S. 7765(Seward)/A. 111974(Morelle)
Grace Periods, Life Insurance
Summary: The bill makes the grace period and premium due notice requirements for flexible premium life insurance products (universal and variable universal life) consistent with the provisions currently set forth in N.Y. Comp. Codes R. & Regs. tit. 11, Part 54 (2003) (Regulation 77), as follows:
- Insurance Law § 3203(a)(1) is amended to require a life insurance policy in which the amount and frequency of premiums may vary, to contain a provision that entitles the policyholder to a 61-day grace period within which they are required to pay a sufficient premium to keep the policy in force for three months.
- Insurance Law § 3211(a)(1) is amended to prohibit an insurer from terminating, for non-payment of premium, installment, or interest on a policy loan, within a year of nonpayment, a life insurance policy in which the amount and frequency of premiums may vary, unless the insurer mails a notice of premium due to the policyholder within 30 days after the day that the insurer determines that the net cash surrender value under the policy is insufficient to pay the total charges that are necessary to keep the policy in force.
- Insurance Law § 3211(b)(1) is amended to require an insurer or fraternal benefit society to mail a premium due notice to the “policyowner,” not the insured person.
- Insurance Law § 4510(a)(1) is amended to require certificates issued by fraternal benefit societies, in which the amount and frequency of premiums may vary, to set forth a provision that entitles the insured to a grace period of at least 61 days within which to pay a sufficient premium to keep the certificate in force for three months.
Effective Date: Ninety days after enactment.
Last Action: Approved and signed by the Governor on July 7, 2008 (Chapter 264 of the Laws of 2008).