Bill Text: NY S04329 | 2013-2014 | General Assembly | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relates to providing for increased efficiency for certain insurance regulations.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-06-20 - SUBSTITUTED BY A7807A [S04329 Detail]
Download: New_York-2013-S04329-Introduced.html
Bill Title: Relates to providing for increased efficiency for certain insurance regulations.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-06-20 - SUBSTITUTED BY A7807A [S04329 Detail]
Download: New_York-2013-S04329-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
4329
2013-2014 Regular Sessions
I N S E N A T E
March 21, 2013
___________
Introduced by Sen. SEWARD -- (at request of the Department of Financial
Services) -- 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 enhancing regulatory
efficiency and efficacy
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 section 302 to
2 read as follows:
3 S 302. SUPERVISORY COLLEGES. (A) THE SUPERINTENDENT MAY PARTICIPATE IN
4 A SUPERVISORY COLLEGE IN ORDER TO DETERMINE COMPLIANCE WITH THIS CHAPTER
5 WITH RESPECT TO AN INSURER THAT IS REGISTERED UNDER ARTICLE FIFTEEN,
6 SIXTEEN, OR SEVENTEEN OF THIS CHAPTER AND HAS INTERNATIONAL OPERATIONS.
7 THE POWERS OF THE SUPERINTENDENT WITH RESPECT TO SUPERVISORY COLLEGES
8 INCLUDE:
9 (1) INITIATING THE ESTABLISHMENT OF A SUPERVISORY COLLEGE;
10 (2) CLARIFYING THE MEMBERSHIP AND PARTICIPATION OF OTHER SUPERVISORS
11 IN THE SUPERVISORY COLLEGE;
12 (3) CLARIFYING THE FUNCTIONS OF THE SUPERVISORY COLLEGE AND THE ROLE
13 OF OTHER REGULATORS, INCLUDING THE ESTABLISHMENT OF A GROUP-WIDE SUPER-
14 VISOR;
15 (4) COORDINATING THE ONGOING ACTIVITIES OF THE SUPERVISORY COLLEGE,
16 INCLUDING PLANNING MEETINGS, SUPERVISORY ACTIVITIES, AND PROCESSES FOR
17 INFORMATION SHARING; AND
18 (5) ESTABLISHING A CRISIS MANAGEMENT PLAN.
