For the first time, life insurers would be required to give New York State regulators and consumers advance notice of when the companies intend to raise premiums on life insurance and annuity policies, under a new rule proposed by the state Department of Financial Services.
See also: Dealing with universal life premium increases
A 45-day comment period about the new proposal would begin once it is published in the official State Register on Nov. 30. If left unaltered by the department based on that feedback, the regulation would go into effect in early 2017, according to the department.
The department said it developed the new rule in response to complaints it has received from New York consumers, including many owners of older policies taken out years or decades ago, who said their insurers had not informed them of large, immediate premium increases. DFS spokesman Richard Loconte said Friday the complained-of premium hikes have at times been 100 percent or more.
Years of relatively low interest rates and returns on investments have been cited by life insurers for lowering the profitability of their investments and forcing them to hike premiums.
Under the new rules, life insurers must inform DFS of premium increases on non-guaranteed life and annuity polices at least 120 days prior to imposing the higher charges.
The regulations would also require that consumers receive notices at least 60 days prior to premium hikes.
No notifications are now required.
Insurers in New York are not currently required by law to inform consumers of policy premium hikes. (Photo: iStock)