Bill Text: NY A09915 | 2013-2014 | General Assembly | Introduced
Bill Title: Relates to the life insurance company guaranty corporation of New York.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2014-11-21 - signed chap.454 [A09915 Detail]
Download: New_York-2013-A09915-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
9915
I N A S S E M B L Y
May 28, 2014
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Cahill) --
read once and referred to the Committee on Insurance
AN ACT to amend the insurance law, in relation to the life insurance
company guaranty corporation of New York
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Section 7702 of the insurance law, as added by chapter 802
2 of the laws of 1985, is amended to read as follows:
3 S 7702. Purpose. The purpose of this article is to provide funds to
4 protect [resident policyowners] POLICY OWNERS, insureds, beneficiaries,
5 annuitants, payees and assignees of life insurance policies, health
6 insurance policies, annuity contracts, funding agreements and supple-
7 mental contracts issued by life insurance companies, subject to certain
8 limitations, against failure in the performance of contractual obli-
9 gations due to the impairment or insolvency of the insurer issuing such
10 policies [or], contracts, OR FUNDING AGREEMENTS. In the judgment of the
11 legislature, the foregoing objects and purposes not being capable of
12 accomplishment by a corporation created under general laws, the creation
13 of a not-for-profit corporation of insurers is provided for by this
14 article to enable the guarantee of payment of benefits and of continua-
15 tion of coverages, and members of the corporation are subject to assess-
16 ment to carry out the purposes of this article.
17 S 2. Section 7703 of the insurance law, as added by chapter 802 of the
18 laws of 1985, is amended to read as follows:
19 S 7703. Scope. (a) (1) This article shall apply to direct life insur-
20 ance policies, health insurance policies, annuity contracts, funding
21 agreements, and SUPPLEMENTAL contracts [supplemental to life and health
22 insurance policies, annuity contracts or funding agreements] issued [to
23 a resident] by a life insurance company licensed to transact life or
24 health insurance or annuities in this state at the time the policy,
25 contract, or FUNDING agreement was issued or [at the time it became] ON
26 THE DATE OF ENTRY OF A COURT ORDER OF LIQUIDATION OR REHABILITATION WITH
27 RESPECT TO SUCH A COMPANY THAT IS an impaired or insolvent insurer, as
28 the case may be.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15111-04-4
