Drinker Biddle’s Insurance Team hosted a webinar on February 22, 2018, discussing the recent regulations and circular letter from the New York State Department of Financial Services (DFS). The discussion included the following topics:

Insurance Regulation 210 & Insurance Regulation 187

Regulation 210, which takes effect on March 19, 2018, addresses issues regarding the determination and readjustment of non-guaranteed elements in life insurance policies. On December 27, 2017, the DFS also proposed a revised suitability regulation (Regulation 187) that would, inter alia, establish a best-interest standard for annuity and life insurance sales. H. Michael Byrne provided an overview of both regulations and give an outline of some of the key issues surrounding the adoption of Regulation 210 and the potential adoption of Regulation 187.

Circular Letter No. 1 - Contestable Claims

On January 27, 2017, the DFS issued Circular Letter No. 1, condemning the life insurance industry practice of performing contestable investigations in the absence of clear evidence of misrepresentation. The DFS has similarly condemned the practice of withholding benefits when policy owners or beneficiaries refuse to cooperate. Jason P. Gosselin addressed the historical underpinnings of the contestable clause as well as the public policy rationale for allowing contestable investigations regardless of whether the insurer knows of specific misrepresentations. He also discussed how this letter has impacted claim practices in New York, the industry’s reactions to the letter, and potential litigation exposure for life insurers.

Insurance Regulation 500

Effective March 1, 2017, the New York Cybersecurity Regulation is a first-of-its-kind regulation that provides relatively detailed guidance on how insurers must develop and maintain cybersecurity policies and procedures. Katherine E. Armstrong reviewed the compliance deadlines contained in Insurance Regulation 500 and provided practical advice to help your company prepare for the new standards in 2018 and 2019.

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