States

New York

• New York – <WishList>
• dfs.ny.gov/consumers/life_insurance
• dfs.ny.gov/Consumer Alert – Universal Life
• wikipedia.org/wiki/New_York_State_Insurance_Department

• Mark J. Greene, FSA. MAAA, Supervising Actuary, New York State Insurance Department
  • What I noticed was there is a requirement for in-force illustrations, and people may have thought they bought one thing and whenever you have to give them an in-force illustration with a current disciplined scale, they’re going to realize they bought something else.
  • I think many companies will have serious problems with policyholder retention.

1995 – SOA – Practical Illustrations and Nonforfeiture Values, Society of Actuaries – 14p

• New York reports that they have determined that Section 216 and 208, (a) and (b), and perhaps other sections of their law, prohibit the issuance of universal life type products.
• Their law is currently being amended to permit such policies.

1982-2, NAIC Proceedings

• The New York Department of financial services recently issued a Consumer Alert on Universal Life Insurance. (See copy attached.) – (p83-85) or dfs.ny.gov/consumers/alerts/universal_life_insurance
• The Consumer Alert explains universal life insurance products and alerts consumers that their premium amounts may increase.

2019 0328 – CEFLI – CEFLI Compliance & Ethics Committee Meeting – 87p

• Congress
• Gary Ackerman (D-NY)
  • 1983-2013 – US House
• Carolyn Maloney (D-NY)
  • 1993-2023 – US House
• Chauncey Depew (R-NY)
  • 1899-1911 – US Senator
  • 1906 0312 – San Francisco Call – Senator Depew in Sanitarium – [link]

    • It was hinted tonight that the Senator’s Breakdown, said to be the first in his life, was caused by the widespread adverse criticism directed against him, following the exposure of the insurance scandal.

    • The effect of the insurance disclosures on President Alexander of the Equitable and President McCall of the New York Life, both of whom suffered mental breakdown, caused the friends of Senator Depew to tear that he had become the victim of a similar affliction.

• Sue Kelly (R-NY)
  • 1995-2007 – US House
  • 2001 0516 – GOV (House) – NARAB And Beyond, Richard Baker (R-LA) – [PDF-79p, VIDEO-?] – Sue Kelly (R-NY) Letter – 3p
    • George W. Miller quote -1871 NAIC Founding
• John LaFalce (D-NY)
  • 1975-2003 – US House
    • 1987-1995 – Chairman of the House Small Business Committee
    • 1999-2003 – Ranking Democrat on the House Financial Services Committee 
• Charles Rangel (D-NY)
  • 1971-2017 – US House
    • 1991 0522 – GOV (House) – Certain Issues Related to the Conservatorship of the Executive Life Insurance Company, (CSPAN) Executive Life Insurance Failure, Charles B. Rangel (D-NY)  —  [BonkNote]
• Chuck Schumer (D-NY)
  • 1999-Current (as of 2023) – US Senator
  • IndyMac
• Edolphus Towns (D-NY)
  • 1983-2013 – US House
    • 2009-2011 – Chairman of the House Oversight and Government Reform Committee 

• Insurance Commissioners
• dfs.ny.gov/reports_and_publications/annual_reports/annual_reports_archive
• George W. Miller:  ?-1871-?
  • 1872 – New York State – GOV – Report and Testimony of the Committee on Insurance on Resolution of the Assembly, to Investigate Into the Conduct of George W. Miller, Superintendent of the Insurance Department, Relative to His Receiving Fees and Perquisites for His Use and Emolument, Etc – [PDF-143p-GooglePlay]
• Robert Dineen: 1943-1950
  • Robert Dineen Award
  • 1958 – NAIC – Insurance Regulation in the Public Interest “A BETTER N.A.I.C.” – by Robert E. Dineen – 122p
• James P. Corcoran:  3/9/1983 1/26/1990 
• Salvatore R. Curiale: 7/1/1990 12/31/1994
• Edward J. Muhl – 1995 0214 -1996 1229
• Neil Levin – 1997-2001 
• Gregory V. Serio: 4/5/2001-1/17/2005
• Eric R. Dinallo: 1/29/2007 7/3/2009
• Benjamin M. Lawsky: 10/3/2011 – 6/1/2015
  • 2014 – NYSID – Regulating In An Evolving Financial Landscape, by Ben Lawsky – 21p-<Bad Link> 
  • 2013 06 – NYSID – Shining a Light on Shadow Insurance: A Little-known Loophole That Puts Insurance Policyholders and Taxpayers at Greater Risk, by Ben Lawsky – 24p
• Linda Lacewell:
  • 2019 0221 – New York – Department of Financial Services – Consumer Alert – Acting DFS Superintendent Lacewell Issues Consumer Alert Regarding Universal Life Policies: DFS Urges New Yorkers to Carefully Review Their Policies and All Information Provided by Their Insurer – [link]
    • 2019 0222 – ThinkAdvisor – New York Financial Superintendent Lacewell Warns of Hidden Costs in Universal Life Policies, By Elizabeth Festa – [link]
• Anthony J. Albanese:  6/1/2015 11/30/2015
  • 2010 0629 – LC – Transatlantic vs AIG – Affirmation of Anthony J. Albanese – 116p
    • 78. AIG Investments senior executive and then-AIG Chief Investment Officer Win Neuger was instrumental in the decision.
    • As reported by the Wall Street Journal on February 5, 2009, “Mr. Neuger and Kevin McGinn, who has been AIG’s chief credit officer since 2004, signed off on the proposal, agreeing in a memo that the guidelines didn’t subject the [Program] portfolio to undue risk.”

