New York

Regulation 210 final and effective March 19, 2018

With an announcement on its website on September 19, 2017, DFS posted the final Regulation 210. The headline of the release is: “DFS Issues Final Regulation to Protect New Yorkers from Unjustified Life Insurance Premium Increases.” From the website:

The final regulation provides DFS the ability to review increases prior to implementation and ensure compliance with law, by requiring life insurers to notify DFS at least 120 days prior to an adverse change in non-guaranteed elements of an in-force life insurance policy. Annuity issuers must now file annually with DFS to inform the Department of any adverse changes to annuity policies made in the prior year. New York Insurance Law prohibits life insurers from changing non-guaranteed elements in a discriminatory way for members of the same class of policyholders. Only certain enumerated factors, which do not include profit, can be considered when seeking to change non-guaranteed elements. 

Watch this space for more discussion of the final regulation and don’t miss the in-depth session we have scheduled at our November 3, 2017 symposium in Hartford, CT. March 19 will be here before we know it so implementation efforts must begin quickly. Make sure you are on the right track in November!


New York Paid Family Leave Update

New York Paid Family Leave Update

I have started to see things creep up in my personal facebook feed about paid family leave. There has been local news coverage this month about the fact that employers can start taking deductions from employee’s wages to cover the premiums. The rate was set by NY Department of Financial Services (DFS) and maxes out at $1.64 per week, which is intended to fully fund the coverage. 

Meanwhile, insurers are still waiting to submit form filings to provide for this coverage. At the LICONY and DFS seminar that was held on July 11, representatives from the Health Bureau stated that they have put ample resources into drafting model language for the program, which they will require to be used. The language is drafted to be a rider that is added to an existing Disability Benefits Law (DBL) policy. The language has also been pre-approved by the Worker’s Compensation Board, which means insurers will only need to submit filings to DFS. At the time of publication, the model language has still not been released, but it was promised to be available soon. Department staff also promised that there will be a checklist that includes detailed filing instructions to aid in these submissions. Given the circumstances, I am hopeful that there will be a very quick turnaround on these filings. 

I am most interested to find out what happens January 1, 2019 after the first year of the program is complete. The rate regulation requires detailed reporting from all insurers and a complete levelling of all experience, categorized by group size. Will it be a loss? Are the premiums adequate?

Insurance Filings Modernization Initiative 4/21 Interim Report Posted

The New York State Insurance Department posted an [interim report] of the Insurance Filings Modernization Initiative on April 21. The specific recommendations this report discusses that are particularly relevant to life insurers are: the updated [product outlines]; the use of SERFF for post-approval reviews; significant contact with the industry (See our for information on the upcoming Life and Health Compliance Association meeting at which representatives of both the Life Bureau and Health Bureaus will be speaking); and the use of sanctions against companies that do not use the certified process appropriately.

This last item is one that virtually all companies that use the certified process fear. However, it was one of the recommendations of the Life Committee, because the only way to keep the process working well is to make sure that the requirements for certified filings are clear and then to enforce those requirements consistently. One of the constant tensions with the process is that companies want two things that are naturally in conflict with one another. Fast approvals and assistance with their own filings when there are deficiencies rather than having the filing closed. Clearly, the more time spent providing assistance, the less time there is for processing approvals.

Updated guidance on standards and mandates is essential for giving companies the information necessary to make high quality filings. The report references updates to the outlines that are in progress and those are clearly needed for companies to use the certified process confidently. My personal opinion on the usefulness of the outlines, is that prompt updates to reflect current Department positions is more important for users of the certified process than is a full debate over the positions themselves. Personally, I would like to see the outlines posted quickly and updated often, followed by a different process - a post-posting process - to discuss and debate the merits of any controversial positions taken in them.

As indicated above, this interim report reminds us that one conclusion of the Life Committee was that when companies have a pattern of using the certified process inappropriately. they should be precluded from using it. This interim report states: “the Department temporarily suspended an insurer from using an expedited filing process because the insurer used the expedited process to submit a filing despite a directive not to do so.”

I expect there will be more such suspensions in the future.

NY Spending and Government Efficiency (SAGE) Commission Named

On April 19, 2011, Governor Cuomo issued a [press release] naming members of the SAGE Commission. The press release states that “SAGE is the first major redesign of state government since Governor Alfred E. Smith in 1927.” This commission is charged with conducting “a comprehensive review of state government including its structures, operations and processes, with the ultimate goal of saving taxpayers’ money, increasing accountability and improving the delivery of government services.”

While final recommendations are not due until June 1, 2012, the release indicates that progress reports will be delivered on an ongoing basis and that “the state has already begun the process of consolidating a number of state agencies including … Merging Banking and Insurance Departments to create the new Department of Financial Regulation.” Jim Corcoran, Superintendent of Insurance from 1983 to 1990 is a member of the SAGE commission. He appears to be the sole member of the commission that has a background in insurance.

Gov. Cuomo Proposes Department of Financial Regulation

Governor Cuomo said in his State of the State that many people asked where the SEC was and where other federal regulators were when the financial meltdown occurred. But he said the question should also be asked where was the NY Banking Department and where was the Insurance Department. He indicated that the division that exists in our state regulatory agencies is not consistent with how business is done anymore. To be an effective regulator, he proposes a Department of Financial Regulation.