19 (B) EACH INSURER REGISTERED UNDER ARTICLE FIFTEEN, SIXTEEN, OR SEVEN-
20 TEEN OF THIS CHAPTER SHALL BE LIABLE FOR AND SHALL PAY THE REASONABLE
21 EXPENSES OF THE SUPERINTENDENT'S PARTICIPATION IN A SUPERVISORY COLLEGE,
22 INCLUDING REASONABLE TRAVEL EXPENSES. A SUPERVISORY COLLEGE MAY BE
23 CONVENED AS EITHER A TEMPORARY OR PERMANENT FORUM FOR THE COMMUNICATION
24 AND COOPERATION BETWEEN THE REGULATORS CHARGED WITH THE SUPERVISION OF
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09114-04-3
S. 4329 2
1 THE INSURER OR ITS PARENT, AFFILIATES, OR SUBSIDIARIES. THE SUPERINTEN-
2 DENT MAY ESTABLISH A REGULAR ASSESSMENT TO THE INSURER FOR THE PAYMENT
3 OF THESE EXPENSES.
4 (C) IN ORDER TO ASSESS THE BUSINESS STRATEGY, FINANCIAL POSITION,
5 LEGAL AND REGULATORY POSITION, RISK EXPOSURE, RISK MANAGEMENT AND GOVER-
6 NANCE PROCESSES, AND AS PART OF THE EXAMINATION OF INDIVIDUAL INSURERS,
7 THE SUPERINTENDENT MAY PARTICIPATE IN A SUPERVISORY COLLEGE WITH OTHER
8 REGULATORS CHARGED WITH SUPERVISION OF THE INSURER OR ITS PARENT, AFFIL-
9 IATES, OR SUBSIDIARIES, INCLUDING OTHER STATE, FEDERAL, AND INTERNA-
10 TIONAL REGULATORY AGENCIES. THE SUPERINTENDENT MAY ENTER INTO AGREEMENTS
11 PURSUANT TO SECTION ONE HUNDRED TEN OF THIS CHAPTER PROVIDING THE BASIS
12 FOR COOPERATION BETWEEN THE SUPERINTENDENT AND OTHER REGULATORY AGENCIES
13 AND FOR THE ACTIVITIES OF THE SUPERVISORY COLLEGE. NOTHING IN THIS
14 SECTION SHALL DELEGATE TO THE SUPERVISORY COLLEGE THE SUPERINTENDENT'S
15 AUTHORITY TO REGULATE OR SUPERVISE THE INSURER OR ITS PARENT, AFFIL-
16 IATES, OR SUBSIDIARIES WITHIN THE SUPERINTENDENT'S JURISDICTION.
17 S 2. Section 1503 of the insurance law is amended to read as follows:
18 S 1503. Registration. [(a)] Every person who becomes a controlled
19 insurer shall, within thirty days thereafter register with the super-
20 intendent and [such] SHALL AMEND THE registration [shall be amended]
21 within thirty days following any change in the identity of its holding
22 company OR ANY OTHER MATERIAL CHANGE TO THE INFORMATION PROVIDED IN THE
23 REGISTRATION. THE REGISTRATION SHALL BE IN SUCH FORM AND SHALL CONTAIN
24 SUCH MATTERS AS THE SUPERINTENDENT PRESCRIBES. The superintendent may
25 grant reasonable extensions of the time to register.
26 [(b) Every registrant shall furnish the superintendent with the
27 following information concerning its holding company:
28 (1) a copy of its charter or articles of incorporation and by-laws;
29 (2) the identities of its principal shareholders, officers, directors
30 and controlled persons; and
31 (3) information as to its capital structure and financial condition,
32 and a description of its principal business activities.]
33 S 3. Subsection (d) of section 1505 of the insurance law is amended to
34 read as follows:
35 (d) The following transactions between a domestic controlled insurer
36 and any person in its holding company system may not be entered into
37 unless the insurer has notified the superintendent in writing of its
38 intention to enter into any such transaction at least thirty days prior
39 thereto, OR WITH REGARD TO REINSURANCE TREATIES OR AGREEMENTS AT LEAST
40 SIXTY DAYS PRIOR THERETO, or such shorter period as [he] THE SUPERINTEN-
41 DENT may permit, and [he] THE SUPERINTENDENT has not disapproved it
42 within such period:
43 (1) sales, purchases, exchanges, loans or extensions of credit, or
44 investments[,] involving [more than one-half of one percent but] less
45 than five percent of the insurer's admitted assets at last year-end,
46 PROVIDED THE TRANSACTIONS ARE EQUAL TO OR EXCEED:
47 (A) THE LESSER OF THREE PERCENT OF THE INSURER'S ADMITTED ASSETS OR
48 TWENTY-FIVE PERCENT OF CAPITAL AND SURPLUS AT LAST YEAR-END, WITH REGARD
49 TO AN ACCIDENT AND HEALTH INSURANCE COMPANY OR A CORPORATION SUBJECT TO
50 ARTICLE FORTY-THREE OF THIS CHAPTER;
51 (B) THREE PERCENT OF THE INSURER'S ADMITTED ASSETS AT LAST YEAR-END,
52 WITH REGARD TO A LIFE INSURANCE COMPANY; OR
53 (C) THE LESSER OF THREE PERCENT OF THE INSURER'S ADMITTED ASSETS OR
54 TWENTY-FIVE PERCENT OF SURPLUS TO POLICYHOLDERS AT LAST YEAR-END, WITH
55 REGARD TO AN INSURER OTHER THAN AS SPECIFIED IN SUBPARAGRAPHS (A) AND
56 (B) OF THIS PARAGRAPH;
S. 4329 3
1 (2) reinsurance treaties or agreements;
2 (3) rendering of services on a regular or systematic basis; or
3 (4) any material transaction, specified by regulation, [which] THAT
4 the superintendent determines may adversely affect the interests of the
5 insurer's policyholders or shareholders.