• Terrance Lennon
  • Terry Lennon, executive vice president, Metropolitan Life Insurance Company, who launched MetLife’s mergers and acquisition (M&A) department in 1994.
    • 1999 – SOA – ‘Biggest by a mile’ Megamergers’ 1998 peaks signal trends for actuaries (p1), act9902 – Society of Actuaries – 15p

• New York Insurance Regulation 210
• … went into effect in New York on March 19, 2018.
• … establishes standards for the determination and any readjustment of non-guaranteed elements (“NGEs”) that may vary at the insurer’s discretion for life insurance policies and annuity contracts delivered or issued for delivery in New York.
  • Examples of NGEs include cost of insurance for universal life insurance policies, as well as interest crediting rates for annuities and universal life insurance policies.
• The regulation requires insurers to notify policyholders at least 60 days in advance of any change in NGEs that is adverse to policyholders and, with respect to life insurance, to notify the NYDFS at least 120 days prior to any such changes.
• Additionally, the regulation requires insurers to file annually with NYDFS to inform the NYDFS of any changes adverse to policyholders made in the prior year.
• The regulation generally prohibits insurers from increasing profit margins for in-force policies or adjusting NGEs in order to recoup past losses.

2018 1231 – Metropolitan Life Insurance Company, Form 10-K, For the fiscal year ended December 31, 2018 – sec.gov/Archives/edgar/data/937834/000093783419000006/mlic-12312018x10k.htm

• Life insurance is especially an outgrowth of public confidence in the good management and integrity of officers and directors, and anything which shocks this faith on the part of policy-holders is vastly detrimental to the interests of a company.

1872 – New York State – GOV – Report and Testimony of the Committee on Insurance on Resolution of the Assembly, to Investigate Into the Conduct of George W. Miller, Superintendent of the Insurance Department, Relative to His Receiving Fees and Perquisites for His Use and Emolument, Etc – [GooglePlay-link]

• Chapter 1, Life Insurance and the Question of Solvency Salvatore R. Curiale, Superintendent of Insurance, New York State Insurance Department
• I am not sure there are any serious issues confronting the life insurance industry these days, unless of course you consider solvency, liquidity, junk bonds, deteriorating mortgage and real estate portfolios, risk-based capital requirements, asset mix, separate accounts, credit risk, Congressional inquiries, shrinking surplus, demutualization and more.
• ⇒  What happened?
• ⇒  How did a boring, straight-forward business become so interesting and so difficult to regulate?
• During the past decade the life insurance industry has undergone dramatic changes.
  • A business that was  previously characterized by stable risks and generous profits has been transformed into one marked by instability of risk and evaporating profit margins.
• The change was precipitated by the dramatic rise in interest rates in the late 1970s and early 1980s.
  • The relatively high rates offered by money market funds, Certificates of Deposit and other similar products prompted insurers to develop insurance alternatives that shifted the marketing emphasis from security to, at least partially, rate of return.

