The New York State Department of Insurance (NYSID) demonstrated its flexibility and good sense yesterday when it allowed us to remove two words from its recommended disclosure language regarding the impact of DOMA (the federal Defense of Marriage Act) on annuity products.
As we have discussed here previously, the NYSID now requires that annuity products warn lesbians and gay men who are legally married to their same-sex partners that their tax-related benefits are limited by the federal government. This is because the federal government, including the IRS, defines marriage as between one man and one woman. NYSID recommends that specific disclosure language be included in annuity contracts in its Supplement No. 1 to Circular Letter No. 27 (2008). If different language is used, the product cannot be submitted in a certified filing, but must be submitted for review and approval, which is a much more time-consuming process.
We’ve had numerous endorsements cross our desks that duplicate the required language. When we were reviewing an individual annuity that included the required language right in the contract, we stumbled on this phrase: “To the extent that an annuity contract or certificate accords to spouses other rights or benefits…” (emphasis ours)
We thought it might be confusing to an individual owner to come across the word “certificate” in an annuity that has nothing to do with a group contract. We called Mr. Peter Dumar, an attorney at NYSID, and asked if we could delete the words “or certificate.” Without hesitation, he agreed that these words are irrelevant in this situation. He said we could remove them, and he said he would let others at the Department know that this change would still be considered compliant under the supplement’s guidance.
Thanks Mr. Dumar, you made our day. Sometimes, it’s the little things …
Suzanne Seay, Analyst