State RegulationsNY specificDifficulty 1/5
When a lapsed New York life policy is reinstated, the interest charged on the overdue premiums may not exceed:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §3203(a)(10), the interest charged on overdue premiums in a reinstatement may not exceed 6% per annum compounded annually. The statutory cap keeps the cost of catching up on a lapsed policy predictable for the policyowner and uniform across New York insurers.
Why the other options are wrong
- A) 5% is the long-term care inflation protection illustration figure under 11 NYCRR Part 52 (Reg 62), not the reinstatement interest cap.
- C) The insurer cannot set an unlimited rate; §3203(a)(10) caps reinstatement interest by statute.
- D) Interest is part of the statutory reinstatement requirement and is not waived.
Memory hook
Reinstatement interest tops out at 6% compounded annually.