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A03283 Summary:

BILL NO    A03283 

SAME AS    No same as 

SPONSOR    Weprin

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:

                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________

                                         3283

                              2015-2016 Regular Sessions

                                 I N  A S S E M B L Y

                                   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    S 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    S  3.  Section 1325 of the insurance law is REPEALED and a new section
    6  1325 is added to read as follows:
    7    S 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
   29  NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
   30  OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED  TWENTY-FOUR  OF
   31  THIS  ARTICLE APPLIED, AND NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO
   32  THE CONTRARY, A CARRIER MAY FILE FOR AND USE  A  RATE  INCREASE  NOT  TO
   33  EXCEED FIVE PERCENT OF THE CARRIER'S CURRENT RATE UPON A FILING WITH THE
   34  SUPERINTENDENT 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    S 4. The insurance law is amended by adding a new section 1326 to read
   41  as follows:
   42    S  1326.  STATUTORY  ASSOCIATION  MEMBERSHIP.    FOR  THOSE  STOCK AND
   43  NON-STOCK COMPANIES TO  WHICH  SUBPARAGRAPH  (B)  OF  PARAGRAPH  TWO  OF
   44  SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF THIS
   45  ARTICLE  APPLY, NO LIABILITIES ARISING FROM ANY MEMBERSHIP IN ANY STATU-
   46  TORY ASSOCIATION SHALL BE DUE AND OWING FROM SUCH COMPANIES  UNLESS  AND
   47  UNTIL  SUCH LIABILITIES CAN ONLY BE SATISFIED BY A CONTRIBUTION FROM THE
   48  INSURER, AND THE INSURER IS NOTIFIED OF SAME  NOT  LESS  THAN  ONE  YEAR
   49  PRIOR  TO  THE EXPECTED DATE THAT SUCH OBLIGATION WILL BE DUE AND OWING.
   50  SUCH LIABILITIES SHALL NOT BE AGGREGATED AND SHALL NOT  INCLUDE  CONTIN-
   51  GENT  LIABILITIES,  BUT REFLECT SPECIFIC CLAIMS LIABILITIES ACTUALLY DUE
   52  AND OWING OR EXPECTED TO BE DUE AND OWING IN THAT YEAR FOR  WHICH  THERE
   53  ARE  NO  OTHER  ASSOCIATION OR POOL RESOURCES, INCLUDING CURRENT PREMIUM
   54  INCOME, TO SATISFY SUCH OBLIGATIONS; FURTHER, COMPANIES, UPON RECEIPT OF
   55  NOTICE OF SUCH OBLIGATION, SHALL HAVE THE RIGHT TO AUDIT ANY SUCH  ASSO-
   56  CIATION AND ITS REQUEST FOR COVERAGE OF SUCH LIABILITIES.
       A. 3283                             3

    1    S  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    S 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    S 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    S 8. This act shall take effect immediately.
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