A. 9915 2
1 (2) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THIS ARTICLE SHALL
2 APPLY TO THE POLICIES, CONTRACTS, AND FUNDING AGREEMENTS SPECIFIED IN
3 PARAGRAPH ONE OF THIS SUBSECTION WITH REGARD TO A PERSON WHO IS:
4 (A) AN OWNER OR CERTIFICATE HOLDER UNDER A POLICY, CONTRACT, OR FUND-
5 ING AGREEMENT AND IN EACH CASE WHO:
6 (I) IS A RESIDENT; OR
7 (II) IS NOT A RESIDENT, BUT ONLY UNDER ALL OF THE FOLLOWING CONDI-
8 TIONS:
9 (I) THE INSURER THAT ISSUED THE POLICY, CONTRACT, OR AGREEMENT IS
10 DOMICILED IN THIS STATE;
11 (II) THE STATE OR STATES IN WHICH THE PERSON RESIDES HAS OR HAVE A
12 GUARANTY ENTITY SIMILAR TO THE CORPORATION CREATED BY THIS ARTICLE; AND
13 (III) THE PERSON IS NOT ELIGIBLE FOR COVERAGE BY A GUARANTY ENTITY IN
14 ANY OTHER STATE BECAUSE THE INSURER WAS NOT LICENSED OR AUTHORIZED IN
15 THAT STATE AT THE TIME SPECIFIED IN THAT STATE'S GUARANTY ENTITY LAW; OR
16 (B) THE BENEFICIARY, ASSIGNEE, OR PAYEE OF THE PERSON SPECIFIED IN
17 SUBPARAGRAPH (A) OF THIS PARAGRAPH, REGARDLESS OF WHERE THE PERSON
18 RESIDES.
19 (3) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION:
20 (A) WITH REGARD TO A GROUP ANNUITY CONTRACT (OR PORTION OF ANY SUCH
21 CONTRACT) THAT DOES NOT GUARANTEE ANNUITY BENEFITS WITH RESPECT TO ANY
22 SPECIFIC INDIVIDUAL IDENTIFIED IN THE CONTRACT, THIS ARTICLE SHALL APPLY
23 TO A PERSON WHO IS THE OWNER OF SUCH A CONTRACT:
24 (I) IF THE CONTRACT IS ISSUED TO OR IN CONNECTION WITH A SPECIFIC
25 BENEFIT PLAN WHERE THE PLAN SPONSOR HAS ITS PRINCIPAL PLACE OF BUSINESS
26 IN THIS STATE; PROVIDED, HOWEVER, THAT FOR THE PURPOSE OF THIS SUBPARA-
27 GRAPH:
28 (I) "PLAN SPONSOR" SHALL MEAN:
29 (AA) THE EMPLOYER IN THE CASE OF A BENEFIT PLAN ESTABLISHED OR MAIN-
30 TAINED BY A SINGLE EMPLOYER;
31 (BB) THE EMPLOYEE ORGANIZATION IN THE CASE OF A BENEFIT PLAN ESTAB-
32 LISHED OR MAINTAINED BY AN EMPLOYEE ORGANIZATION, PROVIDED THAT "EMPLOY-
33 EE ORGANIZATION" SHALL MEAN ANY LABOR UNION OR ANY ORGANIZATION OF ANY
34 KIND, OR ANY AGENCY OR EMPLOYEE REPRESENTATION COMMITTEE, ASSOCIATION,
35 GROUP, OR PLAN, IN WHICH EMPLOYEES PARTICIPATE AND THAT EXISTS FOR THE
36 PURPOSE, IN WHOLE OR IN PART, OF DEALING WITH EMPLOYERS CONCERNING AN
37 EMPLOYEE BENEFIT PLAN, OR OTHER MATTERS INCIDENTAL TO EMPLOYMENT
38 RELATIONSHIPS, OR ANY EMPLOYEES' BENEFICIARY ASSOCIATION ORGANIZED FOR
39 THE PURPOSE IN WHOLE OR IN PART, OF ESTABLISHING SUCH A PLAN; OR
40 (CC) IN THE CASE OF A BENEFIT PLAN ESTABLISHED OR MAINTAINED BY TWO OR
41 MORE EMPLOYERS OR JOINTLY BY ONE OR MORE EMPLOYERS AND ONE OR MORE
42 EMPLOYEE ORGANIZATIONS, THE ASSOCIATION, COMMITTEE, JOINT BOARD OF TRUS-
43 TEES, OR OTHER SIMILAR GROUP OF REPRESENTATIVES OF THE PARTIES WHO
44 ESTABLISH OR MAINTAIN THE BENEFIT PLAN; AND
45 (II) "PRINCIPAL PLACE OF BUSINESS" SHALL MEAN:
46 (AA) THE STATE IN WHICH THE INDIVIDUALS WHO ESTABLISH POLICY FOR THE
