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A03283 Summary:

BILL NOA03283
 
SAME ASNo Same As
 
SPONSORWeprin
 
COSPNSR
 
MLTSPNSR
 
Amd SS1301, 1311, 2343, 6108, & 6111, rpld & add S1325, add S1326, Ins L
 
Provides an exemption to certain provisions relating to risk-based capital for property/casualty insurance companies; repeals certain provisions relating thereto; relates to financial regulation of medical malpractice insurance liability companies.
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A03283 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3283
 
                               2015-2016 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 22, 2015
                                       ___________
 
        Introduced by M. of A. WEPRIN -- read once and referred to the Committee
          on Insurance
 
        AN  ACT  to  amend  the  insurance  law,  in relation to an exemption to
          certain  provisions  of  law  relating  to  risk-based   capital   for
          property/casualty  insurance  companies; and in relation to the finan-
          cial regulation of medical malpractice liability insurance  companies;
          and to repeal certain provisions of such law relating thereto
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subsection (a) of section 1301  of  the  insurance  law  is
     2  amended by adding two new paragraphs 19 and 20 to read as follows:
     3    (19) For those stock and non-stock companies to which subparagraph (B)
     4  of paragraph two of subsection (b) of section one thousand three hundred
     5  twenty-four of this article apply, the amount of the surcharge on premi-
     6  ums to satisfy a projected deficiency that is attributable to the premi-
     7  um  levels  established pursuant to section forty of chapter two hundred
     8  sixty-six of the laws of nineteen hundred eighty-six, as such  surcharge
     9  is  provided  in such chapter, whether or not such surcharge is actually
    10  imposed by the superintendent; provided, however, that such  surcharges,
    11  if  imposed,  will  be  subject  to the limitations provided for in this
    12  chapter relating to the amounts to be collected in a given policy year.
    13    (20) For reciprocal insurers organized and licensed pursuant to  arti-
    14  cle  sixty-one of this chapter to write medical malpractice insurance as
    15  that term is defined in subsection (b) of  section  five  thousand  five
    16  hundred  one of this chapter, the amount of any assessment authorized by
    17  subsections (a) and (b) of section six thousand  one  hundred  eight  of
    18  this chapter; provided, however, that such assessments, if imposed, will
    19  be  subject  to the limitations provided for in this chapter relating to
    20  the amounts to be collected in a given policy year.
    21    § 2. Section 1311 of the insurance law is  amended  by  adding  a  new
    22  subsection (e) to read as follows:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07502-01-5

