Thanks largely to the lobbying efforts of NAIFA-New York State, the New York State Department of Finances has amended Regulation 60 to allow insurers to accept applications immediately and issue disclosures later, before the policy goes into effect.

This will speed up the processing of applications and reduce the difficulty of complying with the regulation for consumers and advisors. It should also reduce a problem that emerged when insurers would have to revise the disclosure documents to account for changes that occurred during the waiting period.

"We congratulate and thank the New York State Department of Finances and its Life Bureau for working with us to accomplish this amendment," said NAIFA-New York President Lawrence J. Holzberg. "This reform will bring positive and necessary changes that will allow NAIFA members to better serve their clients' interests safely and securely."

Regulation 60 is a well-meaning measure designed to protect consumers from unwanted or unnecessary replacements of existing life insurance or annuity policies. In practice, however, it has forced consumers (and their advisors) who are certain they want to replace their policies to jump through regulatory hoops and endure lengthy, unnecessary delays.

Passed in 1999, the regulation requires anyone applying for a life insurance policy or annuity contract in New York to authorize the insurer to obtain information about any existing coverage they may hold. The insurer then must provide standard disclosures comparing the existing policies to the new one.

Many states have similar regulations. What makes Regulation 60 in New York different and more burdensome is that it imposes a 26-day waiting period to allow the insurer time to gather information and prepare the disclosures, which must be completed before the insurance company can even accept an application from the consumer.

The delay is mandatory even if the differences in the old and new coverages are obvious. The benefits of the new coverage, such as a lower price for the same coverage or extended coverage, may be readily apparent, but the waiting period still applies. Because of this, the insurer cannot begin processing the application or completing any underwriting requirements until after the waiting period, which can draw out the process well beyond 26 days.

In the end, the amended Regulation 60 will give the same consumer protections it has always given but will streamline the process of complying with the regulation. This, in turn, will reduce the frustration of consumers who legitimately want or need to replace an outdated insurance policy or annuity contract.