47 DIRECTION, CONTROL, AND COORDINATION OF THE OPERATIONS OF THE ENTITY AS
48 A WHOLE PRIMARILY EXERCISE THAT FUNCTION, EXCEPT THAT IF MORE THAN FIFTY
49 PERCENT OF THE PARTICIPANTS IN THE BENEFIT PLAN ARE EMPLOYED IN A SINGLE
50 STATE, THEN THAT STATE SHALL BE DEEMED TO BE THE PRINCIPAL PLACE OF
51 BUSINESS OF THE PLAN SPONSOR; OR
52 (BB) WITH REGARD TO A PLAN SPONSOR OF A BENEFIT PLAN DESCRIBED IN
53 SUBITEM (CC) OF CLAUSE (I) OF THIS ITEM, THE PRINCIPAL PLACE OF BUSI-
54 NESS, AS DETERMINED PURSUANT TO SUBITEM (AA) OF THIS CLAUSE, OF THE
55 EMPLOYER OR EMPLOYEE ORGANIZATION THAT HAS THE LARGEST INVESTMENT IN THE
56 BENEFIT PLAN; OR
A. 9915 3
1 (II) ISSUED TO OR IN CONNECTION WITH A GOVERNMENT LOTTERY IF THE OWNER
2 IS A RESIDENT; AND
3 (B) WITH REGARD TO A STRUCTURED SETTLEMENT ANNUITY, THIS SECTION SHALL
4 APPLY TO A PERSON WHO IS A PAYEE UNDER THE STRUCTURED SETTLEMENT ANNUI-
5 TY, OR THE BENEFICIARY OF A PAYEE IF THE PAYEE IS DECEASED, IF THE PAYEE
6 (OR BENEFICIARY):
7 (I) IS A RESIDENT, REGARDLESS OF WHERE THE OWNER OF THE STRUCTURED
8 SETTLEMENT ANNUITY RESIDES; OR
9 (II) IS NOT A RESIDENT, BUT ONLY UNDER THE FOLLOWING CONDITIONS:
10 (I) (AA) THE OWNER OF THE STRUCTURED SETTLEMENT ANNUITY IS A RESIDENT;
11 OR
12 (BB) THE OWNER OF THE STRUCTURED SETTLEMENT ANNUITY IS NOT A RESIDENT,
13 BUT THE INSURER THAT ISSUED THE STRUCTURED SETTLEMENT ANNUITY IS DOMI-
14 CILED IN THIS STATE AND THE STATE IN WHICH THE OWNER RESIDES HAS A GUAR-
15 ANTY ENTITY SIMILAR TO THE CORPORATION CREATED BY THIS ARTICLE; AND
16 (II) NEITHER THE PAYEE (OR BENEFICIARY) NOR THE OWNER OF THE STRUC-
17 TURED SETTLEMENT ANNUITY IS ELIGIBLE FOR COVERAGE BY A GUARANTY ENTITY
18 OF THE STATE IN WHICH THE PAYEE (OR BENEFICIARY) OR OWNER RESIDES.
19 (b) This article shall not apply to:
20 (1) [That] THAT portion or part of a variable life insurance policy,
21 variable annuity contract or variable funding agreement not guaranteed
22 by an insurer;
23 (2) [That] THAT portion or part of any policy, contract or agreement
24 under which the risk is borne by the holder thereof;
25 (3) [Any] ANY policy, contract, or agreement, or part thereof, assumed
26 by the impaired or insolvent insurer under a contract of reinsurance,
27 other than reinsurance for which assumption certificates have been
28 issued;
29 (4) [Any] ANY policy, contract, or agreement issued by or through the
30 facilities of the New York Insurance Exchange, Inc., or any similar
31 entity, or pursuant to article sixty-three of this chapter;
32 (5) [Any] ANY policy, contract, or agreement issued or issued for
33 delivery outside the United States, to the extent it covers persons not
34 citizens or permanent residents of the United States; and
35 (6) [Any] ANY policy, contract, or agreement payable other than in
36 United States dollars.
37 (C) THIS ARTICLE SHALL NOT APPLY TO A PERSON:
38 (1) WHO IS A PAYEE, OR THE BENEFICIARY OF A PAYEE IF THE PAYEE IS
39 DECEASED, OF AN OWNER RESIDENT IF THE PAYEE (OR BENEFICIARY) IS AFFORDED
40 ANY COVERAGE BY A GUARANTY ENTITY OF ANOTHER STATE; OR
41 (2) COVERED UNDER SUBPARAGRAPH (A) OF PARAGRAPH THREE OF SUBSECTION
42 (A) OF THIS SECTION IF THE GUARANTY ENTITY OF ANOTHER STATE PROVIDES ANY
43 COVERAGE TO THE PERSON.
44 S 3. Subsections (d), (h), (j), and (k) of section 7705 of the insur-
45 ance law, as added by chapter 802 of the laws of 1985, are amended and a
46 new subsection (l) is added to read as follows:
47 (d) "Covered policy" means any of the kinds of insurance specified in
48 paragraph one, two or three of subsection (a) of section one thousand
49 one hundred thirteen of this chapter, ANY SUPPLEMENTAL CONTRACT, or any
50 funding agreement referred to in section three thousand two hundred
51 twenty-two of this chapter, or any portion or part thereof, within the
52 scope of this article under section seven thousand seven hundred three
53 of this article, except that any certificate issued to an individual
54 under any group policy or contract shall be considered to be a separate
55 covered policy for purposes of section seven thousand seven hundred
56 eight of this article.
A. 9915 4
1 (h) "Member insurer" means any life insurance company licensed to
2 transact in this state any kind of insurance to which this article
3 applies under section seven thousand seven hundred three of this arti-
4 cle[. Solely for purposes of subsections (f) and (g) of this section,];
5 PROVIDED, HOWEVER, THAT the term "member insurer" [shall] also [mean]
6 MEANS any life insurance company formerly licensed to transact in this
7 state any kind of insurance to which this article applies under section
8 seven thousand seven hundred three of this article.
9 (j) "Person" means any individual OR LEGAL ENTITY, INCLUDING A corpo-
10 ration, partnership, association, LIMITED LIABILITY COMPANY, TRUST, or
11 voluntary organization.
12 (k) "Resident" means [any] A person to whom A contractual [obligations
13 are] OBLIGATION IS owed and who either: (1) resides in this state [at
14 the time] ON THE DATE OF ENTRY OF A COURT ORDER OF LIQUIDATION OR REHA-
15 BILITATION WITH RESPECT TO a member insurer [is determined to be] THAT
16 IS an impaired or insolvent insurer[,]; or (2) resided in this state at
17 the time a member insurer issued a covered policy to such person.
18 (L) "SUPPLEMENTAL CONTRACT" MEANS AN AGREEMENT OR ANY OTHER MECHANISM
19 FOR THE DISTRIBUTION OF PROCEEDS UNDER A LIFE INSURANCE POLICY, HEALTH
20 INSURANCE POLICY, ANNUITY CONTRACT, OR FUNDING AGREEMENT.
21 S 4. Subsections (a) and (b) of section 7708 of the insurance law, as
22 added by chapter 802 of the laws of 1985, are amended to read as
23 follows:
24 (a) (1) If a domestic insurer is an impaired or insolvent insurer, the
25 corporation shall, with the approval of the superintendent:
26 [(1)] (A) guarantee, assume, or reinsure, or cause to be guaranteed,
27 assumed, or reinsured, the covered policies [of residents], or arrange
28 for replacement by policies found by the superintendent to be substan-
29 tially similar to such covered policies;
30 [(2)] (B) assure payment of the contractual obligations of the
31 impaired or insolvent insurer [to residents]; and
32 [(3)] (C) provide such moneys, pledges, notes, guarantees or other
33 means as are reasonably necessary to discharge such duties.
34 (2) The aggregate liability of the corporation under this subsection
35 shall not exceed five hundred thousand dollars for all benefits, includ-
36 ing cash values, with respect to any one life or, to the extent benefits
37 are not allocated pursuant to a covered policy to any one life, to any
38 one covered policy; provided, however, [(i)] that (A) the foregoing
39 limitation shall not apply to any group or blanket accident or health
40 insurance or accident and health insurance policy; and [(ii) that] (B)
41 the corporation shall be liable under this subsection in an amount not
42 to exceed one million dollars for all benefits, including cash values,
43 with respect to any group annuity contract (or portion of any such
44 contract) that does not guarantee annuity benefits with respect to any
45 specific individual identified in the contract and with respect to any
46 funding agreement issued to fund benefits under any employee benefit
47 plan.