6 Nothing herein contained shall be deemed to authorize or permit any
7 transaction [which] THAT, in the case of a non-controlled insurer, would
8 be otherwise contrary to law.
9 S 4. Section 1506 of the insurance law is amended by adding a new
10 subsection (f) to read as follows:
11 (F) ANY HOLDING COMPANY SEEKING TO DIVEST ITS CONTROLLING INTEREST IN
12 A DOMESTIC INSURER, IN ANY MANNER, SHALL FILE WITH THE SUPERINTENDENT,
13 WITH A COPY TO THE INSURER, NOTICE OF ITS PROPOSED DIVESTITURE AT LEAST
14 THIRTY DAYS PRIOR TO THE CESSATION OF CONTROL.
15 S 5. Section 1603 of the insurance law is amended to read as follows:
16 S 1603. Notice of intent to acquire OR DIVEST. (a) [No acquisition of
17 a majority of any corporation's outstanding common shares shall be made
18 pursuant to this article] A DOMESTIC INSURER SHALL NOT ACQUIRE CONTROL
19 OF ANY OTHER DOMESTIC INSURER, WHETHER BY PURCHASE OF ITS SECURITIES OR
20 OTHERWISE, unless:
21 (1) a notice of intention of such proposed acquisition shall have been
22 filed with the superintendent not less than ninety days, or such shorter
23 period as may be permitted by the superintendent, in advance of such
24 proposed acquisition[, nor shall any such acquisition be made if the
25 superintendent at any time prior thereto finds]; AND
26 (2) THE INSURER RECEIVES THE SUPERINTENDENT'S PRIOR APPROVAL.
27 (B) THE SUPERINTENDENT SHALL DISAPPROVE SUCH ACQUISITION IF THE SUPER-
28 INTENDENT DETERMINES that the proposed acquisition is contrary to law or
29 determines that such proposed acquisition would be contrary to the best
30 interests of the parent insurer's policyholders or of the people of this
31 state. Only the following factors shall be considered in making the
32 foregoing determination:
33 (1) the availability of the funds or assets required for such acquisi-
34 tion;
35 (2) the fairness of any exchange of shares, assets, cash or other
36 consideration for the shares or assets to be received;
37 (3) the impact of the new operation on the parent insurer's surplus
38 and existing insurance business and the risks inherent in the parent
39 insurer's investment portfolio and operations;
40 (4) the fairness and adequacy of the financing proposed for the
41 subsidiary;
42 (5) the likelihood of undue concentration of economic power;
43 (6) whether the effect of the acquisition may be substantially to
44 lessen competition in any line of commerce in insurance or to tend to
45 create a monopoly therein; and
46 (7) whether the acquisition might result in an excessive proliferation
47 of subsidiaries [which] THAT would tend to unduly dilute management
48 effectiveness or weaken financial strength, or otherwise be contrary to
49 the best interests of the parent insurer's policyholders or of the
50 people of this state.
51 [(b)] (C) At any time after an acquisition the superintendent may
52 order its disposition if [he] THE SUPERINTENDENT finds, after notice and
53 an opportunity to be heard, that its continued retention is hazardous or
54 prejudicial to the interests of the parent insurer's policyholders.
55 (D) ANY DOMESTIC INSURER SEEKING TO DIVEST ITS CONTROLLING INTEREST IN
56 ANOTHER DOMESTIC INSURER, IN ANY MANNER, SHALL FILE WITH THE SUPERINTEN-
S. 4329 4
1 DENT, WITH A COPY TO THE INSURER, NOTICE OF ITS PROPOSED DIVESTITURE AT
2 LEAST THIRTY DAYS PRIOR TO THE CESSATION OF CONTROL.
3 [(c)] (E) The contents of each notice of intention of a proposed
4 acquisition OR DIVESTITURE filed hereunder and information pertaining
5 thereto shall be kept confidential, shall not be subject to subpoena and
6 shall not be made public unless after notice and opportunity to be heard
7 the superintendent determines that the interests of policyholders,
8 shareholders or the public will be served by publication.
