Bill Text: NY S00820 | 2019-2020 | General Assembly | Introduced
Bill Title: Relates to preneed insurance premiums.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO CONSUMER PROTECTION [S00820 Detail]
Download: New_York-2019-S00820-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 820 2019-2020 Regular Sessions IN SENATE January 9, 2019 ___________ Introduced by Sen. LANZA -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection AN ACT to amend the general business law, the insurance law and the public health law, in relation to preneed insurance; and providing for the repeal of such provisions upon expiration thereof The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph (a) of subdivision 1 of section 453 of the gener- 2 al business law, as amended by chapter 557 of the laws of 2001, is 3 amended to read as follows: 4 (a) Any and all moneys paid to a funeral firm, funeral director, 5 undertaker, cemetery, or any other person, firm or corporation, under or 6 in connection with an agreement, or any option to enter into an agree- 7 ment, for the sale of merchandise to be used in connection with a funer- 8 al or burial, or for the furnishing of personal services of a funeral 9 director or undertaker, wherein the merchandise is not to be actually 10 physically delivered or the personal services are not to be rendered 11 until the occurrence of the death of the person for whose funeral or 12 burial such merchandise or services are to be furnished shall continue 13 to be the money of the person making such payment and shall be held in 14 trust for such person by the funeral firm, funeral director, undertaker, 15 cemetery or any other person, firm or corporation to whom such payment 16 is made and shall, within ten business days of receipt, be deposited in 17 an interest bearing account in a bank, national bank, federal savings 18 bank, federal savings and loan association, savings bank, savings and 19 loan association, credit union, or federal credit union within the state 20 and duly authorized to receive deposits in the state of New York and 21 which shall earn interest at a rate which shall be at not less than the 22 prevailing rate of interest earned by other such deposits in such banks, 23 savings banks, savings and loan associations, or credit unions under 24 this section, or shall be placed in a trust company in an investment EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00295-01-9S. 820 2 1 backed by the government of the United States and shall not be commin- 2 gled with other moneys of the funeral firm, funeral director, undertak- 3 er, cemetery, or other person, firm or corporation or become the funds 4 of the funeral firm, funeral director, undertaker, cemetery, or other 5 person, firm or corporation, and shall be so held on deposit, together 6 with any interest thereon, until said merchandise has been actually 7 physically delivered and said personal services have been rendered, 8 unless sooner repaid, in whole or in part; provided, however, that any 9 and all money paid to a life insurance company as premium for preneed 10 life insurance as defined in section one hundred seven of the insurance 11 law shall be considered as premium paid to an insurer. No funeral firm, 12 funeral director, undertaker, cemetery or any other person, firm or 13 corporation, shall discharge the obligation established under this 14 section to deposit or place money with a bank, national bank, federal 15 savings bank, federal savings and loan association, savings bank, 16 savings and loan association, credit union, federal credit union or 17 trust company within the state through a surety bond or other financial 18 instrument unless expressly provided under this section. 19 § 2. Subsection (a) of section 107 of the insurance law is amended by 20 adding a new paragraph 55 to read as follows: 21 (55) "Preneed life insurance" means any life insurance policy or 22 certificate that is issued in combination with, in support of, with an 23 assignment to, or as a guarantee for, a prearrangement agreement for 24 goods and services, or other benefits, to be provided at the time of and 25 immediately following the death of the insured. Goods and services may 26 include embalming, cremation, body preparation, viewing or visitation, 27 coffin or urn, memorial stone, and transportation of the deceased. The 28 status of the policy or certificate as preneed life insurance is deter- 29 mined at the time of issue in accordance with the policy form filing. 30 § 3. Subsection (d) of section 3208 of the insurance law is amended to 31 read as follows: 32 (d) No person, firm, association, society, or corporation engaged in 33 this state in the business of providing for the payment of funeral, 34 burial or other expenses of deceased members, whether or not it be 35 subject to the other provisions of this chapter, and no insurer shall: 36 (1) deliver or issue for delivery in this state any contract or policy 37 whereby the benefit or any part thereof accruing under such contract or 38 policy, upon the death of such member or of the person insured, shall be 39 payable to a designated or restricted funeral director or funeral 40 directing concern or other person engaged in such trade or business, or 41 to any official or designated group of them, provided, however, that the 42 insured may, pursuant to paragraph one of subsection (b) of section 43 three thousand two hundred five of this article, immediately assign a 44 contract or policy so procured or effectuated to a designated funeral 45 home so long as the assignment is contingent upon the provision of 46 funeral goods and services by the assignee at the time of death of the 47 insured; or 48 (2) pay any such benefit or any part thereof to any funeral director 