2023 New York Laws › ISC - Insurance › Article 32 - Insurance Contracts - Life, Accident and Health, Annuities › 3219 - 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.