9 S 6. The insurance law is amended by adding a new section 1604 to read
10 as follows:
11 S 1604. REGISTRATION. AN AUTHORIZED DOMESTIC INSURER SHALL REGISTER
12 WITH THE SUPERINTENDENT WITHIN THIRTY DAYS OF BECOMING SUBJECT TO REGIS-
13 TRATION AND SHALL AMEND THE REGISTRATION WITHIN THIRTY DAYS FOLLOWING
14 ANY MATERIAL CHANGE TO THE INFORMATION PROVIDED IN THE REGISTRATION. THE
15 REGISTRATION SHALL BE IN SUCH FORM AND SHALL CONTAIN SUCH MATTERS AS THE
16 SUPERINTENDENT PRESCRIBES. THE SUPERINTENDENT MAY GRANT REASONABLE
17 EXTENSIONS OF THE TIME TO REGISTER.
18 S 7. Section 1608 of the insurance law is amended by adding a new
19 subsection (e) to read as follows:
20 (E) THE FOLLOWING TRANSACTIONS BETWEEN A DOMESTIC INSURER AND ANY
21 SUBSIDIARY MAY NOT BE ENTERED INTO UNLESS THE INSURER HAS NOTIFIED THE
22 SUPERINTENDENT IN WRITING OF ITS INTENTION TO ENTER INTO ANY SUCH TRANS-
23 ACTION AT LEAST THIRTY DAYS PRIOR THERETO, OR WITH REGARD TO REINSURANCE
24 TREATIES OR AGREEMENTS AT LEAST SIXTY DAYS PRIOR THERETO, OR SUCH SHORT-
25 ER PERIOD AS THE SUPERINTENDENT MAY PERMIT, AND THE SUPERINTENDENT HAS
26 NOT DISAPPROVED IT WITHIN SUCH PERIOD:
27 (1) SALES, PURCHASES, EXCHANGES, LOANS, EXTENSIONS OF CREDIT, OR
28 INVESTMENTS WITH A SUBSIDY, PROVIDED THE TRANSACTIONS ARE EQUAL TO OR
29 EXCEED THE LESSER OF THREE PERCENT OF THE INSURER'S ADMITTED ASSETS OR
30 TWENTY-FIVE PERCENT OF SURPLUS TO POLICYHOLDERS AT LAST YEAR-END;
31 (2) LOANS OR EXTENSIONS OF CREDIT TO ANY PERSON WHO IS NOT A SUBSID-
32 IARY, WHERE THE INSURER MAKES LOANS OR EXTENSIONS OF CREDIT WITH THE
33 AGREEMENT OR UNDERSTANDING THAT THE PROCEEDS OF SUCH TRANSACTIONS, IN
34 WHOLE OR IN SUBSTANTIAL PART, ARE TO BE USED TO MAKE LOANS OR EXTENSIONS
35 OF CREDIT TO, PURCHASE ASSETS OF, OR MAKE INVESTMENTS IN, ANY SUBSIDIARY
36 OF THE INSURER MAKING THE LOANS OR EXTENSIONS OF CREDIT, PROVIDED THE
37 TRANSACTIONS ARE EQUAL TO OR EXCEED THE LESSER OF THREE PERCENT OF THE
38 INSURER'S ADMITTED ASSETS OR TWENTY-FIVE PERCENT OF SURPLUS TO POLICY-
39 HOLDERS AT LAST YEAR-END;
40 (3) REINSURANCE TREATIES OR AGREEMENTS WITH A SUBSIDIARY THAT THE
41 INSURER HAS NOT OTHERWISE SUBMITTED TO THE SUPERINTENDENT, PROVIDED,
42 HOWEVER, THE INSURER NEED NOT SUBMIT A COPY OF A REINSURANCE AGREEMENT
43 UNLESS REQUESTED BY THE SUPERINTENDENT WHERE THE REINSURANCE PREMIUM OR
44 A CHANGE IN THE INSURER'S LIABILITIES, OR THE PROJECTED REINSURANCE
45 PREMIUM OR A CHANGE IN THE INSURER'S LIABILITIES IN ANY OF THE NEXT
46 THREE YEARS, IS LESS THAN FIVE PERCENT OF THE INSURER'S SURPLUS TO POLI-
47 CYHOLDERS AT LAST YEAR-END. THIS SHALL INCLUDE AGREEMENTS THAT MAY
48 REQUIRE, AS CONSIDERATION, THE TRANSFER OF ASSETS FROM AN INSURER TO A
49 NON-SUBSIDIARY, IF AN AGREEMENT OR UNDERSTANDING EXISTS BETWEEN THE
50 INSURER AND NON-SUBSIDIARY THAT ANY PORTION OF THE ASSETS WILL BE TRANS-
51 FERRED TO ONE OR MORE SUBSIDIARIES OF THE INSURER; AND
52 (4) MANAGEMENT AGREEMENTS, SERVICE CONTRACTS, TAX ALLOCATION AGREE-
53 MENTS, GUARANTEES, AND ALL COST-SHARING ARRANGEMENTS.
54 S 8. Intentionally omitted.
55 S 9. Section 1702 of the insurance law, as amended by chapter 526 of
56 the laws of 1987, is amended to read as follows:
S. 4329 5
1 S 1702. Meaning of "subsidiary" and "parent corporation"; certain
2 types of subsidiaries defined. As used in this article[, "subsidiary"
