New York Issues Regulation Aimed at Curtailing Life Insurance Premium Hikes
September 27, 2017

Last week, the New York Department of Financial Services (“NYDFS”) promulgated a new regulation 11 NYCRR 48, aimed at limiting the amount by which life insurance premiums can be raised as to policies issued in the state.  In particular, the regulation allows the NYDFS to review any increase and to ensure that such carriers notify the NYDFS at least 120 days prior to any adverse change in non-guaranteed elements of an active policy.  In addition, annuity carriers must file on an annual basis a notice of any adverse change to annuity policies.

The regulation comes on the heels of a concern by the NYDFS that life companies could be incentivized to raise premiums on active policies, particularly in the current low interest rate environment.  This concern is particularly amplified when active policies are tied to senior citizens who are more likely to produce higher mortality rates.  Raising premiums on active life insurance policies may potentially conflict with existing New York law prohibiting life companies from discriminating among a class of insureds with respect to non-guaranteed elements of a policy.

All life insurers, under the new regulation, must also notify insureds within 60 days prior to any adverse change in non-guaranteed portions of their policies.

The regulation can be viewed in its entirety here.


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