INSURANCE DEPARTMENT OF THE STATE OF NEW YORK
REGULATION NO. 180
11 NYCRR 48
KEY PERSON COMPANY-OWNED LIFE INSURANCE
(ALL MATERIAL IS NEW)
I, Howard Mills, Superintendent of Insurance of the State of New York,
, to take effect upon filing with the
Secretary of State, t
(d) The purpose of this Part is to establish standards for life insurers and fraternal benefit societies issuing key person company-owned life insurance to ensure that the employees or other persons on whose lives coverage is being written pursuant to Section 3205(a)(1)(B) of the Insurance Law are actually key persons.
An insurer using key person company-owned life insurance shall establish and apply
appropriate underwriting guidelines to ensure that the employees or other persons on whose lives policies are written pursuant to Section 3205(a)(1)(B) are actually key persons. ? 48.2 Standards.
the term key person shall include the following persons:
(a) An employee who is one of the five highest paid officers of the employer;
(b) An employee who is a five-percent owner of the employer.
(c) An employee who had compensation from the employer in excess of $90,000 in the preceding year;
(d) An employee who is among the highest paid 35 percent of all employees; or
(e) An employee or other person who makes a significant economic contribution to the company
Pursuant to Section 202(6) of the State Administrative Procedure Act, 11 NYCRR 48 (Regulation No. 180) is being promulgated as an emergency measure. A statement of the specific reasons for the finding of the need for emergency action is attached.
STATEMENT OF REASONS FOR EMERGENCY MEASURE
FOR THE PROMULGATION OF THE NEW
11 NYCRR 48 (REGULATION NO. 180)
Corporate-owned life insurance covering rank-and-file employees, also called “janitors insurance” or “dead peasant insurance,” has been the focus of numerous negative press articles and public commentaries over the last several years.