48 (b) (1) If a foreign or alien insurer is an impaired or insolvent
49 insurer, the corporation shall, with the approval of the superintendent:
50 [(1)] (A) guarantee, assume, or reinsure or cause to be guaranteed,
51 assumed, or reinsured the covered policies [of residents], or arrange
52 for replacement by policies found by the superintendent to be substan-
53 tially similar to such covered policies;
54 [(2)] (B) assure payment of the contractual obligations of the insol-
55 vent insurer [to residents]; and
A. 9915 5
1 [(3)] (C) provide such moneys, pledges, notes, guarantees, or other
2 means as are reasonably necessary to discharge such duties.
3 (2) The aggregate liability of the corporation under this subsection
4 shall be the excess over any amount that the superintendent determines
5 to be the statutory obligation of the guaranty corporation or associ-
6 ation of the foreign or alien insurer's state of domicile or state of
7 entry, but in no event shall the corporation's liability, when added to
8 the amount so determined to be available from such other guaranty corpo-
9 ration or association, exceed five hundred thousand dollars for all
10 benefits, including cash values, with respect to any one life, or, to
11 the extent benefits are not allocated pursuant to a covered policy to
12 any one life, to any one covered policy; provided, however, [(i)] that
13 the (A) foregoing five hundred thousand dollar limitation shall not
14 apply to any group or blanket accident or health insurance or accident
15 and health insurance policy; and [(ii) that the] (B) liability of all
16 such guaranty corporations or associations may in the aggregate equal,
17 but shall not exceed one million dollars for all benefits, including
18 cash values, with respect to any group annuity contract (or portion of
19 any such contract) that does not guarantee annuity benefits with respect
20 to any specific individual identified in the contract and with respect
21 to any funding agreement issued to fund benefits under any employee
22 benefit plan.
23 S 5. Subsection (h) of section 7708 of the insurance law, as added by
24 chapter 802 of the laws of 1985, is amended to read as follows:
25 (h) The corporation may:
26 (1) [Enter] ENTER into such contracts as are necessary or proper to
27 carry out the provisions and purposes of this article[.];
28 (2) [Sue] SUE or be sued, including taking any legal actions necessary
29 or proper for recovery of any unpaid assessments under section seven
30 thousand seven hundred nine of this article[.];
31 (3) [Borrow] BORROW money to effect the purposes of this article[.
32 The], PROVIDED, HOWEVER, THAT THE corporation may agree, as a condition
33 of any borrowing, that the lender will be subrogated to the rights of
34 the corporation against the impaired or insolvent insurer to the extent
35 of the amount borrowed and interest accruing thereon[. Any], AND
36 PROVIDED FURTHER THAT ANY note or other evidence of indebtedness of the
37 corporation not in default shall be a legal investment for domestic
38 insurers and may be carried as admitted assets[.];
39 (4) [Employ] EMPLOY or retain such persons as are necessary or proper
40 to handle the financial transactions of the corporation, and to perform
41 such other functions as become necessary or proper under this
42 article[.];
43 (5) [With] WITH the approval of the superintendent, negotiate and
44 contract with any liquidator, rehabilitator, conservator or ancillary
45 receiver to carry out the powers and duties of the corporation[.];
46 (6) [Take] TAKE such legal action as may be necessary to avoid payment
47 of improper claims[.];
48 (7) [Exercise] EXERCISE, for the purposes of this article and to the
49 extent approved by the superintendent, the powers of a domestic life
50 insurance company, but in no case may the corporation issue insurance
51 policies or annuity contracts other than those issued to perform the
52 contractual obligations of the impaired or insolvent insurer[.];
53 (8) [Exercise] FUND A RESOLUTION FACILITY ESTABLISHED PURSUANT TO
54 SECTION SEVEN THOUSAND SEVEN HUNDRED NINETEEN OF THIS ARTICLE; AND
55 (9) EXERCISE all powers necessary or convenient for the purposes of
56 this article.
