matter in a letter to the NAIC, which is available at the following link: http://www.dfs.ny.gov/about/press2013/pr1309111-link.pdf. Thus, the rule currently in effect is the Third Amendment to Part 98 (Insurance Regulation 147).
Current Section 98.9(c)(2)(viii), which permits insurers to use certain prescribed lapse assumptions, is subject to "sunset" provisions that would make the section inoperable with respect to policies written on or after January 1, 2014. The Life Insurance Council of New York, Inc. ("LICONY"), a life insurance industry trade association that represents insurers subject to the rule, requested that the Department remove the January 1, 2014 sunset provisions to ensure that life insurers doing business in New York remain competitive. This amendment remedies the Department's unintended expiration of the lapse assumptions provided in Section 98.9(c)(2)(viii) by removing the January 1, 2014 sunset provisions.
Accordingly, this rulemaking is determined to be a consensus rulemaking, as defined in State Administrative Procedure Act ("SAPA") § 102(11), because no person is likely to object to its adoption, and it is proposed pursuant to SAPA § 202(1)(b)(i). Therefore, this rulemaking is exempt from the requirement to file a Regulatory Impact Statement, Regulatory Flexibility Analysis for Small Businesses and Local Governments, and a Rural Area Flexibility Analysis.