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S06143 Summary:

BILL NOS06143B
 
SAME ASSAME AS A07838-A
 
SPONSORLANZA
 
COSPNSR
 
MLTSPNSR
 
Amd 453, Gen Bus L; amd 107 & 3208, Ins L; amd 3450, Pub Health L
 
Relates to preneed insurance premiums.
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S06143 Actions:

BILL NOS06143B
 
05/11/2017REFERRED TO CONSUMER PROTECTION
05/23/2017AMEND (T) AND RECOMMIT TO CONSUMER PROTECTION
05/23/2017PRINT NUMBER 6143A
01/03/2018REFERRED TO CONSUMER PROTECTION
01/26/2018AMEND AND RECOMMIT TO CONSUMER PROTECTION
01/26/2018PRINT NUMBER 6143B
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S06143 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6143--B
 
                               2017-2018 Regular Sessions
 
                    IN SENATE
 
                                      May 11, 2017
                                       ___________
 
        Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
          printed to be committed to the Committee  on  Consumer  Protection  --
          committee  discharged,  bill amended, ordered reprinted as amended and
          recommitted to said committee  --  recommitted  to  the  Committee  on
          Consumer  Protection  in  accordance  with  Senate  Rule  6, sec. 8 --
          committee discharged, bill amended, ordered reprinted as  amended  and
          recommitted to said committee
 
        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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11309-03-8

        S. 6143--B                          2
 
     1  and duly authorized to receive deposits in the state  of  New  York  and
     2  which  shall earn interest at a rate which shall be at not less than the
     3  prevailing rate of interest earned by other such deposits in such banks,
     4  savings  banks,  savings  and  loan associations, or credit unions under
     5  this section, or shall be placed in a trust  company  in  an  investment
     6  backed  by  the government of the United States and shall not be commin-
     7  gled with other moneys of the funeral firm, funeral director,  undertak-
     8  er,  cemetery,  or other person, firm or corporation or become the funds
     9  of the funeral firm, funeral director, undertaker,  cemetery,  or  other
    10  person,  firm  or corporation, and shall be so held on deposit, together
    11  with any interest thereon, until  said  merchandise  has  been  actually
    12  physically  delivered  and  said  personal  services have been rendered,
    13  unless sooner repaid, in whole or in part; provided, however,  that  any
    14  and  all  money  paid to a life insurance company as premium for preneed
    15  life insurance as defined in section one hundred seven of the  insurance
    16  law  shall be considered as premium paid to an insurer. No funeral firm,
    17  funeral director, undertaker, cemetery or  any  other  person,  firm  or
    18  corporation,  shall  discharge  the  obligation  established  under this
    19  section to deposit or place money with a bank,  national  bank,  federal
    20  savings  bank,  federal  savings  and  loan  association,  savings bank,
    21  savings and loan association, credit  union,  federal  credit  union  or
    22  trust  company within the state through a surety bond or other financial
    23  instrument unless expressly provided under this section.
    24    § 2. Subsection (a) of section 107 of the insurance law is amended  by
    25  adding a new paragraph 55 to read as follows:
    26    (55)  "Preneed  life  insurance"  means  any  life insurance policy or
    27  certificate that is issued in combination with, in support of,  with  an
    28  assignment  to,  or  as  a guarantee for, a prearrangement agreement for
    29  goods and services, or other benefits, to be provided at the time of and
    30  immediately following the death of the insured. Goods and  services  may
    31  include  embalming,  cremation, body preparation, viewing or visitation,
    32  coffin or urn, memorial stone, and transportation of the  deceased.  The
    33  status  of the policy or certificate as preneed life insurance is deter-
    34  mined at the time of issue in accordance with the policy form filing.
    35    § 3. Subsection (d) of section 3208 of the insurance law is amended to
    36  read as follows:
    37    (d) No person, firm, association, society, or corporation  engaged  in
    38  this  state  in  the  business  of providing for the payment of funeral,
    39  burial or other expenses of deceased  members,  whether  or  not  it  be
    40  subject to the other provisions of this chapter, and no insurer shall:
    41    (1) deliver or issue for delivery in this state any contract or policy
    42  whereby  the benefit or any part thereof accruing under such contract or
    43  policy, upon the death of such member or of the person insured, shall be
    44  payable to a  designated  or  restricted  funeral  director  or  funeral
    45  directing  concern or other person engaged in such trade or business, or
    46  to any official or designated group of them, provided, however, that the
    47  insured may, pursuant to paragraph one  of  subsection  (b)  of  section
    48  three  thousand  two  hundred five of this article, immediately assign a
    49  contract or policy so procured or effectuated to  a  designated  funeral
    50  home  so  long  as  the  assignment  is contingent upon the provision of
    51  funeral goods and services by the assignee at the time of death  of  the
    52  insured; or
    53    (2)  pay  any such benefit or any part thereof to any funeral director
    54  or funeral directing concern or other person engaged in  such  trade  or
    55  business  or  to  any  official or designated group of them, without the
    56  consent of the person or persons  entitled  to  such  benefits,  subject