A. 9915 6
1 S 6. Paragraph 1 of subsection (e) of section 7709 of the insurance
2 law, as amended by chapter 217 of the laws of 2012, is amended to read
3 as follows:
4 (1) [The total assessment against all member insurers for all impair-
5 ments and insolvencies, less the amount of refunds (not including inter-
6 est) to member insurers pursuant to subsection (f) of this section,
7 shall not exceed five hundred million dollars, except that with] WITH
8 respect to a member insurer that is a domestic insurer and is subject to
9 an order of rehabilitation under article seventy-four of this chapter as
10 of March first, two thousand twelve, [such] THE TOTAL assessment [limit]
11 AGAINST ALL MEMBER INSURERS FOR IMPAIRMENTS AND INSOLVENCIES, LESS THE
12 AMOUNT OF REFUNDS (NOT INCLUDING INTEREST) TO MEMBER INSURERS PURSUANT
13 TO SUBSECTION (F) OF THIS SECTION, shall be five hundred fifty-eight
14 million dollars; provided, however, that such five hundred fifty-eight
15 million dollar [limit] TOTAL shall be subject to reduction in an amount,
16 if any, determined by the superintendent, on a date not earlier than
17 twelve months after the entry of an order of liquidation with respect to
18 such domestic insurer, to be not needed for the corporation to be able
19 to pay its obligations and reasonable expenses in connection with the
20 liquidation of such domestic insurer, but in no event shall such
21 reduction exceed fifty-eight million dollars.
22 S 7. The insurance law is amended by adding a new section 7719 to read
23 as follows:
