Bill Text: NY S07320 | 2013-2014 | General Assembly | Amended
Bill Title: Relates to the life insurance company guaranty corporation of New York.
Sponsorship: Partisan Bill (Republican 1)
Status: (Introduced - Dead) 2014-06-18 - SUBSTITUTED BY A9915 [S07320 Detail]
Download: New_York-2013-S07320-Amended.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7320--A
I N S E N A T E
May 12, 2014
___________
Introduced by Sen. SEWARD -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance -- reported
favorably from said committee and committed to the Committee on
Finance -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15111-03-4
S. 7320--A 2
1 THE DATE OF ENTRY OF A COURT ORDER OF LIQUIDATION OR REHABILITATION WITH
2 RESPECT TO SUCH A COMPANY THAT IS an impaired or insolvent insurer, as
3 the case may be.
4 (2) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THIS ARTICLE SHALL
5 APPLY TO THE POLICIES, CONTRACTS, AND FUNDING AGREEMENTS SPECIFIED IN
6 PARAGRAPH ONE OF THIS SUBSECTION WITH REGARD TO A PERSON WHO IS:
7 (A) AN OWNER OR CERTIFICATE HOLDER UNDER A POLICY, CONTRACT, OR FUND-
8 ING AGREEMENT AND IN EACH CASE WHO:
9 (I) IS A RESIDENT; OR
10 (II) IS NOT A RESIDENT, BUT ONLY UNDER ALL OF THE FOLLOWING CONDI-
11 TIONS:
12 (I) THE INSURER THAT ISSUED THE POLICY, CONTRACT, OR AGREEMENT IS
13 DOMICILED IN THIS STATE;
14 (II) THE STATE OR STATES IN WHICH THE PERSON RESIDES HAS OR HAVE A
15 GUARANTY ENTITY SIMILAR TO THE CORPORATION CREATED BY THIS ARTICLE; AND
16 (III) THE PERSON IS NOT ELIGIBLE FOR COVERAGE BY A GUARANTY ENTITY IN
17 ANY OTHER STATE BECAUSE THE INSURER WAS NOT LICENSED OR AUTHORIZED IN
18 THAT STATE AT THE TIME SPECIFIED IN THAT STATE'S GUARANTY ENTITY LAW; OR
19 (B) THE BENEFICIARY, ASSIGNEE, OR PAYEE OF THE PERSON SPECIFIED IN
20 SUBPARAGRAPH (A) OF THIS PARAGRAPH, REGARDLESS OF WHERE THE PERSON
21 RESIDES.
22 (3) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION:
23 (A) WITH REGARD TO A GROUP ANNUITY CONTRACT (OR PORTION OF ANY SUCH
24 CONTRACT) THAT DOES NOT GUARANTEE ANNUITY BENEFITS WITH RESPECT TO ANY
25 SPECIFIC INDIVIDUAL IDENTIFIED IN THE CONTRACT, THIS ARTICLE SHALL APPLY
26 TO A PERSON WHO IS THE OWNER OF SUCH A CONTRACT:
27 (I) IF THE CONTRACT IS ISSUED TO OR IN CONNECTION WITH A SPECIFIC
28 BENEFIT PLAN WHERE THE PLAN SPONSOR HAS ITS PRINCIPAL PLACE OF BUSINESS
29 IN THIS STATE; PROVIDED, HOWEVER, THAT FOR THE PURPOSE OF THIS SUBPARA-
30 GRAPH:
31 (I) "PLAN SPONSOR" SHALL MEAN:
