Updates to NY’s Individual Life Application Outline

By Alexandra Smith, JD

New York State map, black on white background

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The NYSDFS’s Life Bureau posted a revised Outline for Individual Life Applications with some major updates last month. I’ve highlighted three updates that we see as current hot topics below.

1. Consumers can’t say what?!

The Outline includes a new section regarding Suitability/Best Interest Attestations. Although short, this section states that producer attestations to Suitability/Best Interest may appear in the producer section of an application, but the consumer may not attest to Suitability/Best Interest at all.

The Department said recently in an objection, “Generally, whether included in application forms or separate administrative forms, it should be the producer, not the consumer, who is making attestations as to whether a product is suitable or in the consumer’s best interest.”

What does this mean for insurers? Any application where applicant signs a statement acknowledging or attesting to a belief that the product is suitable or in their best interest is considered to be out of compliance with this new guidance. It appears that NY intends that any applications with previously approved language to this effect must be re-filed to remove language they approved prior to the promulgation of Reg 187 because the regulation shifts the burden to producers and carriers to determine suitability, not consumers. 

2. Post-Submission Form Substitutions are back!

The revised Outline now provides that a recently approved policy form may be substituted through a request made as a Note to Filer in SERFF. Yay! We have long hoped that NY would again allow for minor corrections to approved forms without having to file a new form with a new form number.

Note however that, form substitutions are limited to forms approved through full prior-approval filings, and are not allowed for certified CL6 filings. Also, any revision must be only to correct a “minor” error found after approval and only when the approved form has not yet been issued.

This is a major win for companies filing in NY. Since the time for review and approval has seemingly been getting longer and longer, and there are substantial administrative costs in changing and coding a new form number, this process change can ease policy form re-filings.

3. Process document filings for direct-to-consumer E-Apps are clarified

With all the hubbub about electronic applications in NY, it is almost a given that there would be new guidance about the topic. Unfortunately, the new guidance only adds to the existing requirements and does not remove any current mandates.

The revised Outline provides some clarification on filing process documents for electronic applications completed without a producer. Specifically, a new section sets out three criteria to be discussed in the required electronic process document:

• how the company determines the existence of insurable interest,

• how consent to insure is obtained from the insured when consent is required, and

• how the company verifies the identity of the insured when the insured signs the consent.

Although some companies may have received objections to filings that included this guidance already, it is important to note these requirements for others interested in moving into the area of fully tech-based applications with no producer involvement.