49 or funeral directing concern or other person engaged in such trade or 50 business or to any official or designated group of them, without the 51 consent of the person or persons entitled to such benefits, subject 52 however, to any contingent assignment, the contingency of which has been 53 satisfied through the provision of funeral goods and services by the 54 assignee; orS. 820 3 1 (3) in any way deprive the personal representative or family of the 2 deceased of the advantages of competition in procuring and purchasing 3 supplies and services in connection with the burial of such deceased; or 4 (4) permit the seller or provider of the preneed life insurance policy 5 to be named as the owner or beneficiary of the policy of preneed life 6 insurance; or 7 (5) sell or offer to sell any contract or policy of preneed life 8 insurance with a face value greater than twenty thousand dollar, plus an 9 annual percentage increase based on the Annual Consumer Price Index 10 compiled by the United States Department of Labor, beginning with the 11 Annual Consumer Price Index announced by the United States Department of 12 Labor for two thousand twenty. 13 § 4. Section 3208 of the insurance law is amended by adding a new 14 subsection (e) to read as follows: 15 (e) The following information shall be adequately disclosed at the 16 time an application is made, prior to accepting the applicant's initial 17 premium or deposit, for any contract or policy of preneed life insur- 18 ance: 19 (1) The fact that a life insurance policy is involved or be used to 20 fund a prearrangement; 21 (2) The nature of the relationship among the soliciting agent or 22 agents, the provider of the funeral or cemetery merchandise services, 23 the administrator and any other person; 24 (3) The relationship of the life insurance policy to the funding of 25 the prearrangement and the nature and existence of any guarantees relat- 26 ing to the prearrangement; 27 (4) The impact on the prearrangement of any: 28 (A) Changes in the life insurance policy including but not limited to, 29 changes in the assignment, beneficiary designation or use of the 30 proceeds; 31 (B) Penalties to be incurred by the policy holder as a result of fail- 32 ure to make premium payments; 33 (C) Penalties to be incurred or monies to be received as a result of 34 cancellation or surrender of the life insurance policy; 35 (5) A list of the merchandise and services which are applied or 36 contracted for in the prearrangement and all relevant information 37 concerning the price of the funeral services, including and indication 38 that the purchase price is either guaranteed at the time of purchase or 39 to be determined at the time of need; 40 (6) The fact that the applicant has the right to surrender the life 41 insurance policy, together with a written request for cancellation, to 42 the insurer during a period of not less than ten days nor more that 43 thirty days from the date the policy was delivered to the policy owner 44 for a refund of premium paid pursuant to paragraph eleven of subsection 45 (a) of section three thousand two hundred three of this article; 46 (7) All relevant information concerning what occurs and whether any 47 entitlements or obligations arise if there is a difference between the 48 proceeds of the life insurance policy and the amount actually needed to 49 fund the prearrangement; 50 (8) Any penalties or restrictions, including but not limited to 51 geographic restrictions or the inability of the provider to perform, on 52 the delivery of merchandise, services or the prearrangement guarantee; 53 (9) If so, the fact that a sales commission or other form of compen- 54 sation is being paid and the identity of the individuals or entities to 55 whom is it paid.S. 820 4 1 § 5. Paragraph (l) of subdivision 1 of section 3450 of the public 2 health law, as amended by chapter 560 of the laws of 1998, is amended to 3 read as follows: 4 (l) has paid, given, has caused to be paid or given or offered to pay 5 or to give to any person a commission, excluding a commission authorized 6 pursuant to article twenty-one of the insurance law, or other valuable 7 consideration for the solicitation or procurement, either directly or 8 indirectly, of funeral patronage, or has accepted any consideration 9 (including without limitation a commission, excluding a commission 10 authorized pursuant to article twenty-one of the insurance law, rebate, 11 or discount or direct or indirect price reduction on merchandise from 12 the current value thereof) from any financial institution or trust 13 company, or agent thereof, with whom the funeral director deposits funds 14 paid for funeral services in advance of need pursuant to subdivision one 15 of section four hundred fifty-three of the general business law; 16 § 6. This act shall take effect immediately and shall expire June 1, 17 2024 when upon such date the provisions of this act shall be deemed 18 repealed; provided, however, that: 19 a. the amendments to paragraphs 2 and 3 of subsection (d) of section 20 3208 of the insurance law made by section three of this act shall take 21 effect on the same date as the reversion of such paragraphs pursuant to 22 section 6 of chapter 557 of the laws of 2001, as amended; 23 b. the amendments to paragraph (l) of subdivision 1 of section 3450 of 24 the public health law made by section five of this act shall take effect 25 on the same date as the reversion of such paragraph pursuant to section 26 6 of chapter 557 of the laws of 2001, as amended; and 27 c. if such reversion pursuant to section 6 of chapter 557 of the laws 28 of 2001, as amended, shall have occurred prior to the effective date of 29 this act, section three and five of this act shall take effect imme- 30 diately.