32 (AA) THE EMPLOYER IN THE CASE OF A BENEFIT PLAN ESTABLISHED OR MAIN-
33 TAINED BY A SINGLE EMPLOYER;
34 (BB) THE EMPLOYEE ORGANIZATION IN THE CASE OF A BENEFIT PLAN ESTAB-
35 LISHED OR MAINTAINED BY AN EMPLOYEE ORGANIZATION, PROVIDED THAT "EMPLOY-
36 EE ORGANIZATION" SHALL MEAN ANY LABOR UNION OR ANY ORGANIZATION OF ANY
37 KIND, OR ANY AGENCY OR EMPLOYEE REPRESENTATION COMMITTEE, ASSOCIATION,
38 GROUP, OR PLAN, IN WHICH EMPLOYEES PARTICIPATE AND THAT EXISTS FOR THE
39 PURPOSE, IN WHOLE OR IN PART, OF DEALING WITH EMPLOYERS CONCERNING AN
40 EMPLOYEE BENEFIT PLAN, OR OTHER MATTERS INCIDENTAL TO EMPLOYMENT
41 RELATIONSHIPS, OR ANY EMPLOYEES' BENEFICIARY ASSOCIATION ORGANIZED FOR
42 THE PURPOSE IN WHOLE OR IN PART, OF ESTABLISHING SUCH A PLAN; OR
43 (CC) IN THE CASE OF A BENEFIT PLAN ESTABLISHED OR MAINTAINED BY TWO OR
44 MORE EMPLOYERS OR JOINTLY BY ONE OR MORE EMPLOYERS AND ONE OR MORE
45 EMPLOYEE ORGANIZATIONS, THE ASSOCIATION, COMMITTEE, JOINT BOARD OF TRUS-
46 TEES, OR OTHER SIMILAR GROUP OF REPRESENTATIVES OF THE PARTIES WHO
47 ESTABLISH OR MAINTAIN THE BENEFIT PLAN; AND
48 (II) "PRINCIPAL PLACE OF BUSINESS" SHALL MEAN:
49 (AA) THE STATE IN WHICH THE INDIVIDUALS WHO ESTABLISH POLICY FOR THE
50 DIRECTION, CONTROL, AND COORDINATION OF THE OPERATIONS OF THE ENTITY AS
51 A WHOLE PRIMARILY EXERCISE THAT FUNCTION, EXCEPT THAT IF MORE THAN FIFTY
52 PERCENT OF THE PARTICIPANTS IN THE BENEFIT PLAN ARE EMPLOYED IN A SINGLE
53 STATE, THEN THAT STATE SHALL BE DEEMED TO BE THE PRINCIPAL PLACE OF
54 BUSINESS OF THE PLAN SPONSOR; OR
55 (BB) WITH REGARD TO A PLAN SPONSOR OF A BENEFIT PLAN DESCRIBED IN
56 SUBITEM (CC) OF CLAUSE (I) OF THIS ITEM, THE PRINCIPAL PLACE OF BUSI-
S. 7320--A 3
1 NESS, AS DETERMINED PURSUANT TO SUBITEM (AA) OF THIS CLAUSE, OF THE
2 EMPLOYER OR EMPLOYEE ORGANIZATION THAT HAS THE LARGEST INVESTMENT IN THE
3 BENEFIT PLAN; OR
4 (II) ISSUED TO OR IN CONNECTION WITH A GOVERNMENT LOTTERY IF THE OWNER
5 IS A RESIDENT; AND
6 (B) WITH REGARD TO A STRUCTURED SETTLEMENT ANNUITY, THIS SECTION SHALL
7 APPLY TO A PERSON WHO IS A PAYEE UNDER THE STRUCTURED SETTLEMENT ANNUI-
8 TY, OR THE BENEFICIARY OF A PAYEE IF THE PAYEE IS DECEASED, IF THE PAYEE
9 (OR BENEFICIARY):
10 (I) IS A RESIDENT, REGARDLESS OF WHERE THE OWNER OF THE STRUCTURED
11 SETTLEMENT ANNUITY RESIDES; OR
12 (II) IS NOT A RESIDENT, BUT ONLY UNDER THE FOLLOWING CONDITIONS:
13 (I) (AA) THE OWNER OF THE STRUCTURED SETTLEMENT ANNUITY IS A RESIDENT;