3 (i)]: (A) "SUBSIDIARY" means subsidiaries of the types described in
4 subsection (b) of section one thousand seven hundred four of this arti-
5 cle and subsidiaries acquired or held under this article, section one
6 thousand four hundred five or section four thousand two hundred forty of
7 this chapter, but [(ii) does] SHALL not include a subsidiary acquired or
8 held under section one thousand four hundred four of this chapter or a
9 subsidiary acquired or held by an insurer authorized to make investments
10 by subsection (c) of section one thousand four hundred three of this
11 chapter[; and "parent corporation"].
12 (B) "PARENT CORPORATION" means a parent corporation of a type
13 described in subsection (a), (b) or (c) of section one thousand seven
14 hundred one of this article[; "holding company operating subsidiary"].
15 (C) "HOLDING COMPANY OPERATING SUBSIDIARY" means a subsidiary (other
16 than a separate account subsidiary) engaged or organized to engage in
17 either or both of the following activities [(i)](1) the ownership and
18 management of other subsidiaries, and [(ii)](2) the raising of capital
19 (debt or equity) [which] THAT could be loaned to, or invested in, other
20 subsidiaries or loaned to the parent corporation, provided that any such
21 subsidiary may in addition engage in the ownership and management of
22 assets authorized as investments for the parent corporation[; "invest-
23 ment subsidiary"].
24 (D) "INVESTMENT SUBSIDIARY" means a subsidiary (other than a separate
25 account subsidiary) engaged or organized to engage exclusively in the
26 ownership and management of assets (other than equity securities of
27 subsidiaries) authorized as investments for the parent corporation and
28 of other investment subsidiaries[; and "separate account subsidiary"].
29 (E) "SEPARATE ACCOUNT SUBSIDIARY" means a subsidiary acquired or held
30 under section four thousand two hundred forty of this chapter.
31 S 10. Section 1710 of the insurance law, as amended by chapter 805 of
32 the laws of 1984, is amended to read as follows:
33 S 1710. [Superintendent's] DIVESTITURE OF CONTROL; SUPERINTENDENT'S
34 power to order disposition of subsidiaries.
35 (A) ANY PARENT CORPORATION SEEKING TO DIVEST ITS CONTROLLING INTEREST
36 IN A DOMESTIC INSURER, IN ANY MANNER, SHALL FILE WITH THE SUPERINTEN-
37 DENT, WITH A COPY TO THE INSURER, NOTICE OF ITS PROPOSED DIVESTITURE AT
38 LEAST THIRTY DAYS PRIOR TO THE CESSATION OF CONTROL.
39 (B) In addition to the powers granted to the superintendent elsewhere
40 in this chapter (including, without limitation, [sections] SECTION one
41 hundred nine [and three hundred twenty-seven] of this chapter AND
42 SECTION THREE HUNDRED NINE OF THE FINANCIAL SERVICES LAW), the super-
43 intendent may, at any time, order a parent corporation to dispose of any
44 subsidiary, if the superintendent finds, after notice and an opportunity
45 to be heard, either:
46 [(i)](1) that its acquisition or continued retention is or was not
47 permitted by the provisions of this article; or
48 [(ii)](2) except in the case of a subsidiary then exempted by the
49 provisions of subsection (a) or (b) of section one thousand seven
50 hundred four of this article, that its continued retention is materially
51 adverse to the interests of the parent corporation's policyholders or
52 subscribers.
