DFS Proposes New Regulation to Protect New Yorkers from Unjustified Life Insurance Premium Increases
Financial Services Superintendent
"Under New York law, life insurers may only increase the cost of insurance on in-force policies when the experience justifies it and only in a way that is fair and equitable," said Superintendent Vullo. "Many existing life insurance and annuity policies are owned by
Decreased profitability due to low interest rates and, in some cases, adverse mortality experience, has moved certain life insurers to significantly increase the cost of insurance on older life insurance policies. In response to consumer complaints, a DFS review found that some insurers have not been implementing these increases in accordance with DFS approved policy provisions and the relevant provisions of the New York Insurance Law.
In addition to notifying DFS, the proposed regulation requires life insurers to notify consumers at least 60 days prior to an adverse change in non-guaranteed elements of an in-force life insurance or annuity policy.
"Regulators should know ahead of time about any planned price increase so they can make sure it's justified, and consumers should know so they're prepared," said
The proposed regulation is subject to a 45 day public comment period following publication in the
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