N.Y. Insurance Law § 4226: Misrepresentations, misleading statements and incomplete comparisons by insurers

§ 4226. Misrepresentations, misleading statements and incomplete

comparisons by insurers. (a) No insurer authorized to do in this state

the business of life, or accident and health insurance, or to make

annuity contracts shall:

(1) issue or circulate, or cause or permit to be issued or circulated

on its behalf, any illustration, circular, statement or memorandum

misrepresenting the terms, benefits or advantages of any of its policies

or contracts;

(2) make any estimate of the dividends or share of surplus or

additional amounts to be received on such policies or contracts;

(3) make any false or misleading statement of the dividends or share

of surplus or additional amounts paid by any such insurer on similar

policies or contracts;

(4) make any misleading representation, or any misrepresentation of

the financial condition of any such insurer or of the legal reserve

system upon which it operates; or

(5) make or deliver to any person or persons any incomplete comparison

of any such policies or contracts for the purpose of inducing, or

tending to induce, such person or persons to lapse, forfeit or surrender

any insurance policy or contract.

(6) replace the individual life insurance policies or individual

annuity contracts of an insurer by the same or different insurer without

conforming to the standards promulgated by regulation by the

superintendent. Such regulation shall:

(A) specify what constitutes the replacement of a life insurance

policy or annuity contract and the proper disclosure and notification

procedures to replace a policy or contract;

(B) require notification of the proposed replacement to the insurer

whose policies or contracts are intended to be replaced;

(C) require the timely exchange of illustrative and cost information

required by section three thousand two hundred nine of this chapter and

necessary for completion of a comparison of the proposed and replaced

coverage; and

(D) provide for a sixty-day period following issuance of the

replacement policies or contracts during which the policy or contract

owner may return the policies or contracts and reinstate the replaced

policies or contracts.

(b) Any comparison of the policies or contracts of any such insurer or

insurers shall be deemed to be an incomplete comparison if it does not

conform to all the requirements for comparisons established by the

superintendent by regulation.

(c) In any determination, judicial or otherwise, of the incompleteness

or misleading character of any such comparison or of representation, it

shall not be presumed that the insured knew or knows of any of the

provisions or benefits contained in any insurance policy or contract.

(d) Any such insurer that knowingly violates any provision of this

section, or knowingly receives any premium or other compensation in

consequence of such violation shall, in addition to any other penalty

provided in this chapter, be liable to a penalty in the amount of such

premium or compensation, which penalty may be sued for and recovered by

any person aggrieved for his own use and benefit, in accordance with the

provisions of the civil practice law and rules.