53 S 11. Section 1712 of the insurance law is amended to read as follows:
54 S 1712. Relationships and transactions between parent corporation and
55 subsidiary. (A) The business operations, corporate proceedings and
56 fiscal and accounting records of subsidiaries shall be conducted or
S. 4329 6
1 maintained so as to assure the separate legal and operating identities
2 of the parent corporation and subsidiary, but nothing herein shall
3 preclude arrangements for common management or the cooperative or joint
4 use of personnel, property, or services, otherwise consistent with this
5 chapter. All transactions between the parent corporation and its subsid-
6 iaries shall be fair and equitable, charges or fees for services
7 performed shall be reasonable and all expenses incurred and payments
8 received shall be allocated to the parent corporation on an equitable
9 basis in conformity with customary insurance accounting practices
10 consistently applied. The books, accounts and records of each party to
11 all such transactions shall be so maintained as to disclose clearly and
12 accurately the nature and details of the transactions, including such
13 accounting information as is necessary to support the reasonableness of
14 the charges or fees to the respective parties.
15 (B) THE FOLLOWING TRANSACTIONS BETWEEN A PARENT CORPORATION AND ANY
16 SUBSIDIARY MAY NOT BE ENTERED INTO UNLESS THE PARENT CORPORATION HAS
17 NOTIFIED THE SUPERINTENDENT IN WRITING OF ITS INTENTION TO ENTER INTO
18 ANY SUCH TRANSACTION AT LEAST THIRTY DAYS PRIOR THERETO, OR WITH REGARD
19 TO REINSURANCE TREATIES OR AGREEMENTS AT LEAST SIXTY DAYS PRIOR THERETO,
20 OR SUCH SHORTER PERIOD AS THE SUPERINTENDENT MAY PERMIT, AND THE SUPER-
21 INTENDENT HAS NOT DISAPPROVED IT WITHIN SUCH PERIOD:
22 (1) SALES, PURCHASES, EXCHANGES, LOANS, EXTENSIONS OF CREDIT, OR
23 INVESTMENTS WITH A SUBSIDY, PROVIDED THE TRANSACTIONS ARE EQUAL TO OR
24 EXCEED:
25 (A) THREE PERCENT OF THE PARENT CORPORATION'S ADMITTED ASSETS AT LAST
26 YEAR-END, WITH REGARD TO A DOMESTIC LIFE INSURANCE COMPANY; OR
27 (B) THE LESSER OF THREE PERCENT OF THE PARENT CORPORATION'S ADMITTED
28 ASSETS OR TWENTY-FIVE PERCENT OF CAPITAL AND SURPLUS AT LAST YEAR-END,
29 WITH REGARD TO A DOMESTIC CORPORATION SUBJECT TO ARTICLE FORTY-THREE OF
30 THIS CHAPTER; OR
31 (2) LOANS OR EXTENSIONS OF CREDIT TO ANY PERSON WHO IS NOT A SUBSID-
32 IARY, WHERE THE PARENT CORPORATION MAKES LOANS OR EXTENSIONS OF CREDIT
33 WITH THE AGREEMENT OR UNDERSTANDING THAT THE PROCEEDS OF SUCH TRANS-
34 ACTIONS, IN WHOLE OR IN SUBSTANTIAL PART, ARE TO BE USED TO MAKE LOANS
35 OR EXTENSIONS OF CREDIT TO, PURCHASE ASSETS OF, OR MAKE INVESTMENTS IN,
36 ANY SUBSIDIARY OF THE PARENT CORPORATION MAKING THE LOANS OR EXTENSIONS
37 OF CREDIT, PROVIDED THE TRANSACTIONS ARE EQUAL TO OR EXCEED:
38 (A) THREE PERCENT OF THE PARENT CORPORATION'S ADMITTED ASSETS AT LAST
39 YEAR-END, WITH REGARD TO A DOMESTIC LIFE INSURANCE COMPANY; OR
