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New York Imposes New Filing Requirements for Submission of Universal Life Policies with Secondary Guarantees

March 18, 2013

The New York Department of Financial Services (Department) recently revised New York Insurance Regulation 147 by adopting the revisions to Actuarial Guideline 38, which were outlined in our October 2012 Alert, NAIC Adopts Revisions to Actuarial Guideline 38.

These revisions require insurers to provide two certifications to the Department in any submission of a universal life insurance policy form having secondary guarantees. On March 8, 2013, the Department issued a Notice announcing the new filing procedures to be implemented by insurers submitting these types of forms for approval.

Summary of the New Procedures

  • All universal life policy form filings must indicate whether the form has a secondary guarantee.
  • If the form has a secondary guarantee, the policy design methodology must be identified.
  • All certifications required based on policy design methodology must be included in the filing.

New form submissions that do not comply with requirements found in the Notice will be considered incomplete and may be rejected by the Department.

Important: Certifications must also be submitted as to previously approved universal life insurance policies with secondary guarantees if these policy forms are to be used after December 31, 2012.

Wilson Elser has written a number of articles regarding the various regulatory issues surrounding Actuarial Guideline 38 and other matters involving reserve requirements for these types of life insurance policies, including the Client Alert referenced above as well as New York Department of Financial Services Investigates Life Insurance Industry’s Use of Captive Reinsurers.

Wilson Elser will continue to monitor the regulatory developments surrounding this issue.

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