Grace Period Circular Letter Posted
Those of you who have spoken with me over the last several months about a variable life insurance policy, know that there is a confusing interplay between Regulation 77 and Section 3211 of the Insurance Law. Because of the different periods of time and different terminology found in these two provisions of law, a Company could find themselves either having to send two grace period notices or being unable to lawfully terminate a policy upon default. The NYSID has now posted a Circular Letter to address this situation.
The Circular Letter (CL7 (2008)) makes more clear how the policy provision can be drafted so that one notice contains all the necessary information and so that it is sent at a point in time that will satisfy both the variable life regulation and the general notice of premium due section of the Insurance Law.
I myself found it helpful to put this in a format that is more visual: a notice time line. I would be happy, upon request, to provide the document that I created for this purpose. Before starting to use it I asked Ms. Ryan, the author of this circular letter, to take a look at it and see if she was in agreement that it was correct. She was gracious enough to do so - and to advise that it was accurate. So please let me know if you would like a copy for your use.