40 (B) THE LESSER OF THREE PERCENT OF THE PARENT CORPORATION'S ADMITTED
41 ASSETS OR TWENTY-FIVE PERCENT OF CAPITAL AND SURPLUS AT LAST YEAR-END,
42 WITH REGARD TO A DOMESTIC CORPORATION SUBJECT TO ARTICLE FORTY-THREE OF
43 THIS CHAPTER; OR
44 (3) REINSURANCE TREATIES OR AGREEMENTS WITH A SUBSIDIARY THAT THE
45 PARENT CORPORATION HAS NOT OTHERWISE SUBMITTED TO THE SUPERINTENDENT.
46 THIS SHALL INCLUDE AGREEMENTS THAT MAY REQUIRE, AS CONSIDERATION, THE
47 TRANSFER OF ASSETS FROM A PARENT CORPORATION TO A NON-SUBSIDIARY, IF AN
48 AGREEMENT OR UNDERSTANDING EXISTS BETWEEN THE PARENT CORPORATION AND
49 NON-SUBSIDIARY THAT ANY PORTION OF THE ASSETS WILL BE TRANSFERRED TO ONE
50 OR MORE SUBSIDIARIES OF THE PARENT CORPORATION; AND
51 (4) MANAGEMENT AGREEMENTS, SERVICE CONTRACTS, TAX ALLOCATION AGREE-
52 MENTS, GUARANTEES, AND ALL COST-SHARING ARRANGEMENTS.
53 S 12. The insurance law is amended by adding a new section 1717 to
54 read as follows:
55 S 1717. REGISTRATION. A PARENT CORPORATION SHALL REGISTER WITH THE
56 SUPERINTENDENT WITHIN THIRTY DAYS OF BECOMING SUBJECT TO REGISTRATION
S. 4329 7
1 AND SHALL AMEND THE REGISTRATION WITHIN THIRTY DAYS FOLLOWING ANY MATE-
2 RIAL CHANGE TO THE INFORMATION PROVIDED IN THE REGISTRATION. THE REGIS-
3 TRATION SHALL BE IN SUCH FORM AND SHALL CONTAIN SUCH MATTERS AS THE
4 SUPERINTENDENT PRESCRIBES. THE SUPERINTENDENT MAY GRANT REASONABLE
5 EXTENSIONS OF THE TIME TO REGISTER.
6 S 13. Subsection (d) of section 1110 of the insurance law, as amended
7 by chapter 431 of the laws of 2000, is amended to read as follows:
8 (d) No such corporation or association shall make or issue in this
9 state any annuity contract before obtaining a permit issued in accord-
10 ance with the provisions of this section except that if its requisite
11 reserve on its outstanding annuity agreements computed in accordance
12 with section four thousand two hundred seventeen of this chapter does
13 not exceed the amount of [five hundred thousand] ONE MILLION dollars, it
14 may make gift annuity agreements in this state and shall be exempted
15 from securing a permit provided it maintains the reserve required by
16 section four thousand two hundred seventeen of this chapter and a
17 surplus of at least twenty-five per centum of such reserve. If the
18 superintendent finds, after notice and hearing, that any such corpo-
19 ration or association, having such a permit, has failed to comply with
20 the requirements of this section, [he] THE SUPERINTENDENT may revoke or
21 suspend such permit or order it to cease making new annuity contracts
22 until it complies. The superintendent may, in [his] THE SUPERINTENDENT'S
23 discretion, either dispense with the requirement of annual statements by
24 such corporations or associations or accept a sworn statement by two or
25 more of its principal officers, in such form as will satisfy the super-
26 intendent that the requirements of this section are being complied with.