14 OR
15 (BB) THE OWNER OF THE STRUCTURED SETTLEMENT ANNUITY IS NOT A RESIDENT,
16 BUT THE INSURER THAT ISSUED THE STRUCTURED SETTLEMENT ANNUITY IS DOMI-
17 CILED IN THIS STATE AND THE STATE IN WHICH THE OWNER RESIDES HAS A GUAR-
18 ANTY ENTITY SIMILAR TO THE CORPORATION CREATED BY THIS ARTICLE; AND
19 (II) NEITHER THE PAYEE (OR BENEFICIARY) NOR THE OWNER OF THE STRUC-
20 TURED SETTLEMENT ANNUITY IS ELIGIBLE FOR COVERAGE BY A GUARANTY ENTITY
21 OF THE STATE IN WHICH THE PAYEE (OR BENEFICIARY) OR OWNER RESIDES.
22 (b) This article shall not apply to:
23 (1) [That] THAT portion or part of a variable life insurance policy,
24 variable annuity contract or variable funding agreement not guaranteed
25 by an insurer;
26 (2) [That] THAT portion or part of any policy, contract or agreement
27 under which the risk is borne by the holder thereof;
28 (3) [Any] ANY policy, contract, or agreement, or part thereof, assumed
29 by the impaired or insolvent insurer under a contract of reinsurance,
30 other than reinsurance for which assumption certificates have been
31 issued;
32 (4) [Any] ANY policy, contract, or agreement issued by or through the
33 facilities of the New York Insurance Exchange, Inc., or any similar
34 entity, or pursuant to article sixty-three of this chapter;
35 (5) [Any] ANY policy, contract, or agreement issued or issued for
36 delivery outside the United States, to the extent it covers persons not
37 citizens or permanent residents of the United States; and
38 (6) [Any] ANY policy, contract, or agreement payable other than in
39 United States dollars.
40 (C) THIS ARTICLE SHALL NOT APPLY TO A PERSON:
41 (1) WHO IS A PAYEE, OR THE BENEFICIARY OF A PAYEE IF THE PAYEE IS
42 DECEASED, OF AN OWNER RESIDENT IF THE PAYEE (OR BENEFICIARY) IS AFFORDED
43 ANY COVERAGE BY A GUARANTY ENTITY OF ANOTHER STATE; OR
44 (2) COVERED UNDER SUBPARAGRAPH (A) OF PARAGRAPH THREE OF SUBSECTION
45 (A) OF THIS SECTION IF THE GUARANTY ENTITY OF ANOTHER STATE PROVIDES ANY
46 COVERAGE TO THE PERSON.
47 S 3. Subsections (d), (h), (j), and (k) of section 7705 of the insur-
48 ance law, as added by chapter 802 of the laws of 1985, are amended and a
49 new subsection (l) is added to read as follows:
50 (d) "Covered policy" means any of the kinds of insurance specified in
51 paragraph one, two or three of subsection (a) of section one thousand
52 one hundred thirteen of this chapter, ANY SUPPLEMENTAL CONTRACT, or any
53 funding agreement referred to in section three thousand two hundred
54 twenty-two of this chapter, or any portion or part thereof, within the
55 scope of this article under section seven thousand seven hundred three
56 of this article, except that any certificate issued to an individual
S. 7320--A 4
1 under any group policy or contract shall be considered to be a separate
2 covered policy for purposes of section seven thousand seven hundred
3 eight of this article.
4 (h) "Member insurer" means any life insurance company licensed to
5 transact in this state any kind of insurance to which this article
6 applies under section seven thousand seven hundred three of this arti-
7 cle[. Solely for purposes of subsections (f) and (g) of this section,];
8 PROVIDED, HOWEVER, THAT the term "member insurer" [shall] also [mean]
9 MEANS any life insurance company formerly licensed to transact in this
10 state any kind of insurance to which this article applies under section
11 seven thousand seven hundred three of this article.
12 (j) "Person" means any individual OR LEGAL ENTITY, INCLUDING A corpo-
13 ration, partnership, association, LIMITED LIABILITY COMPANY, TRUST, or
14 voluntary organization.
15 (k) "Resident" means [any] A person to whom A contractual [obligations
16 are] OBLIGATION IS owed and who either: (1) resides in this state [at
17 the time] ON THE DATE OF ENTRY OF A COURT ORDER OF LIQUIDATION OR REHA-
18 BILITATION WITH RESPECT TO a member insurer [is determined to be] THAT
19 IS an impaired or insolvent insurer[,]; or (2) resided in this state at
20 the time a member insurer issued a covered policy to such person.
