State RegulationsNY specificDifficulty 3/5
An annuity contract subject to N.Y. Ins. Law §3219 contains a misstatement of the annuitant's age. Under §3219, the effect of the misstatement is that:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under N.Y. Ins. Law §3219, if the age or sex of the person upon whose life an annuity contract is made has been misstated, the amount payable or benefit accruing must be the amount the payments would have purchased according to the correct age or sex, with interest at a rate not exceeding 6% per annum credited or charged for any underpayment or overpayment. The contract is not forfeited; the values are simply adjusted to the true age.
Why the other options are wrong
- A) An age misstatement does not render the contract voidable; the statute provides an equitable adjustment of the benefit rather than forfeiture.
- B) Statements relating to age, sex, and identity are excluded from the annuity incontestability protection, so the 2-year period does not cure an age misstatement.
- D) The insurer is not required to refund all considerations; the remedy is adjustment of the benefit to the correct age, not rescission.
Memory hook
Wrong age? Re-price, don't rescind: benefits become what the payments would have bought.