27 S 14. Section 1110 of the insurance law is amended by adding a new
28 subsection (f) to read as follows:
29 (F) THE SUPERINTENDENT MAY, IN THE SUPERINTENDENT'S DISCRETION, EXAM-
30 INE ANY SUCH CORPORATION OR ASSOCIATION THAT IS EXEMPT FROM OBTAINING A
31 PERMIT PURSUANT TO SUBSECTION (D) OF THIS SECTION.
32 S 15. Paragraph 1 of subsection (a) of section 307 of the insurance
33 law is amended to read as follows:
34 (1) Every insurer and every fraternal benefit society [which] THAT is
35 authorized to do an insurance business in this state, and every pension
36 fund, retirement system or state fund [which] THAT is required, by any
37 law of this state, to report to the superintendent or is subject to
38 [his] THE SUPERINTENDENT'S examination, shall file in the office of the
39 superintendent, annually on or before the first day of March, a state-
40 ment, to be known as its annual statement, executed in duplicate, veri-
41 fied by the oath of at least two of its principal officers, showing its
42 condition at last year-end or, in the case of a pension fund or retire-
43 ment system, on such date in the year next preceding as the superinten-
44 dent may approve. Such statement shall be in such form and shall contain
45 such matters as the superintendent shall prescribe. THE SUPERINTENDENT
46 MAY ACCEPT AN ELECTRONIC FILING OF A FOREIGN INSURER'S ANNUAL STATEMENT
47 THAT DOES NOT CONTAIN THE SIGNATURES OR VERIFICATION OF THE OFFICERS
48 PROVIDED THAT THE FOREIGN INSURER HAS FILED, IN ITS STATE OF DOMICILE,
49 AN ANNUAL STATEMENT VERIFIED BY THE OATH OF AT LEAST TWO OF ITS PRINCI-
50 PAL OFFICERS. IN SUCH A SITUATION, THE OFFICERS OF THE FOREIGN INSURER
51 SHALL BE DEEMED TO HAVE GIVEN THEIR OATH IN THIS STATE.
52 S 16. Subsection (b) of section 7428 of the insurance law is amended
53 to read as follows:
54 (b) If the amount of any such REAL OR PERSONAL PROPERTY OWNED BY, OR
55 debt or claim owed by or to, such insurer does not exceed twenty-five
56 [hundred] THOUSAND dollars, THEN the superintendent may SELL OR DISPOSE
S. 4329 8
1 OF ALL OR ANY PART OF THE REAL OR PERSONAL PROPERTY, OR compromise or
2 compound the [same] DEBT OR CLAIM, upon such terms as [he] THE SUPER-
3 INTENDENT may deem for the best interests of such insurer without
4 obtaining the approval of the court.
5 S 17. Subsection (g) of section 7602 of the insurance law, as amended
6 by chapter 578 of the laws of 1990, is amended to read as follows:
7 (g) "Allowed claim" means a claim [which] THAT has been allowed by the
8 [court] SUPERINTENDENT in a proceeding under article seventy-four of
9 this chapter OR, IF SUCH CLAIM EXCEEDS TWENTY-FIVE THOUSAND DOLLARS, HAS
10 BEEN ALLOWED BY THE COURT IN A PROCEEDING UNDER ARTICLE SEVENTY-FOUR OF
11 THIS CHAPTER, and which is based upon:
12 (1) a policy insuring property or risks located or resident in this
13 state, or
14 (2) a policy issued in this state to a resident of this state insuring
15 property or risks, located or resident outside this state but within the
16 United States, its possessions and territories, and Canada, provided
17 that, with respect to policies covered under this paragraph:
18 (A) irrespective of the amount of claim [which] THAT has been allowed,
19 no person shall recover any amount from this fund until such person has
20 exhausted all rights of recovery from any security fund, guaranty asso-
21 ciation, or the equivalent in the jurisdiction where such property or
22 risks are located or resident; and, thereafter, such person's recovery
23 from this fund, when combined with amounts recovered or recoverable from
24 any other security fund, guaranty association, or the equivalent in such
25 jurisdiction, shall not exceed the maximum limit available to a quali-
26 fied claimant for a recovery solely from such other security fund, guar-
27 anty association, or the equivalent; and
28 (B) the aggregate limit for all claims arising out of any one policy,
29 excluding claims with respect to property or risks located or resident
30 in this state, shall not exceed the lesser of the aggregate limit of the
31 policy or five million dollars.
32 S 18. This act shall take effect immediately, except that sections
33 two, six and twelve of this act shall take effect on the ninetieth day
34 after this act shall have become a law.
