A04830 Summary:

BILL NO    A04830 

SAME AS    No same as

SPONSOR    Morelle

COSPNSR    

MLTSPNSR   

Amd S6502, Ins L

Requires the calculation of policyholder positions for mono line mortgage
guaranty insurance companies; defines "minimum policyholders positions" and
prescribes other technical requirements for the unique contingency reserve
required for mortgage guaranty insurers.

A04830 Actions:

BILL NO    A04830 

02/06/2009 referred to insurance
01/06/2010 referred to insurance

A04830 Votes:

A04830 Memo:

 BILL NUMBER:  A4830

 TITLE OF BILL :  An act to amend the insurance law, in relation to
mortgage guaranty insurance contingency reserves

 PURPOSE :

To authorize the Superintendent of Insurance to approve of withdrawals
from the mortgage guaranty insurer contingency reserve in line with
requirements espoused by other states.

 SUMMARY OF PROVISIONS :

Section one of the bill amends Section 6502 of the Insurance Law to
set forth the circumstances under which withdrawals may be made from
the contingency reserve.

Section two of the bill provides for an immediate effective date.

 JUSTIFICATION :  Mortgage guaranty insurance companies are required
by New York law to be monoline and to maintain a, unique contingency
reserve, which protects policyholders against the effect of adverse
economic cycles.  The current contingency reserve requirement,
however, actually punishes mortgage guaranty insurers by requiring
that they hold significantly more capital than otherwise might be
required. This proposal preserves the unique required contingency
reserve, but also provides for conditions under which the
Superintendent may allow withdrawals from the contingency reserve.
With the approval of the Superintendent, excess capital may be used by
mortgage guaranty insurers to increase capacity within the existing
mortgage guaranty insurance market or to expand through new products.
This bill promotes uniform standards in New York law corresponding to
that in several states in which the majority of mortgage guaranty
insurance groups are domiciled, including Wisconsin (domiciliary state
of the largest mortgage guaranty insurer), whose regulation has been
in place for a number of years, and North Carolina (where three of the
companies are domiciled).

 LEGISLATIVE HISTORY : New Bill.

 FISCAL IMPLICATIONS : None.

 EFFECTIVE DATE :
Immediate.