21 (L) "SUPPLEMENTAL CONTRACT" MEANS AN AGREEMENT OR ANY OTHER MECHANISM
22 FOR THE DISTRIBUTION OF PROCEEDS UNDER A LIFE INSURANCE POLICY, HEALTH
23 INSURANCE POLICY, ANNUITY CONTRACT, OR FUNDING AGREEMENT.
24 S 4. Subsections (a) and (b) of section 7708 of the insurance law, as
25 added by chapter 802 of the laws of 1985, are amended to read as
26 follows:
27 (a) (1) If a domestic insurer is an impaired or insolvent insurer, the
28 corporation shall, with the approval of the superintendent:
29 [(1)] (A) guarantee, assume, or reinsure, or cause to be guaranteed,
30 assumed, or reinsured, the covered policies [of residents], or arrange
31 for replacement by policies found by the superintendent to be substan-
32 tially similar to such covered policies;
33 [(2)] (B) assure payment of the contractual obligations of the
34 impaired or insolvent insurer [to residents]; and
35 [(3)] (C) provide such moneys, pledges, notes, guarantees or other
36 means as are reasonably necessary to discharge such duties.
37 (2) The aggregate liability of the corporation under this subsection
38 shall not exceed five hundred thousand dollars for all benefits, includ-
39 ing cash values, with respect to any one life or, to the extent benefits
40 are not allocated pursuant to a covered policy to any one life, to any
41 one covered policy; provided, however, [(i)] that (A) the foregoing
42 limitation shall not apply to any group or blanket accident or health
43 insurance or accident and health insurance policy; and [(ii) that] (B)
44 the corporation shall be liable under this subsection in an amount not
45 to exceed one million dollars for all benefits, including cash values,
46 with respect to any group annuity contract (or portion of any such
47 contract) that does not guarantee annuity benefits with respect to any
48 specific individual identified in the contract and with respect to any
49 funding agreement issued to fund benefits under any employee benefit
50 plan.
51 (b) (1) If a foreign or alien insurer is an impaired or insolvent
52 insurer, the corporation shall, with the approval of the superintendent:
53 [(1)] (A) guarantee, assume, or reinsure or cause to be guaranteed,
54 assumed, or reinsured the covered policies [of residents], or arrange
55 for replacement by policies found by the superintendent to be substan-
56 tially similar to such covered policies;
S. 7320--A 5
1 [(2)] (B) assure payment of the contractual obligations of the insol-
2 vent insurer [to residents]; and
3 [(3)] (C) provide such moneys, pledges, notes, guarantees, or other
4 means as are reasonably necessary to discharge such duties.
5 (2) The aggregate liability of the corporation under this subsection
6 shall be the excess over any amount that the superintendent determines
7 to be the statutory obligation of the guaranty corporation or associ-
8 ation of the foreign or alien insurer's state of domicile or state of
9 entry, but in no event shall the corporation's liability, when added to
10 the amount so determined to be available from such other guaranty corpo-
11 ration or association, exceed five hundred thousand dollars for all
12 benefits, including cash values, with respect to any one life, or, to
13 the extent benefits are not allocated pursuant to a covered policy to
14 any one life, to any one covered policy; provided, however, [(i)] that
15 the (A) foregoing five hundred thousand dollar limitation shall not
16 apply to any group or blanket accident or health insurance or accident
17 and health insurance policy; and [(ii) that the] (B) liability of all
18 such guaranty corporations or associations may in the aggregate equal,
19 but shall not exceed one million dollars for all benefits, including
20 cash values, with respect to any group annuity contract (or portion of
21 any such contract) that does not guarantee annuity benefits with respect
22 to any specific individual identified in the contract and with respect
23 to any funding agreement issued to fund benefits under any employee
24 benefit plan.
25 S 5. Subsection (h) of section 7708 of the insurance law, as added by
26 chapter 802 of the laws of 1985, is amended to read as follows:
27 (h) The corporation may:
28 (1) [Enter] ENTER into such contracts as are necessary or proper to
29 carry out the provisions and purposes of this article[.];
30 (2) [Sue] SUE or be sued, including taking any legal actions necessary
31 or proper for recovery of any unpaid assessments under section seven
32 thousand seven hundred nine of this article[.];
33 (3) [Borrow] BORROW money to effect the purposes of this article[.
