N.Y. Insurance Law § 3227: Interest upon surrenders, policy loans and other funds

§ 3227. Interest upon surrenders, policy loans and other funds. (a)

Interest, at the rate provided for in section three thousand two hundred

fourteen of this article, shall be payable by life insurers, fraternal

benefit societies, and life insurance departments of savings banks upon:

(1) the value of policies surrendered by policyholders for cash values,

including the rollover of annuity funds to other entities, and (2) the

funds disbursed as policy loans. Such interest payment shall be added to

and be a part of the total sum paid or be paid separately at the option

of the insurer.

(b) The interest calculated on amounts described in paragraphs one and

two of subsection (a) hereof shall be calculated from the date the

documentation necessary to complete the transaction is received by the

insurer and shall be payable if the funds are not mailed or delivered by

the insurer within ten working days of said receipt.

(c) No interest need be payable pursuant to this section unless the

amount of such interest is at least twenty-five dollars or if the

payment of benefits by the insurer has been deferred pursuant to other

provisions of this chapter.

(d) Irrespective of the payment of interest in accordance with the

above provisions, such life insurers, fraternal benefit societies and

life insurance departments of savings banks shall make disbursements

under paragraphs one and two of subsection (a) hereof as expeditiously

as possible.