• 2000 0616 – NYSID – Letter from Rochelle Katz, Associate Att’y, State of N.Y. Ins. Dep’t, to Bertil Lundqvist, Att’y, Skadden, Arps, Slate, Meagher & Flom, LLP (June 16, 2000) (on file with the N.Y. Dept. of Ins. Gen. Counsel). / NYSID Letter to Starr International Inc.  Regarding Credit Default Option Facility – 2p
  • 2015 – LR – Systemic Risk Oversight and the Shifting Balance of State and Federal Authority over Insurance, by Patricia A. McCoy – 56p-ssrn.com-link 
  • 2008 0922 – NYSID – RE: “Best practices” for financial guaranty insurers.
    • Although OGC’s June 16, 2000 opinion suggests that a CDS is not an insurance contract if the payment by the protection buyer is not conditioned upon an actual pecuniary loss, that opinion did not grapple with whether, under Insurance Law § 1101, a CDS is an insurance contract when it is purchased by a party who, at the time at which the agreement is entered into, holds, or reasonably expects to hold, a “material interest” in the referenced obligation. 
    • That omission will be rectified and addressed in a forthcoming opinion to be prepared by OGC.
    • 2008 0922 – NYSID – Circular Letter No. 19, TO: All authorized financial guaranty insurers, RE: “Best practices” for financial guaranty insurers
      • III. REGULATION OF FINANCIAL GUARANTY INSURERS
        • The regulation of FGIs in New York is principally governed by Article 69 of the Insurance Law, which applies exclusively to FGIs. Article 69 sets forth a series of specialized and highly technical requirements intended to safeguard the financial solvency of FGIs authorized to do business in this State.
        • These include:

• 2008 0916 – Reuters – In November 2008, Treasury used funding from the Troubled Asset Relief Program (TARP) to inject $40 billion into AIG. – [link]

• Deputy Commissioner said New York would vote “No” on this guideline.
  • We acknowledge this is a small step in the right direction but feel it falls short of the standard we should impose to ensure consumers are protected.
  • We believe this proposal continues to allow the use of unrealistic and unreasonable crediting rates.
  • Illustrations are supposed to show consumers how an insurance product works and is expected to perform in the future.
  • We know insurers have used these illustrations to compete with each other and to sell equity indexed life insurance products by using unrealistic growth cash values.
  • This misleads consumers.
  • This causes consumers harm.
  • We feel it is critically important for the NAIC to advocate for more realistic and reasonable credit rates and we don’t believe this proposal achieves that.” (3-6)

2020 Summer – NAIC Proceedings

• Sometimes it is the same with insurance departments.
  • If you like the idea, go ahead and do it.
  • I think that is what the New York State Insurance Department (the Department) did with Regulation 126, and I think that that is what the Department is doing with Regulation 130 regarding investments in high-yield, high-risk obligations by domestic life insurance companies. [Junk Bonds]

—  Robert J. Callahan, Fellow of the Society and has been with the New York State Insurance Department for over 35 years.

1987 – SOA – Quantifying The C-1 Risk (Defaults in Fixed Dollar Investments and Market Value Changes in Equity Investments), rsa87v13n320 –  Society of Actuaries – 32p

• (p1177) – By Mr. MCGUIRE:
  • A. I have parted with two or three life insurance policies.
  • Q. Sell them for the amount of the loan, or at a discount?
  • A. at the price the insurance company would pay for them.
  • By Mr. TRACY : Q. That is what is called “surrendered value?”
    • A. Yes, sir.

1877 0723 – New York Senate – Testimony Taken Before the Senate Committee on Charges Against De Witt O. Ellis, Superintendent of the Banking Department – [PDF-1557p-GooglePlay]

• 1983 – Temporary State Commission on Banking, Insurance and Financial Services <Cuomo / Deregulation/ Dewind Commission Report/Orin Kramer>
  • Public papers of Governor Mario M. Cuomo, 1983 – New York
• 1998 0325 – The Feeling’s Not Mutual: An Analysis of Governor Pataki’s Proposed Mutual Holding Company Legislation. Report by the Assembly Standing Committee on Insurance – assembly.state.ny.us/Reports/Ins/199803/
• 2002 – Public hearing, investing in New York the role of insurance company capital in New York communities by New York (State). Legislature. Assembly….  149p-nysl.ptfs.com/#!/s?a=c&q=*&type=16&criteria=field11%3D50156174&b=0
• 2004 – What Ever Happened To The New York Insurance Exchange (And Why Do We Care)?, by Peter H. Bickford – 29p
• 2008 1010 – Circular Letter No. 22 – [link] – <Bad Link>
  • Misrepresentations or misleading statements regarding AIG insurance company subsidiaries in New York-or other insurers- aimed at causing fear or undue concern amongst insurance consumers will compel the Department to take appropriate disciplinary or other regulatory action against any person violating the Insurance Law and regulations thereunder.
• 2022 1005 – NYDFS – Special Considerations Relating to December 31, 2022 Reserves and Other Solvency Issues – 18p – <Bad Link>