34 The], PROVIDED, HOWEVER, THAT THE corporation may agree, as a condition
35 of any borrowing, that the lender will be subrogated to the rights of
36 the corporation against the impaired or insolvent insurer to the extent
37 of the amount borrowed and interest accruing thereon[. Any], AND
38 PROVIDED FURTHER THAT ANY note or other evidence of indebtedness of the
39 corporation not in default shall be a legal investment for domestic
40 insurers and may be carried as admitted assets[.];
41 (4) [Employ] EMPLOY or retain such persons as are necessary or proper
42 to handle the financial transactions of the corporation, and to perform
43 such other functions as become necessary or proper under this
44 article[.];
45 (5) [With] WITH the approval of the superintendent, negotiate and
46 contract with any liquidator, rehabilitator, conservator or ancillary
47 receiver to carry out the powers and duties of the corporation[.];
48 (6) [Take] TAKE such legal action as may be necessary to avoid payment
49 of improper claims[.];
50 (7) [Exercise] EXERCISE, for the purposes of this article and to the
51 extent approved by the superintendent, the powers of a domestic life
52 insurance company, but in no case may the corporation issue insurance
53 policies or annuity contracts other than those issued to perform the
54 contractual obligations of the impaired or insolvent insurer[.];
55 (8) [Exercise] FUND A RESOLUTION FACILITY ESTABLISHED PURSUANT TO
56 SECTION SEVEN THOUSAND SEVEN HUNDRED NINETEEN OF THIS ARTICLE; AND
S. 7320--A 6
1 (9) EXERCISE all powers necessary or convenient for the purposes of
2 this article.
3 S 6. Paragraph 1 of subsection (e) of section 7709 of the insurance
4 law, as amended by chapter 217 of the laws of 2012, is amended to read
5 as follows:
6 (1) [The total assessment against all member insurers for all impair-
7 ments and insolvencies, less the amount of refunds (not including inter-
8 est) to member insurers pursuant to subsection (f) of this section,
9 shall not exceed five hundred million dollars, except that with] WITH
10 respect to a member insurer that is a domestic insurer and is subject to
11 an order of rehabilitation under article seventy-four of this chapter as
12 of March first, two thousand twelve, [such] THE TOTAL assessment [limit]
13 AGAINST ALL MEMBER INSURERS FOR IMPAIRMENTS AND INSOLVENCIES, LESS THE
14 AMOUNT OF REFUNDS (NOT INCLUDING INTEREST) TO MEMBER INSURERS PURSUANT
15 TO SUBSECTION (F) OF THIS SECTION, shall be five hundred fifty-eight
16 million dollars; provided, however, that such five hundred fifty-eight
17 million dollar [limit] TOTAL shall be subject to reduction in an amount,
18 if any, determined by the superintendent, on a date not earlier than
19 twelve months after the entry of an order of liquidation with respect to
20 such domestic insurer, to be not needed for the corporation to be able
21 to pay its obligations and reasonable expenses in connection with the
22 liquidation of such domestic insurer, but in no event shall such
23 reduction exceed fifty-eight million dollars.
24 S 7. The insurance law is amended by adding a new section 7719 to read
25 as follows:
26 S 7719. RESOLUTION FACILITY. (A) THE CORPORATION MAY INCORPORATE ONE
27 OR MORE NOT-FOR-PROFIT CORPORATIONS, KNOWN AS A RESOLUTION FACILITY, IN
28 CONNECTION WITH THE LIQUIDATION OF AN INSOLVENT DOMESTIC LIFE INSURANCE
29 COMPANY UNDER ARTICLE SEVENTY-FOUR OF THIS CHAPTER FOR THE PURPOSE OF
30 ADMINISTERING AND DISPOSING OF THE BUSINESS OF THE INSOLVENT DOMESTIC
31 LIFE INSURANCE COMPANY.
32 (B) TO THE EXTENT THAT THE PROVISIONS OF THE NOT-FOR-PROFIT CORPO-
33 RATION LAW DO NOT CONFLICT WITH THE PROVISIONS OF THIS SECTION OR THE
34 PLAN OF OPERATION OF THE RESOLUTION FACILITY HEREUNDER, THE NOT-FOR-PRO-
35 FIT CORPORATION LAW SHALL APPLY TO THE RESOLUTION FACILITY AND THE
36 RESOLUTION FACILITY SHALL BE A NON-CHARITABLE CORPORATION PURSUANT TO
37 THE NOT-FOR-PROFIT CORPORATION LAW. IF AN APPLICABLE PROVISION OF THIS
38 SECTION OR THE PLAN OF OPERATION OF THE RESOLUTION FACILITY HEREUNDER
39 RELATES TO A MATTER EMBRACED IN A PROVISION OF THE NOT-FOR-PROFIT CORPO-
40 RATION LAW BUT IS NOT IN CONFLICT THEREWITH, THEN BOTH PROVISIONS SHALL
41 APPLY. THE CORPORATION SHALL BE A MEMBER OF THE RESOLUTION FACILITY, AND
42 OTHER PERSONS, INCLUDING THE LIFE INSURANCE GUARANTY CORPORATION CONTIN-
43 UED UNDER ARTICLE SEVENTY-FIVE OF THIS CHAPTER AND GUARANTY ENTITIES OF
44 OTHER STATES, MAY BECOME MEMBERS OF THE RESOLUTION FACILITY IN ACCORD-
45 ANCE WITH THE RESOLUTION FACILITY'S CERTIFICATE OF INCORPORATION AND
46 PLAN OF OPERATION.
47 (C) IN ADDITION TO ITS CERTIFICATE OF INCORPORATION, A RESOLUTION
48 FACILITY SHALL SUBMIT TO THE SUPERINTENDENT A PLAN OF OPERATION, AND
49 AMENDMENTS THERETO, NECESSARY OR SUITABLE TO ASSURE THE FAIR, REASON-
50 ABLE, AND EQUITABLE ADMINISTRATION OF THE RESOLUTION FACILITY. THE PLAN
51 OF OPERATION, AND ANY AMENDMENTS THERETO, SHALL BECOME EFFECTIVE UPON
52 APPROVAL IN WRITING BY THE SUPERINTENDENT. THE PLAN OF OPERATION SHALL
53 CONSTITUTE THE BYLAWS OF THE RESOLUTION FACILITY.
54 (D) A RESOLUTION FACILITY MAY:
55 (1) GUARANTEE, ASSUME, OR REINSURE, OR CAUSE TO BE GUARANTEED,
56 ASSUMED, OR REINSURED, THE COVERED POLICIES, OR ARRANGE FOR REPLACEMENT
S. 7320--A 7
1 BY POLICIES FOUND BY THE SUPERINTENDENT TO BE SUBSTANTIALLY SIMILAR TO
2 THE COVERED POLICIES;
3 (2) EXERCISE, FOR THE PURPOSES OF THIS ARTICLE AND TO THE EXTENT
4 APPROVED BY THE SUPERINTENDENT, THE POWERS OF A DOMESTIC LIFE INSURANCE
5 COMPANY, BUT IN NO CASE MAY THE RESOLUTION FACILITY ISSUE INSURANCE
6 POLICIES, ANNUITY CONTRACTS, FUNDING AGREEMENTS, OR SUPPLEMENTAL
7 CONTRACTS OTHER THAN THOSE ISSUED TO PERFORM THE CONTRACTUAL OBLIGATIONS
8 OF THE IMPAIRED OR INSOLVENT INSURER;
9 (3) ASSURE PAYMENT OF THE CONTRACTUAL OBLIGATIONS OF THE INSOLVENT
10 INSURER; AND
11 (4) PROVIDE SUCH MONEYS, PLEDGES, NOTES, GUARANTEES, OR OTHER MEANS AS
12 ARE REASONABLY NECESSARY TO DISCHARGE ITS DUTIES.
13 (E) A RESOLUTION FACILITY SHALL NOT BE SUBJECT TO ANY PROVISIONS OF
14 THIS CHAPTER OR THE FINANCIAL SERVICES LAW EXCEPT:
15 (1) THIS SECTION; AND
16 (2) SECTIONS SEVEN THOUSAND SEVEN HUNDRED FOURTEEN, SEVEN THOUSAND
17 SEVEN HUNDRED FIFTEEN, AND SEVEN THOUSAND SEVEN HUNDRED SIXTEEN OF THIS
18 ARTICLE, WHICH SHALL APPLY IN THE SAME MANNER AS THEY APPLY TO THE
19 CORPORATION.
20 (F) NOTWITHSTANDING SUBSECTION (E) OF THIS SECTION, THE SUPERINTENDENT
21 MAY ADDRESS TO THE RESOLUTION FACILITY ANY INQUIRY IN RELATION TO ITS
22 TRANSACTIONS OR CONDITION OR ANY MATTER CONNECTED THEREWITH PURSUANT TO
23 SECTION THREE HUNDRED EIGHT OF THIS CHAPTER.
24 (G) (1) IF THE SUPERINTENDENT DETERMINES THAT THE RESOLUTION FACILITY
25 IS NOT ADMINISTERING AND DISPOSING OF THE BUSINESS OF AN INSOLVENT
26 DOMESTIC LIFE INSURANCE COMPANY CONSISTENT WITH THE RESOLUTION FACILI-
27 TY'S CERTIFICATE OF INCORPORATION, PLAN OF OPERATION, OR THIS SECTION,
28 THEN THE SUPERINTENDENT SHALL PROVIDE NOTICE TO THE RESOLUTION FACILITY
29 AND THE RESOLUTION FACILITY SHALL HAVE THIRTY DAYS TO RESPOND TO THE
30 SUPERINTENDENT AND CURE THE DEFECT.
31 (2) IF, AFTER THIRTY DAYS, THE SUPERINTENDENT CONTINUES TO BELIEVE
32 THAT THE RESOLUTION FACILITY IS NOT ADMINISTERING AND DISPOSING OF THE
33 BUSINESS OF AN INSOLVENT DOMESTIC LIFE INSURANCE COMPANY CONSISTENT WITH
34 THE RESOLUTION FACILITY'S CERTIFICATE OF INCORPORATION, PLAN OF OPERA-
35 TION, OR THIS SECTION, THEN THE SUPERINTENDENT MAY APPLY TO THE COURT
36 FOR AN ORDER DIRECTING THE RESOLUTION FACILITY TO CORRECT THE DEFECT OR
37 TAKE OTHER APPROPRIATE ACTIONS.
38 S 8. Section 1108 of the insurance law is amended by adding a new
39 subsection (n) to read as follows:
40 (N) A RESOLUTION FACILITY ESTABLISHED PURSUANT TO SECTION SEVEN THOU-
41 SAND SEVEN HUNDRED NINETEEN OF THIS CHAPTER.
42 S 9. Subsection (f) of section 7503 of the insurance law is amended to
43 read as follows:
44 (f) The corporation shall have the power:
45 (1) [To] TO use a corporate seal, to contract, to sue and be sued and
46 to possess and exercise all powers necessary or convenient for the
47 purposes of this article[.];
48 (2) [With] WITH the approval of the superintendent, to assume, rein-
49 sure or guaranty, or cause to be assumed, reinsured or guaranteed,
50 partially or wholly, any or all policies or contracts of any member
51 company and to make available from the fund such sums as may be neces-
52 sary for such purposes[.];
53 (3) [To] TO carry out the provisions of this article, the corporation
54 shall have and may exercise all necessary rights, powers, privileges and
55 franchises of a domestic life insurance company except that it shall not
56 be authorized to issue contracts or policies unless they replace
S. 7320--A 8
1 contracts or policies representing obligations in whole or in part of
2 another domestic life insurance company or of the corporation[.];
3 (4) [To] TO borrow money for the purposes of the fund with or without
4 security and pledge such assets in the fund as security for such loans
5 and in connection therewith to rehypothecate any securities or collat-
6 eral pledged to it by a company[. Obligations], PROVIDED, HOWEVER, THAT
7 OBLIGATIONS of the corporation shall be legal investments for domestic
8 life insurance companies and to the extent authorized by the superinten-
9 dent may be carried as admitted assets[.];
10 (5) [To] TO collect, or enforce by legal proceedings, if necessary,
11 the payment of, all assessments for which any contributor may be liable
12 under this article; to collect any obligation due to the corporation or
13 to the fund[.]; AND
14 (6) TO FUND A RESOLUTION FACILITY ESTABLISHED PURSUANT TO SECTION
15 SEVEN THOUSAND SEVEN HUNDRED NINETEEN OF THIS CHAPTER.
16 S 10. This act shall take effect immediately.
