Department of Financial Services Life Bureau Filing Guidance Note

Guidance Date: July 17, 2023

Filing Guidance related to Insurance Law §§ 2606(a)(1) and 4224(a)(1)

Pursuant to Insurance Circular Letter No. 6 (2023), the Life Bureau is instituting new procedures to address compliance with Insurance Law §§ 2606(a)(1) and 4224(a)(1) during the Insurance Law § 3201 policy form approval process.  This Guidance applies to all individual products and certain group products that are used to market individual coverage through a group format, including any life insurance or annuity contracts sold through groups defined in Insurance Law §§ 4216(b)(13) and (14) and 4238(b)(6) and (10).  However, this Guidance does not apply to group non-contributory coverage. 

I.  Filing Procedures

The SERFF Filing Description should:

  1. Include the information discussed in Insurance Circular Letter No. 12 (1976) and Insurance Circular Letter No. 6 (1963).  The information discussed in Insurance Circular Letter No. 12 (1976) should be included in the filing description for all submissions of life insurance and annuity policy forms, whether written out of the general account or a separate account.  While insurers should identify the level of underwriting (i.e., full underwriting, guaranteed issue, simplified underwriting or accelerated underwriting) used for the policy forms being submitted, it is not necessary to include detailed underwriting guidelines as part of a policy form filing.  The Department does not plan to review underwriting guidelines or advise insurers on what risks to select.  The purpose of the review is not to question specific risk classifications made by an insurer in its underwriting guidelines, but rather, to ensure consistency and equitable treatment in the application of those requirements. 
  2. Identify the type of insurance from section II below and identify by form number, approval date, and Department file number any other approved policy forms within the identified type of insurance.  This also can be provided under the SERFF Supporting Documentation tab instead of the SERFF Filing Description.
  3. Indicate whether the policy forms will be sold in the general market or a separate recognized market set forth in section III of this Guidance.
  4. Indicate whether there is a recognized product distinction set forth in section IV of this Guidance that distinguishes the new policy form from all other policy forms within the same type of insurance and within the same market.  If the insurer has other policy forms with the same recognized product distinction, the filing description should identify those other policy forms and describe how the new policy forms differ from the others with that product distinction.
  5. Please direct any questions about policy form filing procedures to [email protected]

II.  Types of Insurance

Note that this list is similar to, but not exactly the same as, the SERFF TOI list. 

  1. Annuity
    1. Deferred Fixed (with or without a market value adjustment)
    2. Deferred Variable
    3. Deferred Fixed (with or without a market value adjustment) and Variable
    4. Deferred Fixed Index-Linked (whether or not variable accounts are also included in the contract)
    5. Deferred Non-Guaranteed Index-Linked (a.k.a. RILA, Buffer/Floor Annuity) (whether or not variable accounts are also included in the contract)
    6. Paid-Up Deferred Annuity (aka Deferred Income Annuity)
    7. Immediate Fixed
    8. Immediate Variable
    9. Immediate Fixed and Variable
  2. Life Insurance
    1. Endowment
    2. Term
    3. Return of Premium Term
    4. Variable
    5. Whole
    6. Universal Life
    7. Universal Life with Secondary Guarantee
    8. Guaranteed Universal Life
    9. Index Universal Life
    10. Variable Universal Life

III. Recognized Market or Distribution Channel Distinctions

  1. The Department has not objected to different versions of a product being sold in the markets or through the channels set forth below.  Recognition of these markets or channels means that the Department does not object to the use of different policy forms in these markets or through these channels or deviation from the insurer’s regular individual underwriting rules for the same policy form, such as levels of underwriting, pricing, and non-forfeiture values.
    1. Pension Trust
    2. Employer-Employee Payroll Deduction
    3. Non-tax qualified, non-ERISA Deferred Compensation
    4. Senior Citizen Graded Death Benefit Market
    5. Wholesale Life
    6. COLI (Corporate Owned Life Insurance) Market
    7. Direct Response (also called home office solicitation, mail order or internet-only sales)
    8. Career Agent (also called captive agent)
    9. Banks/Financial Institution
    10. Registered Security Dealers/Broker (Fee-based products)
  2. Recognized market or distribution channel distinctions apply to the broad market or channel listed above and not to individual outlets within the channel, such as specific banks or financial institutions.  Within each market or channel, there can be no unfair discrimination between individuals of the same class and of equal expectation of life, in the amount of interest being credited, the amount or payment or return of premium, or rates charges, or dividends or other benefits or in any of the terms and conditions of the policy or contract.  For example, while the Department finds adequate justification for a distinction in the Bank/Financial Institution channel, similarly situated consumers with an equal expectation of life should receive the same version of the product regardless of which bank or financial institution sells it to them.

IV.  Recognized Product Distinctions

  1. Single premium versus flexible premium
  2. Fixed premium versus flexible premium
  3. Face amount size band limitation with no overlap - i.e., one policy available for issue amounts of $25,000 to $99,999 and the other policy available for $100,000 and over
  4. Issue age banding with no overlap
  5. Survivorship/Joint Life versus single life
  6. Private Placement versus non-private placement
  7. Decreasing versus increasing face amount term
  8. Level premium term plans versus increasing premium term
  9. Economatic or comprehensive life arrangement whole life policy
  10. Banding by number of employees within the individual payroll deduction market or the individual COLI market, provided the banding is sufficiently explained in the submission and based on objective criteria 
  11. Other product distinctions approved by the Department on a case-by-case basis.  An insurer may demonstrate the need for two or more versions of a product in the same type of insurance and in the same market if one product or version is not always better than the other versions (suitability issue), the different versions address different consumer needs or goals, and all versions are listed on the application.