N.Y. Insurance Law § 4232: Amounts credited on certain contracts or life insurance policies

§ 4232. Amounts credited on certain contracts or life insurance

policies. (a) (1) If any contract subject to section four thousand two

hundred twenty-three of this article, provides for additional amounts to

be credited to the contract during any period in accordance with the

provisions of paragraph one of subsection (g) of section four thousand

two hundred thirty-one of this article, then any additional amounts to

be so credited must be determined for each year during such period.

Except as otherwise provided in the contract in accordance with section

four thousand two hundred twenty-three of this article, the total amount

so credited shall be available to the contract holder upon surrender of

the contract for its cash surrender benefits.

(2) No such additional amounts shall be guaranteed or credited except

upon: (i) reasonable assumptions as to investment income, mortality, and

expenses; (ii) a basis equitable to all contract holders of a given

class; and (iii) written criteria approved by the board of directors of

the company or a committee thereof.

(3) Any such additional amounts credited under a group annuity

contract for which certificates are subject to section four thousand two

hundred twenty-three of this article shall be credited to such

certificates.

(b) (1) Any individual life insurance policy may provide that in

addition to any minimum benefits guaranteed in the policy, additional

amounts may be credited to the policy.

(2) No such additional amounts shall be guaranteed or credited except

upon reasonable assumptions as to investment income, mortality,

persistency, and expenses. The declaration of such additional amounts by

an insurer must be made prospectively; no such additional amounts shall

be credited retroactively to apply to any period prior to such

declaration.

(3) Such additional amounts are required to be credited to any policy,

providing for the crediting of additional amounts, while continued under

a reduced paid-up insurance option, with respect to the period after the

termination or lapse of such policy by reason of default in payment of

any premium, installment or interest on any policy loan and before the

reinstatement of such policy, if it is reinstated. However, an insurer

may use reasonable assumptions as to investment income, mortality,

persistency, and expenses which differ from the assumptions used for

policies in force on a premium paying basis.

(4) Any such additional amounts shall be credited on a basis equitable

to all policyholders of a given class and shall be based on written

criteria approved by the board of directors of the company or a

committee thereof.