24 S 7719. RESOLUTION FACILITY. (A) THE CORPORATION MAY INCORPORATE ONE
25 OR MORE NOT-FOR-PROFIT CORPORATIONS, KNOWN AS A RESOLUTION FACILITY, IN
26 CONNECTION WITH THE LIQUIDATION OF AN INSOLVENT DOMESTIC LIFE INSURANCE
27 COMPANY UNDER ARTICLE SEVENTY-FOUR OF THIS CHAPTER FOR THE PURPOSE OF
28 ADMINISTERING AND DISPOSING OF THE BUSINESS OF THE INSOLVENT DOMESTIC
29 LIFE INSURANCE COMPANY.
30 (B) TO THE EXTENT THAT THE PROVISIONS OF THE NOT-FOR-PROFIT CORPO-
31 RATION LAW DO NOT CONFLICT WITH THE PROVISIONS OF THIS SECTION OR THE
32 PLAN OF OPERATION OF THE RESOLUTION FACILITY HEREUNDER, THE NOT-FOR-PRO-
33 FIT CORPORATION LAW SHALL APPLY TO THE RESOLUTION FACILITY AND THE
34 RESOLUTION FACILITY SHALL BE A NON-CHARITABLE CORPORATION PURSUANT TO
35 THE NOT-FOR-PROFIT CORPORATION LAW. IF AN APPLICABLE PROVISION OF THIS
36 SECTION OR THE PLAN OF OPERATION OF THE RESOLUTION FACILITY HEREUNDER
37 RELATES TO A MATTER EMBRACED IN A PROVISION OF THE NOT-FOR-PROFIT CORPO-
38 RATION LAW BUT IS NOT IN CONFLICT THEREWITH, THEN BOTH PROVISIONS SHALL
39 APPLY. THE CORPORATION SHALL BE A MEMBER OF THE RESOLUTION FACILITY, AND
40 OTHER PERSONS, INCLUDING THE LIFE INSURANCE GUARANTY CORPORATION CONTIN-
41 UED UNDER ARTICLE SEVENTY-FIVE OF THIS CHAPTER AND GUARANTY ENTITIES OF
42 OTHER STATES, MAY BECOME MEMBERS OF THE RESOLUTION FACILITY IN ACCORD-
43 ANCE WITH THE RESOLUTION FACILITY'S CERTIFICATE OF INCORPORATION AND
44 PLAN OF OPERATION.
45 (C) IN ADDITION TO ITS CERTIFICATE OF INCORPORATION, A RESOLUTION
46 FACILITY SHALL SUBMIT TO THE SUPERINTENDENT A PLAN OF OPERATION, AND
47 AMENDMENTS THERETO, NECESSARY OR SUITABLE TO ASSURE THE FAIR, REASON-
48 ABLE, AND EQUITABLE ADMINISTRATION OF THE RESOLUTION FACILITY. THE PLAN
49 OF OPERATION, AND ANY AMENDMENTS THERETO, SHALL BECOME EFFECTIVE UPON
50 APPROVAL IN WRITING BY THE SUPERINTENDENT. THE PLAN OF OPERATION SHALL
51 CONSTITUTE THE BYLAWS OF THE RESOLUTION FACILITY.
52 (D) A RESOLUTION FACILITY MAY:
53 (1) GUARANTEE, ASSUME, OR REINSURE, OR CAUSE TO BE GUARANTEED,
54 ASSUMED, OR REINSURED, THE COVERED POLICIES, OR ARRANGE FOR REPLACEMENT
55 BY POLICIES FOUND BY THE SUPERINTENDENT TO BE SUBSTANTIALLY SIMILAR TO
56 THE COVERED POLICIES;
A. 9915 7
1 (2) EXERCISE, FOR THE PURPOSES OF THIS ARTICLE AND TO THE EXTENT
2 APPROVED BY THE SUPERINTENDENT, THE POWERS OF A DOMESTIC LIFE INSURANCE
3 COMPANY, BUT IN NO CASE MAY THE RESOLUTION FACILITY ISSUE INSURANCE
4 POLICIES, ANNUITY CONTRACTS, FUNDING AGREEMENTS, OR SUPPLEMENTAL
5 CONTRACTS OTHER THAN THOSE ISSUED TO PERFORM THE CONTRACTUAL OBLIGATIONS
6 OF THE IMPAIRED OR INSOLVENT INSURER;
7 (3) ASSURE PAYMENT OF THE CONTRACTUAL OBLIGATIONS OF THE INSOLVENT
8 INSURER; AND
9 (4) PROVIDE SUCH MONEYS, PLEDGES, NOTES, GUARANTEES, OR OTHER MEANS AS
10 ARE REASONABLY NECESSARY TO DISCHARGE ITS DUTIES.
11 (E) A RESOLUTION FACILITY SHALL NOT BE SUBJECT TO ANY PROVISIONS OF
12 THIS CHAPTER OR THE FINANCIAL SERVICES LAW EXCEPT:
13 (1) THIS SECTION; AND
14 (2) SECTIONS SEVEN THOUSAND SEVEN HUNDRED FOURTEEN, SEVEN THOUSAND
15 SEVEN HUNDRED FIFTEEN, AND SEVEN THOUSAND SEVEN HUNDRED SIXTEEN OF THIS
16 ARTICLE, WHICH SHALL APPLY IN THE SAME MANNER AS THEY APPLY TO THE
17 CORPORATION.
18 (F) NOTWITHSTANDING SUBSECTION (E) OF THIS SECTION, THE SUPERINTENDENT
19 MAY ADDRESS TO THE RESOLUTION FACILITY ANY INQUIRY IN RELATION TO ITS
20 TRANSACTIONS OR CONDITION OR ANY MATTER CONNECTED THEREWITH PURSUANT TO
21 SECTION THREE HUNDRED EIGHT OF THIS CHAPTER.
22 (G) (1) IF THE SUPERINTENDENT DETERMINES THAT THE RESOLUTION FACILITY
23 IS NOT ADMINISTERING AND DISPOSING OF THE BUSINESS OF AN INSOLVENT
24 DOMESTIC LIFE INSURANCE COMPANY CONSISTENT WITH THE RESOLUTION FACILI-
25 TY'S CERTIFICATE OF INCORPORATION, PLAN OF OPERATION, OR THIS SECTION,
26 THEN THE SUPERINTENDENT SHALL PROVIDE NOTICE TO THE RESOLUTION FACILITY
27 AND THE RESOLUTION FACILITY SHALL HAVE THIRTY DAYS TO RESPOND TO THE
28 SUPERINTENDENT AND CURE THE DEFECT.
29 (2) IF, AFTER THIRTY DAYS, THE SUPERINTENDENT CONTINUES TO BELIEVE
30 THAT THE RESOLUTION FACILITY IS NOT ADMINISTERING AND DISPOSING OF THE
31 BUSINESS OF AN INSOLVENT DOMESTIC LIFE INSURANCE COMPANY CONSISTENT WITH
32 THE RESOLUTION FACILITY'S CERTIFICATE OF INCORPORATION, PLAN OF OPERA-
33 TION, OR THIS SECTION, THEN THE SUPERINTENDENT MAY APPLY TO THE COURT
34 FOR AN ORDER DIRECTING THE RESOLUTION FACILITY TO CORRECT THE DEFECT OR
35 TAKE OTHER APPROPRIATE ACTIONS.
36 S 8. Section 1108 of the insurance law is amended by adding a new
37 subsection (n) to read as follows:
38 (N) A RESOLUTION FACILITY ESTABLISHED PURSUANT TO SECTION SEVEN THOU-
39 SAND SEVEN HUNDRED NINETEEN OF THIS CHAPTER.
40 S 9. Subsection (f) of section 7503 of the insurance law is amended to
41 read as follows:
42 (f) The corporation shall have the power:
43 (1) [To] TO use a corporate seal, to contract, to sue and be sued and
44 to possess and exercise all powers necessary or convenient for the
45 purposes of this article[.];
46 (2) [With] WITH the approval of the superintendent, to assume, rein-
47 sure or guaranty, or cause to be assumed, reinsured or guaranteed,
48 partially or wholly, any or all policies or contracts of any member
49 company and to make available from the fund such sums as may be neces-
50 sary for such purposes[.];
51 (3) [To] TO carry out the provisions of this article, the corporation
52 shall have and may exercise all necessary rights, powers, privileges and
53 franchises of a domestic life insurance company except that it shall not
54 be authorized to issue contracts or policies unless they replace
55 contracts or policies representing obligations in whole or in part of
56 another domestic life insurance company or of the corporation[.];
A. 9915 8
1 (4) [To] TO borrow money for the purposes of the fund with or without
2 security and pledge such assets in the fund as security for such loans
3 and in connection therewith to rehypothecate any securities or collat-
4 eral pledged to it by a company[. Obligations], PROVIDED, HOWEVER, THAT
5 OBLIGATIONS of the corporation shall be legal investments for domestic
6 life insurance companies and to the extent authorized by the superinten-
7 dent may be carried as admitted assets[.];
8 (5) [To] TO collect, or enforce by legal proceedings, if necessary,
9 the payment of, all assessments for which any contributor may be liable
10 under this article; to collect any obligation due to the corporation or
11 to the fund[.]; AND
12 (6) TO FUND A RESOLUTION FACILITY ESTABLISHED PURSUANT TO SECTION
13 SEVEN THOUSAND SEVEN HUNDRED NINETEEN OF THIS CHAPTER.
14 S 10. This act shall take effect immediately.
