2006 New York Code - Annuity And Pure Endowment Contracts And Certain Group Annuity Certificates; Standard Provisions As To Contractual Rights And Responsibilities Of Cont

 
    § 3219. Annuity and pure endowment contracts and certain group annuity
  certificates;   standard   provisions   as  to  contractual  rights  and
  responsibilities of contract holders, certificate holders and  insurers.
  (a)  Except  as  provided  in section four thousand two hundred forty of
  this chapter, every annuity or pure endowment contract  except  a  group
  annuity  contract,  and every group annuity certificate to which section
  four thousand two hundred twenty-three of this chapter applies by reason
  of subsection (b) thereof, or to which section four thousand two hundred
  twenty-three of this chapter would apply if such certificate were not  a
  variable  annuity, delivered or issued for delivery in this state, shall
  contain in substance the following provisions, or provisions  which  the
  superintendent  deems  to  be  more  favorable  to  the  holders of such
  contracts or certificates:
    (1) In any such contract or certificate requiring payments to be  made
  to  the  insurer,  that, after the first payment, there shall be a grace
  period of thirty-one days following  the  due  date  of  any  subsequent
  payment  within  which  the  payment to the insurer may be made.  During
  such grace period, the contract or certificate shall  continue  in  full
  force. If a claim arises under the contract or certificate on account of
  death  during  the  grace  period, the insurer may deduct from the death
  benefit, or, in the case of a reversionary annuity, otherwise  called  a
  survivorship  annuity,  may,  at  its option, reduce annuity payments to
  take into account the portion of any unpaid payment  applicable  to  the
  period  ending  with  the  last  day  of  the  month in which such death
  occurred;
    (2) That, with respect to any statements, other than those relating to
  age, sex, and identity, required as a condition of issuing the  contract
  or certificate, the contract or certificate shall be incontestable after
  it has been in force during the lifetime of the person or of each of the
  persons  as  to  whom  such statements are required, for a period of two
  years from its date of issue, except  where  payments  required  by  the
  contract  or  certificate  to be made to the insurer have not been made,
  and except for violation of the conditions, if any, of the  contract  or
  certificate  relating  to service in the armed forces; and at the option
  of the insurer, such contract or certificate may also except  provisions
  relating to benefits for total and permanent disability and benefits for
  accidental death;
    (3)  That  the  contract,  together with the application therefor if a
  copy of such application is attached to the contract when issued,  shall
  constitute the entire contract between the parties;
    (4)  That nothing in the group annuity contract invalidates or impairs
  any right granted to the certificate  holder  by  this  section  or  the
  certificate;
    (5) That if the age or sex of the person or persons upon whose life or
  lives  the  contract  or  certificate is made or of any of them has been
  misstated, the amount payable or benefit accruing under the contract  or
  certificate  shall  be  such  as  the payments to the insurer would have
  purchased according to the correct age or sex; and that if  the  insurer
  makes   any   underpayment   or  overpayment  on  account  of  any  such
  misstatement, the  amount  thereof,  with  interest  at  a  rate  to  be
  specified  in  the  contract  or  certificate  but not exceeding six per
  centum per annum, shall be credited to, or charged against, the  current
  or  next  succeeding payment or payments to be made by the insurer under
  the contract or certificate;
    (6) That the  insurer  shall  annually  ascertain  and  apportion  any
  divisible surplus accruing on the contract;
    (7)  Specifying  the  options  available  upon cessation of payment of
  considerations under a contract or certificate. Such options, except for
  those under a reversionary annuity or pure endowment contract, shall  be
  in  accordance  with  section  four thousand two hundred twenty-three of
  this chapter;
    (8)  In any such contract or certificate requiring payments to be made
  to the insurer that at any time within three  years  from  the  date  of
  default  in  making  payments  to  the insurer unless the cash surrender
  value has been paid, the contract or certificate shall be reinstated  if
  the  person  entitled thereto pursuant to the provisions of the contract
  or certificate
    (A) applies to the insurer therefor,
    (B) pays to the insurer all overdue payments and all  indebtedness  on
  the  contract or certificate with interest on such overdue payments at a
  rate specified in the contract or certificate but not to exceed six  per
  cent   per   annum,  compounded  annually,  and  interest  on  any  such
  indebtedness at a rate or rates not exceeding the applicable  loan  rate
  or  rates  determined in accordance with the contract's or certificate's
  provisions, and
    (C) where required by the insurer as  a  condition  of  reinstatement,
  provides  evidence  of  insurability  including  good  health reasonably
  satisfactory to the insurer;
    (9) That upon surrender of the contract or certificate, together  with
  a  written  request  for cancellation, to the insurer during a period of
  not less than ten days nor more than  thirty  days  from  the  date  the
  contract or certificate was delivered to the holder thereof, the insurer
  refund   either   (i)   any  consideration  paid  for  the  contract  or
  certificate, including any fees or other charges or, if the contract  or
  certificate,  or  notice attached thereto, so provides, and the contract
  or certificate is subject to the provisions of section four thousand two
  hundred twenty-three of this chapter and provides for the  determination
  of  any  cash  surrender  benefits  in  accordance  with  a market-value
  adjustment formula, (ii) the  amount  of  the  cash  surrender  benefits
  provided  under  the contract or certificate plus the amount of all fees
  and other charges deducted from gross considerations  or  imposed  under
  the contract or certificate. This provision shall appear in the contract
  or  certificate  or  in a notice attached to it; provided, however, that
  the contract or certificate sold by mail order must contain a  provision
  permitting  the  contract  or certificate holder a thirty day period for
  such surrender.
    (b) Any of the provisions of subsection (a)  hereof  or  portions  not
  applicable   to  non-participating  contracts  or  certificates  or  not
  applicable to contracts or certificates for which a  single  payment  to
  the  insurer  is made shall, to that extent, not be incorporated in such
  contract or certificate. Paragraphs one and eight of subsection  (a)  of
  this  section  shall  not apply to contracts or certificates that do not
  require payments to be made to the insurer. An  insurer  shall  issue  a
  certificate  for  delivery  to  a  person  covered under a group annuity
  contract  if  such  certificate,  when  issued,  would  be  subject   to
  subsection (a) of this section.
    (c) Annuity contracts subject to this section may permit an adjustable
  maximum  rate of interest on loans. Any such contract shall provide that
  loans shall bear interest at a rate  not  in  excess  of  an  adjustable
  maximum  interest  rate  established from time to time by the insurer as
  permitted by law, and shall specify the regular intervals at  which  the
  interest  rate  is  to  be determined which shall be at least once every
  twelve months, but not more frequently than  once  in  any  three  month
  period.
    (d)  This  section shall not apply to contracts for deferred annuities
  or reversionary annuities upon the lives  of  beneficiaries  under  life
  insurance policies, nor, except to the extent expressly provided herein,
  to group annuity contracts.