Current through Register Vol. 46, No. 39, September 25, 2024
For purposes of this Part:
(a) Consumer means the owner or prospective
purchaser of a policy.
(b) Insurer
means a life insurance company as defined in Insurance Law section 107(a)(28)
or a fraternal benefit society as defined in Insurance Law section
4501(a).
(c) Insurance producer or
producer means an insurance agent or insurance broker.
(d) Policy means a life insurance policy, an
annuity contract, a certificate issued by a fraternal benefit society, or a
certificate issued under a group life insurance policy or group annuity
contract.
(e) Recommendation means
one or more statements or acts by a producer, or by an insurer where no
producer is involved, to a consumer that:
(1)
reasonably may be interpreted by a consumer to be advice and that results in a
consumer entering into or refraining from entering into a transaction in
accordance with that advice; or
(2)
is intended by the producer, or an insurer where no producer is involved, to
result in a consumer entering into or refraining from entering into a
transaction. A recommendation does not include general factual information to
consumers, such as advertisements, marketing materials, general education
information regarding insurance or other financial products and general
administrative services to the consumer. A recommendation also does not include
use of an interactive tool that solely provides a prospective consumer with the
means to estimate insurance, future income, or other financial needs or compare
different types of products or refer the consumer to a producer, provided that
the interactive tool is not used by a producer, or an insurer where no producer
is involved, to satisfy any requirement imposed by this Part.
(f) Replace or replacement means a
transaction subject to Part 51 of this Title (Insurance Regulation 60) and
involving a policy.
(g) Suitability
information means :
(1) For a policy solely
providing term life insurance with no cash value, information that is
reasonably appropriate to determine the suitability of a recommendation
commensurate with the materiality of the transaction to a consumer's financial
situation at the time of the recommendation and the complexity of the
transaction recommended, including some or all of the following, as relevant to
the consumer:
(i) age;
(ii) annual income;
(iii) financial situation and needs,
including the financial resources used for the funding of the policy;
(iv) financial objectives;
(v) intended use of the policy, including any
riders attached thereto;
(vi)
financial time horizon, including the duration of existing liabilities and
obligations;
(vii) existing assets,
including investment and insurance holdings;
(viii) willingness to accept non-guaranteed
elements in the policy, including variability in premium, death benefit, or
fees; and
(ix) any other
information provided by the consumer which in the reasonable judgment of the
producer, or the insurer where no producer is involved, is relevant to the
suitability of the transaction.
(2) For any policy other than a policy solely
providing term life insurance with no cash value, information that is
reasonably appropriate to determine the suitability of a recommendation
commensurate with the materiality of the transaction to a consumer's financial
situation at the time of the recommendation and the complexity of the
transaction recommended, including some or all of the following, as relevant to
the consumer:
(i) age;
(ii) annual income;
(iii) financial situation and needs,
including the financial resources used for the funding of the policy;
(iv) financial experience;
(v) financial objectives;
(vi) intended use of the policy, including
any riders attached thereto;
(vii)
financial time horizon, including the duration of existing liabilities and
obligations;
(viii) existing
assets, including investment and insurance holdings;
(ix) liquidity needs;
(x) liquid net worth;
(xi) risk tolerance;
(xii) willingness to accept non-guaranteed
elements in the policy, including variability in premium, cash value, death
benefit, or fees;
(xiii) tax
status; and
(xiv) any other
information provided by the consumer which in the reasonable judgment of the
producer, or the insurer where no producer is involved, is relevant to the
suitability of the transaction.
(h) Suitable means in furtherance of a
consumer's needs and objectives under the circumstances then prevailing, based
upon the suitability information provided by the consumer and all products,
services, and transactions available to the producer.
(i) Transaction means any sales transaction
or in-force transaction.
(j) Sales
transaction means the purchase or issuance of a policy, any replacement as
defined by section
51.2(a) of Part
51 (Insurance Regulation 60), conversion, or any modification or election of a
contractual provision with respect to an in-force policy that generates new
sales compensation. New sales compensation does not include compensation
provided to a producer when, after the initial premium or deposit under a
policy, the consumer pays further premiums or deposits pursuant to the
policy.
(k) In-force transaction
means any modification or election of a contractual provision with respect to
an in-force policy that does not generate new sales compensation. New sales
compensation does not include compensation provided to a producer when, after
the initial premium or deposit under a policy, the consumer pays further
premiums or deposits pursuant to the policy.
