Enacts the "Terminate Excessive Cross-state Actuarial Subsidization (TEXAS) Act"

◆ The sponsor's argument

Why James Skoufis says this is needed

Life insurers price their insurance products based not only on an indi- vidual's health history, but on mortality rates, among other investment and expense measures. The health of a population, including rates of mortality, varies greatly by state. Predictors of mortality can be individual in nature - tobacco use, occupation, driving record, lifestyle - or systematic, including the strength of a state's health insurance market, availability of primary care and emergency medicine, socioeconomic trends, and more. Texas, for example, has a mortality rate that's 23% higher than New York's, while Mississippi has a rate that's 59% higher than New York's, according to all-causes mortality tables developed by the National Institutes of Health. Yet, life insurers rely on nationwide health factors when setting rates for New Yorkers, rather than evaluating New York's state-specific health measures. What this means in practice is New York's insureds are often subsidizing the policies of Americans living in states with much worse mortality rates, and are almost certainly overpaying for their coverage. This bill aims to curb this catch-all approach by setting clear expecta- tions for life insurance companies to use New York-specific health information when pricing policies for New Yorkers, and requires the Department of Financial Services to develop a standard weight to be assigned to our state's population health information in rate-setting. According to the American Council of Life Insurers, there were approxi- mately 7.1 million individual life insurance policies in force in New York in 2021, accounting for only 35% of New Yorkers. By curbing an industry practice that has long kept the cost of life insurance arti- ficially inflated in this state, more New Yorkers will have access to this important peace-of-mind resource, ensuring their loved ones are cared for after they're gone.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.