NY| New York Department of Financial Services Insurance Circular Letter No. 4 (2026) provides guidance to all authorized life insurers, licensed fraternal benefit societies, and licensed life agents and brokers on amendments to Insurance Law section 4228 adopted by Chapter 427 of the Laws of 2025, effective September 26, 2025. The amendments refine expense and compensation limitations for life and annuity business by narrowing the salaried employee exemption in section 4228(e)(2)(F) (changing “other than” to “not” and “sales results” to “business personally produced”), revising what constitutes total selling expenses, and clarifying that certain sales-support functions, company-owned equipment, and company-paid conferences and training meetings are excluded from total selling expenses, while travel, meals, and entertainment remain included. They also modify eligibility criteria for training allowance subsidies by allowing such subsidies where an agent has earned less than 40,000 dollars from policy sales over the prior three years, or where less than 25 percent of the agent’s worktime was devoted to individual life and annuity sales, while retaining the existing less‑than‑25‑percent‑of‑earned‑income test. Companies may rely on agent attestations to establish subsidy eligibility (provided they lack contrary knowledge), must maintain those attestations under 11 NYCRR 243, and may now provide larger training allowance subsidies and double the statutory limits on awards and prizes to agents and brokers.
The Circular further clarifies that annual reports to DFS under section 4228(f)(2) regarding compliance with total selling expense limits must be prepared on an aggregate basis, relieving the certifying officer from attesting to each technical component of the underlying calculations. Chapter 427 also amends section 4228(f)(5) to extend from 30 to 90 days the period within which companies must notify DFS of unrecovered overpayments exceeding statutory limits, and removes the notification requirement if the company has made reasonable efforts to recover overpayments from agents or brokers who are no longer appointed, provided the company maintains records of those efforts in accordance with 11 NYCRR 243. DFS expects companies to review and update their procedures, records, and certifications to align with Chapter 427 and this Circular, and directs questions to the dedicated email address listed in the Letter.