        S. 6143--B                          3
 
     1  however, to any contingent assignment, the contingency of which has been
     2  satisfied  through  the  provision  of funeral goods and services by the
     3  assignee; or
     4    (3)  in  any  way deprive the personal representative or family of the
     5  deceased of the advantages of competition in  procuring  and  purchasing
     6  supplies and services in connection with the burial of such deceased; or
     7    (4) permit the seller or provider of the preneed life insurance policy
     8  to  be  named  as the owner or beneficiary of the policy of preneed life
     9  insurance; or
    10    (5) sell or offer to sell any  contract  or  policy  of  preneed  life
    11  insurance with a face value greater than twenty thousand dollar, plus an
    12  annual  percentage  increase  based  on  the Annual Consumer Price Index
    13  compiled by the United States Department of Labor,  beginning  with  the
    14  Annual Consumer Price Index announced by the United States Department of
    15  Labor for two thousand nineteen.
    16    §  4.  Section  3208  of  the insurance law is amended by adding a new
    17  subsection (e) to read as follows:
    18    (e) The following information shall be  adequately  disclosed  at  the
    19  time  an application is made, prior to accepting the applicant's initial
    20  premium or deposit, for any contract or policy of  preneed  life  insur-
    21  ance:
    22    (1)  The  fact  that a life insurance policy is involved or be used to
    23  fund a prearrangement;
    24    (2) The nature of the  relationship  among  the  soliciting  agent  or
    25  agents,  the  provider  of the funeral or cemetery merchandise services,
    26  the administrator and any other person;
    27    (3) The relationship of the life insurance policy to  the  funding  of
    28  the prearrangement and the nature and existence of any guarantees relat-
    29  ing to the prearrangement;
    30    (4) The impact on the prearrangement of any:
    31    (A) Changes in the life insurance policy including but not limited to,
    32  changes  in  the  assignment,  beneficiary  designation  or  use  of the
    33  proceeds;
    34    (B) Penalties to be incurred by the policy holder as a result of fail-
    35  ure to make premium payments;
    36    (C) Penalties to be incurred or monies to be received as a  result  of
    37  cancellation or surrender of the life insurance policy;
    38    (5)  A  list  of  the  merchandise  and  services which are applied or
    39  contracted for  in  the  prearrangement  and  all  relevant  information
    40  concerning  the  price of the funeral services, including and indication
    41  that the purchase price is either guaranteed at the time of purchase  or
    42  to be determined at the time of need;
    43    (6)  The  fact  that the applicant has the right to surrender the life
    44  insurance policy, together with a written request for  cancellation,  to
    45  the  insurer  during  a  period  of not less than ten days nor more that
    46  thirty days from the date the policy was delivered to the  policy  owner
    47  for  a refund of premium paid pursuant to paragraph eleven of subsection
    48  (a) of section three thousand two hundred three of this article;
    49    (7) All relevant information concerning what occurs  and  whether  any
    50  entitlements  or  obligations arise if there is a difference between the
    51  proceeds of the life insurance policy and the amount actually needed  to
    52  fund the prearrangement;
    53    (8)  Any  penalties  or  restrictions,  including  but  not limited to
    54  geographic restrictions or the inability of the provider to perform,  on
    55  the delivery of merchandise, services or the prearrangement guarantee;

        S. 6143--B                          4
 
     1    (9)  If  so, the fact that a sales commission or other form of compen-
     2  sation is being paid and the identity of the individuals or entities  to
     3  whom is it paid.
     4    §  5.  Paragraph  (l)  of  subdivision 1 of section 3450 of the public
     5  health law, as amended by chapter 560 of the laws of 1998, is amended to
     6  read as follows:
     7    (l) has paid, given, has caused to be paid or given or offered to  pay
     8  or to give to any person a commission, excluding a commission authorized
     9  pursuant  to  article twenty-one of the insurance law, or other valuable
    10  consideration for the solicitation or procurement,  either  directly  or
    11  indirectly,  of  funeral  patronage,  or  has accepted any consideration
    12  (including without  limitation  a  commission,  excluding  a  commission
    13  authorized  pursuant to article twenty-one of the insurance law, rebate,
    14  or discount or direct or indirect price reduction  on  merchandise  from
    15  the  current  value  thereof)  from  any  financial institution or trust
    16  company, or agent thereof, with whom the funeral director deposits funds
    17  paid for funeral services in advance of need pursuant to subdivision one
    18  of section four hundred fifty-three of the general business law;
    19    § 6. This act shall take effect immediately and shall expire  June  1,
    20  2023  when  upon  such  date  the provisions of this act shall be deemed
    21  repealed; provided, however, that:
    22    a. the amendments to paragraphs 2 and 3 of subsection (d)  of  section
    23  3208  of  the insurance law made by section three of this act shall take
    24  effect on the same date as the reversion of such paragraphs pursuant  to
    25  section 6 of chapter 557 of the laws of 2001, as amended;
    26    b. the amendments to paragraph (l) of subdivision 1 of section 3450 of
    27  the public health law made by section five of this act shall take effect
    28  on  the same date as the reversion of such paragraph pursuant to section
    29  6 of chapter 557 of the laws of 2001, as amended; and
    30    c. if such reversion pursuant to section 6 of chapter 557 of the  laws
    31  of  2001, as amended, shall have occurred prior to the effective date of
    32  this act, section three and five of this act  shall  take  effect  imme-
    33  diately.
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