New York Life Insurance Compliance Lawyer & Attorney : Currin Law Office : Annuity Compliance & Insurance Regulation

On August 20, 2007, the NYSID posted 13 new OGC opinions.  Included in these was a new Reg 60 opinion.  Two questions were presented and the Department's position on the first was not really a surprise to me, but their position on the second could lead to some difficult decisions in the future.  The question was:  "If an annuitant surrenders or otherwise terminates an individual annuity contract before its maturity date, and at a later time purchases a new individual life insurance policy, which is delivered or issued for delivery in New York State by an authorized insurer, is there a replacement as defined by section 51.2(a)(1) of Regulation 60?"   The response was "It depends on the facts.  If the producer and the annuitant had a plan that an a new individual life insurance policy would be purchased from the same producer at a later time after the annuity contract was surrendered or otherwise terminated, then there is a replacement within the meaning of section 51.2(a)(1) of Regulation 60."  www.ins.state.ny.us/ogco2007/rg070712.htm,

• Email This
• Print
• Comments
• Trackbacks

The NYSID has recently posted a new set of reports on exam on their website.  www.ins.state.ny.us/exam_rpt/examfile.htm#nw.  A cursory review indicates that Reg 60 compliance poses a problem for a significant number of companies.  While the new administration at the NYSID has indicated that they are looking at Reg 60, these exams show that can't happen soon enough!   I don't know of any company that takes compliance with Reg 60 lightly, but as the exams indicate, the pitfalls are many.   As discussions proceed on revisions to the Regulation, companies are well-advised to review their Reg 60 procedures and make sure that every effort is made to comply with the reg as it currently reads - challenging as that may be! 

• Email This
• Print
• Comments
• Trackbacks

In a recently released OGC opinion (www.ins.state.ny.us/ogco2007/rg070613.htm)  the NYSID opined that Reg 60 paperwork is not required when the assets of a fixed-annuity IRA are rolled over into a non-insurance IRA. 

While that is an important clarification of Reg 60, perhaps even more helpful is the statement in the Analysis section:  Reg 60 "only applies to insurance-to-insurance replacement transactions."   Because of the Reg's emphasis on the new policy being delivered, I have had several companies ask about the situation where a non-insurance IRA product was being replaced with an IRA annuity.  While it has been my opinion that Reg 60 would not apply in that situation, this OGC opinion makes clear that the Department agrees.  Because the first product was not an insurance product, the transaction is not an insurance-to-insurance transaction and Reg. 60 does not apply. 

• Email This
• Print
• Comments
• Trackbacks