Bill Text: NY S02582 | 2011-2012 | General Assembly | Introduced
Bill Title: Creates the natural disaster reinsurance fund financed through voluntary participation by insurers in the state to provide additional protection in the case of catastrophic events; exempts any amounts deposited into the fund from taxation by the state, county, municipality or local taxing authority; prohibits participating insurers from increasing any premiums based upon payments to such fund.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-01-26 - REFERRED TO INSURANCE [S02582 Detail]
Download: New_York-2011-S02582-Introduced.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 2582 2011-2012 Regular Sessions I N S E N A T E January 26, 2011 ___________ Introduced by Sen. KRUGER -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to creating a state natural disaster reinsurance fund THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. The insurance law is amended by adding a new article 80 to 2 read as follows: 3 ARTICLE 80 4 NATURAL DISASTER REINSURANCE FUND 5 SECTION 8001. PURPOSE. 6 8002. DEFINITIONS. 7 8003. NATURAL DISASTER REINSURANCE FUND. 8 8004. OPERATION OF THE FUND. 9 8005. TAXATION. 10 8006. PROHIBITIONS. 11 S 8001. PURPOSE. THE PURPOSE OF THIS ARTICLE IS TO CREATE THE NATURAL 12 DISASTER REINSURANCE FUND TO BE FINANCED THROUGH VOLUNTARY PARTICIPATION 13 BY INSURERS. THE FUND WILL PROVIDE SUBSCRIBING COMPANIES WITH A POOL OF 14 AVAILABLE FUNDS TO BE ACCESSED WHEN A CATASTROPHIC EVENT RAISES CLAIMS 15 ABOVE A GIVEN LEVEL AND WILL THUS REDUCE THE POTENTIAL FOR INSURANCE 16 COMPANY INSOLVENCIES DUE TO NATURAL DISASTERS AND OTHER CATASTROPHIC 17 EVENTS. 18 S 8002. DEFINITIONS. AS USED IN THIS ARTICLE THE FOLLOWING TERMS SHALL 19 HAVE THE FOLLOWING MEANINGS: 20 (A) "NATURAL DISASTER" OR "CATASTROPHIC EVENT" SHALL MEAN A MAJOR 21 HURRICANE, TORNADO, EARTHQUAKE, TIDAL WAVE, MAJOR FLOOD OR ANY OTHER 22 EVENT DECLARED A DISASTER BY THE GOVERNOR. 23 (B) "FUND" SHALL MEAN THE NATURAL DISASTER REINSURANCE FUND CREATED BY 24 THIS ARTICLE. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06791-01-1 S. 2582 2 1 S 8003. NATURAL DISASTER REINSURANCE FUND. THERE SHALL BE CREATED IN 2 THE CUSTODY OF THE SUPERINTENDENT A NATURAL DISASTER REINSURANCE FUND 3 FINANCED THROUGH VOLUNTARY PARTICIPATION OF INSURERS IN THIS STATE. THE 4 STATE SHALL ESTABLISH AND ADJUST, WHEN NECESSARY, THE RATES FOR THE 5 REINSURANCE COVERAGE USING GENERALLY ACCEPTED ACTUARIAL PRINCIPLES. SUCH 6 FUNDS SHALL BE HELD IN TRUST BY THE STATE AND SHALL BE REMITTED ONLY IN 7 ACCORDANCE WITH THE TERMS OF SECTION EIGHT THOUSAND FOUR OF THIS ARTI- 8 CLE. THE STATE SHALL INVEST A PERCENTAGE OF THE AMOUNTS AS IT DEEMS 9 APPROPRIATE. 10 S 8004. OPERATION OF THE FUND. ANY PARTICIPATING INSURER SHALL BE 11 ELIGIBLE TO MAKE A CLAIM AGAINST THE FUND IF A NATURAL DISASTER, OR 12 SERIES OF NATURAL DISASTERS OCCURRING WITHIN A TWELVE MONTH PERIOD, 13 RESULTS IN CLAIMS EXCEEDING FIFTEEN PERCENT OF THE INDUSTRY'S SURPLUS. 14 CLAIMS SHALL BE PAID IN ACCORDANCE WITH PROCEDURES PROMULGATED BY THE 15 SUPERINTENDENT. 16 S 8005. TAXATION. ANY AMOUNTS DEPOSITED INTO THE FUND ACCOUNT, INCLUD- 17 ING INVESTMENTS MADE PURSUANT TO SECTION EIGHT THOUSAND THREE OF THIS 18 ARTICLE, SHALL BE EXEMPT FROM TAXATION BY THE STATE OR BY ANY COUNTY, 19 MUNICIPALITY OR LOCAL TAXING AUTHORITY. 20 S 8006. PROHIBITIONS. INSURERS PARTICIPATING IN THE FUND SHALL BE 21 PROHIBITED FROM INCREASING ANY PREMIUMS BASED UPON PAYMENTS MADE TO THE 22 FUND. 23 S 2. This act shall take effect January 1, 2012, provided, however, 24 that the superintendent of insurance may promulgate any rules and regu- 25 lations necessary for the timely implementation of this act on or before 26 its effective date.