Thanks to efforts driven by NAIFA-NYS, needed changes to New York State Insurance Regulation 60, which pertains to the replacement of life insurance policies and annuity contracts, were adopted by the Department of Financial Services on January 21, 2015, take effect Tuesday, April 21, 2015. The regulation, known in the insurance industry as “Reg. 60,” was implemented in 1998, and required a comparison of products before a sale could be transacted. “Amendment 3 to Regulation 60,” which resulted from NAIFA – NYS’s efforts, was posted by the DFS to the New York State Register for public comment and final review on November 5, 2014.
On January 6, 2014, Michael Maffei, DFS Assistant Deputy Superintendent and Chief of the Life Bureau notified NAIFA-NYS President Larry Holzberg that notice of adoption of the revised Reg. 60 would be published in the January 21st, 2015 issue of the New York State Register, with the amendment taking effect 90 days later – April 21, 2015.
The Association has long been on record in supporting the principles of Reg. 60, the main goals of which are transparency and an informed consumer. In practice; however, Reg. 60 resulted in lengthy, unnecessary and unproductive delays in the timely completion of the transaction. It had the unintended consequences of being harmful to consumers’ best insurance and financial security interests.
Earlier last year, NAIFA – NYS asked the New York State Department of Financial Services (DFS) to revise Reg. 60 to expedite the commencement of underwriting and allow an insurance producer to bind coverage (i.e., conditional receipt) even when a replacement is involved, while still maintaining the Disclosure Statement requirement.
The important new amendment accomplishes these goals and protects the consumer’s ability to complete a desired transaction in a timely fashion while still being protected from inappropriate and/or misleading sales. Congratulations to President Holzberg and Immediate Past President Robert Gruber for the key role they played in negotiations with the DFS. NAIFA NYS believes this amendment will bring positive and necessary changes pertaining to replacement contracts which, in turn will allow you, the NAIFA member, to better serve your clients’ interests safely and securely.