• Armand M. de Palo: This is more of just a comment than a question.
  • As many of you know, New York State does intend to adopt regulations quite like the Model law.
  • In New York State, Regulation 74 governs illustrations.

1996 – SOA – Update on Life Insurance Illustrations, Society of Actuaries – 24p

• “LAWS OF THE STATE OF NEW YORK”
• Merritt Committee Report – Joint Legislative Committee in New York 
• New York Liquidation Bureau – nylb.org/
• OCC – Report of the State of New York Banking Department Superintendent’s Advisory Committee on Transnational Banking Institutions**— Summary of Recommendations, by John Heinmann

• dfs.ny.gov/industry_guidance/ins_regs_by_part_number
• 2604 –  CHAPTER 28, ARTICLE 26, Section 2694 – False statements as to insurers, New York Consolidated Laws, Insurance Law – [link]
  • § 2604. False statements as to insurers.
  • No person shall either
    • (i) wilfully make, circulate or transmit to another any statement written, printed or by word of mouth, which is untrue in fact and is directly or by inference derogatory to the financial condition, or affects the solvency or financial standing, of any insurer doing business in this state, or
    • (ii) knowingly counsel, aid, procure or induce another to start, transmit or circulate any such statement.
• New York Liquidation Bureau – [link]
• Regulations
  • Regulation  60 – Sales Illustrations
    • dfs.ny.gov/apps_and_licensing/life_insurers/reg60
    • N.Y. Comp. R. & Regs., tit. 11, §51 et seq.
  • Regulation 74 –
    • dfs.ny.gov/apps_and_licensing/life_insurers/guidance_life_insurance_policy_illustrations
  • Regulation 126
    • 1988 – SOA -New York Regulation 126 Revisited, Society of Actuaries – 14p
  • Regulation 187 –  Suitability in Life Insurance and Annuity Transactions
    • 11 NYCRR 224
• Universal Life
  • Withdrawn Circular Letters
    • 1980-18 – 12/19/80 –
      • Guidelines for submission and approval of life insurance policies with projected indeterminate or adjustable premium rates less than or equal to maximum guaranteed premium rates. – [link]
    • 1983-4 – 3/16/83 – Guidelines for submission and approval of “Universal Life” and other life policies  subject to Sections 4232(b) or 4518 of the Insurance Law <1983 #4 – off website> – [link]
    • 1983 #8 – <Not on Website.  I have.>

Phoenix Mut. Life Ins. Co. v. INSURANCE DEPT., ETC., 500 F. Supp. 2 (S.D.N.Y. 1980)

• Shopping Guide
• Adjusted Indexes
• Virginia Knauer
• Low-Cost

• OGC Op. No. 07-08-11 – RE: Individual Life Insurance, Sales Illustrations and Insurer Restrictions on Agents – [link]
• The Office of General Counsel issued the following opinion on August 29, 2007 representing the position of the New York State Insurance Department.
  • Questions Presented:
    • 1. Do the illustrations currently used by life insurers adequately inform prospective insureds of the cost of individual insurance policies?
  • Conclusions:
    • 1. Yes, in the Insurance Department’s estimation, the illustrations as required by N. Y. Ins. Law § 3209 (McKinney 2006) and detailed in N.Y. Comp. Codes R. & Regs. tit. 11, Sub-Parts 53-2 & 53-3 (Regulation 74) adequately inform prospective insureds of the comparative cost of various individual life insurance policies.

• OGC Op. No. 06-05-10 – Re: Policy or contract and company comparisons in sale and replacement of life insurance and annuities – [link]
• The Office of General Counsel issued the following opinion on May 30, 2006, representing the position of the New York State Insurance Department.
• Question Presented:
  • What New York laws and regulations apply to policy or contract and company comparisons in the sale and replacement of life insurance policies and annuity contracts?