        A. 3283                             2
 
     1    (e)  In determining the total admitted assets of an insurer the super-
     2  intendent shall include in such  determination  all  assets  allowed  as
     3  admitted assets pursuant to subsection (a) of section one thousand three
     4  hundred one of this article.
     5    §  3.  Section 1325 of the insurance law is REPEALED and a new section
     6  1325 is added to read as follows:
     7    § 1325. Exemption. (a) For the purposes of exempting certain insurance
     8  companies from the provisions of  section  one  thousand  three  hundred
     9  twenty-four of this article, the superintendent shall exempt those stock
    10  and non-stock insurance companies to which subparagraph (B) of paragraph
    11  two of subsection (b) of such section applies.
    12    (b)  The  superintendent shall no later than June thirtieth, two thou-
    13  sand seventeen promulgate, for application during  the  next  succeeding
    14  calendar  year,  and after  consultation with the commissioner of health
    15  and domestic medical malpractice insurers  writing  medical  malpractice
    16  insurance  in  this state, a regulation which provides a separate finan-
    17  cial security standard and rate approval process  for  those  stock  and
    18  non-stock insurance companies to which subparagraph (B) of paragraph two
    19  of  subsection  (b) of section one thousand three hundred twenty-four of
    20  this article apply. Such standard shall be  sufficiently  distinct  from
    21  that  provided  for in this chapter or related regulation or utilized by
    22  the superintendent in the examination of property and casualty  carriers
    23  so  as  to  reflect  the  unique market, financial and legal obligations
    24  imposed upon medical malpractice insurance carriers. Further, the  regu-
    25  lation  shall include new statutory financial statement blanks and exam-
    26  ination protocols consistent with the new standard.
    27    (c) Until such time as the superintendent promulgates  regulations  in
    28  accordance  with  subsection  (b)  of this section, those stock and non-
    29  stock insurance companies to which subparagraph (B) of paragraph two  of
    30  subsection (b) of section one thousand three hundred twenty-four of this
    31  article  applied,  and notwithstanding any other provision of law to the
    32  contrary, a carrier may file for and use a rate increase not  to  exceed
    33  five percent of the carrier's current rate upon a filing with the super-
    34  intendent  for  the  next  succeeding  policy year if such submission is
    35  filed with the superintendent no later than July fifteenth of  the  year
    36  prior  to  which  it  is to be applied.  If a carrier does not file such
    37  rate adjustment within such time  frame,  then  such  insurer  shall  be
    38  subject  to  the rate approval process in place at the time this section
    39  shall take effect.
    40    § 4. The insurance law is amended by adding a new section 1326 to read
    41  as follows:
    42    § 1326. Statutory association membership.   For those stock  and  non-
    43  stock companies to which subparagraph (B) of paragraph two of subsection
    44  (b)  of  section  one thousand three hundred twenty-four of this article
    45  apply, no liabilities arising from any membership in any statutory asso-
    46  ciation shall be due and owing from such companies unless and until such
    47  liabilities can only be satisfied by a contribution  from  the  insurer,
    48  and  the insurer is notified of same not less than one year prior to the
    49  expected date that such obligation will be due and owing.  Such  liabil-
    50  ities  shall  not be aggregated and shall not include contingent liabil-
    51  ities, but reflect specific claims liabilities actually due and owing or
    52  expected to be due and owing in that year for which there are  no  other
    53  association  or  pool  resources,  including  current premium income, to
    54  satisfy such obligations; further, companies, upon receipt of notice  of
    55  such  obligation, shall have the right to audit any such association and
    56  its request for coverage of such liabilities.

        A. 3283                             3
 
     1    § 5. Subsection (c) of section 2343 of the insurance law,  as  amended
     2  by chapter 489 of the laws of 2012, is amended to read as follows:
     3    (c)  Notwithstanding  any other provision of this chapter, no applica-
     4  tion for an order of rehabilitation or liquidation of a domestic insurer
     5  whose primary liability arises from the business of medical  malpractice
     6  insurance,  as  that  term  is defined in subsection (b) of section five
     7  thousand five hundred one of this chapter, shall be made on the  grounds
     8  specified  in  subsection  (a)  or  (c)  of  section seven thousand four
     9  hundred two of this chapter at any time [prior to December thirty-first,
    10  two thousand sixteen].
    11    § 6. Subsection (b) of section 6108 of the insurance law is amended to
    12  read as follows:
    13    (b) If the admitted assets of any such insurer are at any time  insuf-
    14  ficient  for  the payment of losses and expenses after providing for all
    15  other liabilities of such insurer and the minimum surplus to policyhold-
    16  ers required by this chapter, the advisory committee shall, within thir-
    17  ty days thereafter, order an assessment for the amount necessary to  pay
    18  such  losses and expenses, and authorize the attorney-in-fact to collect
    19  from each subscriber liable therefor a pro rata share of the  amount  of
    20  such  assessment, subject to the limit specified in the contract of such
    21  subscriber and to maintain an action therefor in the name of the  attor-
    22  ney-in-fact.  For the purposes of this subsection, admitted assets shall
    23  include a presumption of a surcharge or assessment, where applicable, or
    24  both, having been authorized by the advisory council or directed by  the
    25  superintendent  consistent  with the terms of the subscribers' contracts
    26  and collected by an insurer.
    27    § 7. Subsection (c) of section 6111 of the insurance law is amended to
    28  read as follows:
    29    (c) The contingent liability of subscribers for additional premiums or
    30  assessments shall [not] be included as an asset in the financial  state-
    31  ment of a reciprocal insurer.
    32    § 8. This act shall take effect immediately.
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