New York law prohibits automatic rollovers?

[Übernerd]

I heard today from an annuity carrier that it could not comply with the provisions of our client's retirement plan, which provide for automatic rollover distributions on the plan's termination (for participants who fail to respond to election forms). The stated reason was that New York law prohibits the establishment of an IRA without the account holder's signature. That would seem to interfere with the automatic rollover rules under 401(a)(31). Has anybody heard of this? Client is going out of business and needs to roll these accounts out of the terminating plan. Thanks.