• NEW YORK-Appointed, at the Pleasure of the Governor
  • Acting Superintendent of Fin. Srvs. Linda A. Lacewell 2/4/2019 incumbent
  • Superintendent of Financial Services Maria T. Vullo 6/15/2016 2/1/2019 2 8
  • Acting Superintendent of Insurance Maria T. Vullo 2/23/2016 6/15/2016 0 4
  • Acting Superintendent of Insurance Shirin Emami 12/1/2015 2/1/2016 0 2
  • Acting Superintendent of Insurance Anthony Albanese 6/1/2015 11/30/2015 0 5
  • Superintendent of Financial Services Benjamin M. Lawsky 10/3/2011 6/1/2015 3 8
  • Superintendent of Insurance James J. Wrynn 9/11/2009 10/3/2011 2 1
  • Acting Superintendent of Insurance James J. Wrynn 8/20/2009 9/11/2009 0 1
  • Acting Superintendent of Insurance Kermitt J. Brooks 7/4/2009 8/18/2009 0 1
  • Superintendent of Insurance Eric R. Dinallo 1/29/2007 7/3/2009 2 6
  • Acting Superintendent of Insurance Louis W. Pietroluongo 1/1/2007 1/28/2007 0 1
  • Superintendent of Insurance Howard D. Mills III 5/18/2005 12/31/2006 1 7
  • Superintendent of Insurance No Record in Proceedings 1/18/2005 5/17/2005 0 4
  • Superintendent of Insurance Gregory V. Serio 5/9/2001 1/17/2005 3 9
  • Acting Superintendent of Insurance Gregory V. Serio 4/5/2001 5/9/2001 0 1
  • Superintendent of Insurance Neil D. Levin 4/7/1997 4/5/2001 4 0
  • Superintendent of Insurance No Record in Proceedings 1/1/1997 4/6/1997 0 3
  • Superintendent of Insurance Edward J. Muhl 2/14/1995 12/29/1996 1 10
  • Superintendent of Insurance Salvatore R. Curiale 7/1/1990 12/31/1994 4 5
  • Acting Superintendent of Insurance Wendy Cooper 1/27/1990 7/1/1990 0 6
  • Superintendent of Insurance James P. Corcoran 3/9/1983 1/26/1990 6 10
  • Superintendent of Insurance Albert B. Lewis 1/5/1978 3/7/1983 5 2

timesmachine.nytimes.com/timesmachine/1945/11/15/issue.html

• 1878 – GOV (New York) – Testimony Taken Before the Senate Committee on Banks and the …, Volume 3, By De Witt C. Ellis, New York (State) Legislative Committee on Banks – [PDF-681p-GooglePlay]
  • (p1757-1758) – In the State of Massachusetts, three years ago, there was a life insurance company.
    • It was being attacked; wreckers were after it.
  • The confidence of the people in it was being undermined; and it looked as though the company was bound to go into the bands of a receiver.
  • What does the Superintendent of the Insurance Department do there? Go down and examine it and on finding a deficiency of assets, pass it over into the hands of a receiver to be crushed?
  • On the other hand, looking over the broad field, he takes the insurance company under his hand, nurses it, carries it along; and today it stands as one of the most prominent institutions of the kind in the State of Massachusetts, saved, and the policyholders saved, and the insurance interest of the State saved by just that kind of policy.
  • And two weeks ago in the State of Connecticut, what occured relative to another insurance company?
    • On examination it was found there was a deficiency of assets from $1,000,000 to $4,000,000, and yet what does the department of that State, in conjunction with the Supreme Court, do in the matter of the supervision of that company?
      • Does it pass it over into the hands of a receiver? If it had been done, the policyholders would not have received twenty-five cents on the dollar.
        • Not at all; but the broad, liberal, charitable view was taken.
      • The State department of Connecticut, in conjunction with the Supreme Court, put new men in charge of it, and the company promises to go on to success.
    • It certainly will unless outside influences are brought to bear against it to undermine and crush it.
  • (p1793) – Take the case, as a further illustration, of insurance companies.
    • There have been failures of small insurance companies within the past few years, and the confidence of the public has been badly shattered in connection with them.
    • Suppose, a few years ago, the larger insurance companies, realizing the rocks that were lying ahead, had joined together, and taken up these smaller ones and gone on, the confidence of the public would have remained in the insurance interest, policyholders would have been protected, and the policyholders in these larger companies would have been uninjured, how much better would it have been for the insurance interest?