This bill makes changes to §4223 of the Insurance Law, which pertains to the standard nonforfeiture law for annuities. This law was originally enacted in 1984 and has become outdated over the past two decades. The law contains several fixed dollar limits and a minimum guaranteed interest rate for fixed annuities.
Fixed annuities pay the customer at a guaranteed rate. Nonforfeiture of a fixed annuity is the minimum guaranteed interest rate that the customer will receive. Currently, the law reflects a rate that is outdated. This bill would not only update the rate at which the fixed annuity would pay, it would establish a mechanism for keeping the rate structure current.
This bill will bring New York's standard nonforfeiture law for annuities into conformity with the National Association of Insurance Commissioners Model Standard Nonforfeiture Law for Individual Deferred Annuities and, more importantly, will bring a two-decade old section of law into the 21st century.
For the abovementioned reasons, the Business Council supports this bill and urges its adoption.