Bill Text: NY A07987 | 2021-2022 | General Assembly | Introduced
Bill Title: Authorizes the power authority of the state of New York to form a pure captive insurance company.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2022-05-09 - signed chap.193 [A07987 Detail]
Download: New_York-2021-A07987-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7987 2021-2022 Regular Sessions IN ASSEMBLY June 4, 2021 ___________ Introduced by M. of A. CUSICK -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law, the public authorities law and the tax law, in relation to authorizing the power authority of the state of New York to form a pure captive insurance company The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsections (e) and (g) of section 7002 of the insurance 2 law, as amended by chapter 188 of the laws of 2003, are amended to read 3 as follows: 4 (e) "Industrial insured" means an insured: 5 (1) whose net worth exceeds one hundred million dollars; 6 (2) who is a member of a holding company system whose net worth 7 exceeds one hundred million dollars; 8 (3) who is the metropolitan transportation authority and its statutory 9 subsidiaries. When filing an application to form a pure captive insur- 10 ance company the metropolitan transportation authority shall submit 11 written notice of such filing to the governor, the temporary president 12 of the senate and the speaker of the assembly; [or] 13 (4) who is the power authority of the state of New York and any statu- 14 tory subsidiary thereof. When filing an application to form a pure 15 captive insurance company the power authority shall submit written 16 notice of such filing to the governor, the temporary president of the 17 senate and the speaker of the assembly; or 18 (5) who is a city with a population of one million or more. When 19 filing an application to form a pure captive insurance company, a city 20 with a population of one million or more shall submit written notice of 21 such filing to the governor, the temporary president of the senate and 22 the speaker of the assembly. 23 (g) "Industrial insured group" means any group of unaffiliated indus- 24 trial insureds that are engaged in similar or related businesses or EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD12024-01-1A. 7987 2 1 activities, however, the metropolitan transportation authority, the 2 power authority of the state of New York and any statutory subsidiary 3 thereof and cities with a population of one million or more shall not be 4 a member of an industrial insured group, and that collectively: 5 (1) own, control or hold with power to vote all of the outstanding 6 voting shares of stock of a group captive insurance company incorporated 7 as a stock insurer; or 8 (2) represent one hundred percent of the voting members of a group 9 captive insurance company organized as a mutual insurer. 10 § 2. Section 1005 of the public authorities law is amended by adding a 11 new subdivision 28 to read as follows: 12 28. The authority may establish a subsidiary corporation for the 13 purpose of forming a pure captive insurance company as provided in 14 section seven thousand two of the insurance law. The members of such 15 subsidiary corporation of the authority shall be the same persons hold- 16 ing the offices of members of the authority. The employees of any such 17 subsidiary corporation, except those who are also employees of the 18 authority, shall not be deemed employees of the authority. 19 § 3. Subdivision (a) of section 1500 of the tax law, as amended by 20 section 21 of part A of chapter 59 of the laws of 2014, is amended to 21 read as follows: 22 (a) The term "insurance corporation" includes a corporation, associ- 23 ation, joint stock company or association, person, society, aggregation 24 or partnership, by whatever name known, doing an insurance business, 25 and, notwithstanding the provisions of section fifteen hundred twelve of 26 this article, shall include (1) a risk retention group as defined in 27 subsection (n) of section five thousand nine hundred two of the insur- 28 ance law, (2) the state insurance fund and (3) a corporation, associ- 29 ation, joint stock company or association, person, society, aggregation 30 or partnership doing an insurance business as a member of the New York 31 insurance exchange described in section six thousand two hundred one of 32 the insurance law. The definition of the "state insurance fund" 33 contained in this subdivision shall be limited in its effect to the 34 provisions of this article and the related provisions of this chapter 35 and shall have no force and effect other than with respect to such 36 provisions. The term "insurance corporation" shall also include a 37 captive insurance company doing a captive insurance business, as defined 38 in subsections (c) and (b), respectively, of section seven thousand two 39 of the insurance law; provided, however, "insurance corporation" shall 40 not include the metropolitan transportation authority, the power author- 41 ity of New York or any statutory subsidiary thereof, or a public benefit 42 corporation or not-for-profit corporation formed by a city with a popu- 43 lation of one million or more pursuant to subsection (a) of section 44 seven thousand five of the insurance law, each of which is expressly 45 exempt from the payment of fees, taxes or assessments, whether state or 46 local; and provided further "insurance corporation" does not include any 47 combinable captive insurance company. The term "insurance corporation" 48 shall also include an unauthorized insurer operating from an office 49 within the state, pursuant to paragraph five of subsection (b) of 50 section one thousand one hundred one and subsection (i) of section two 51 thousand one hundred seventeen of the insurance law. The term "insurance 52 corporation" also includes a health maintenance organization required to 53 obtain a certificate of authority under article forty-four of the public 54 health law.A. 7987 3 1 § 4. Subdivision (a) of section 1502-b of the tax law, as amended by 2 section 22 of part A of chapter 59 of the laws of 2014, is amended to 3 read as follows: 4 (a) In lieu of the taxes and tax surcharge imposed by sections fifteen 5 hundred one, fifteen hundred two-a, fifteen hundred five-a, and fifteen 6 hundred ten of this article, every captive insurance company licensed by 7 the superintendent of financial services pursuant to the provisions of 8 article seventy of the insurance law, other than the metropolitan trans- 9 portation authority, the power authority of New York or any statutory 10 subsidiary thereof, and a public benefit corporation or not-for-profit 11 corporation formed by a city with a population of one million or more 12 pursuant to subsection (a) of section seven thousand five of the insur- 13 ance law, each of which is expressly exempt from the payment of fees, 14 taxes or assessments whether state or local, and other than combinable 15 captive insurance company, shall, for the privilege of exercising its 16 corporate franchise, pay a tax on (1) all gross direct premiums, less 17 return premiums thereon, written on risks located or resident in this 18 state and (2) all assumed reinsurance premiums, less return premiums 19 thereon, written on risks located or resident in this state. The rate of 20 the tax imposed on gross direct premiums shall be four-tenths of one 21 percent on all or any part of the first twenty million dollars of premi- 22 ums, three-tenths of one percent on all or any part of the second twenty 23 million dollars of premiums, two-tenths of one percent on all or any 24 part of the third twenty million dollars of premiums, and seventy-five 25 thousandths of one percent on each dollar of premiums thereafter. The 26 rate of the tax on assumed reinsurance premiums shall be two hundred 27 twenty-five thousandths of one percent on all or any part of the first 28 twenty million dollars of premiums, one hundred and fifty thousandths of 29 one percent on all or any part of the second twenty million dollars of 30 premiums, fifty thousandths of one percent on all or any part of the 31 third twenty million dollars of premiums and twenty-five thousandths of 32 one percent on each dollar of premiums thereafter. The tax imposed by 33 this section shall be equal to the greater of (i) the sum of the tax 34 imposed on gross direct premiums and the tax imposed on assumed reinsur- 35 ance premiums or (ii) five thousand dollars. 36 § 5. This act shall take effect immediately.
