Authorizes The Life Insurance Guaranty Corporation to incorporate resolution facilities in connection with the rehabilitation or liquidation of an impaired or insolvent domestic life insurance company.
STATE OF NEW YORK
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3968
2011-2012 Regular Sessions
IN ASSEMBLY
January 31, 2011
___________
Introduced by M. of A. MORELLE -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to incorporation of
resolution facilities
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 7719
2 to read as follows:
3 § 7719. Resolution facility. (a) The corporation may from time to
4 time incorporate one or more not-for-profit corporations, each known as
5 a resolution facility, in connection with the rehabilitation or liqui-
6 dation of an impaired or insolvent domestic life insurance company under
7 article seventy-four of this chapter, and for the purpose of administer-
8 ing and disposing of the business of an impaired or insolvent domestic
9 life insurance company assumed by or assigned to the resolution facili-
10 ty.
11 (b) Funding for a resolution facility may be provided by (i) the reha-
12 bilitator or liquidator of the impaired or insolvent insurer whose busi-
13 ness is assumed by or assigned to the resolution facility, (ii) the
14 corporation, (iii) The Life Insurance Guaranty Corporation continued
15 under article seventy-five of this chapter, (iv) any other guaranty
16 corporations or associations of other jurisdictions having obligations
17 in connection with insurance policies, annuity contracts or funding
18 agreements of the impaired or insolvent insurer whose business is
19 assumed by or assigned to the resolution facility, or (v) any other
20 person.
21 (c) Each resolution facility shall be a type C not-for-profit corpo-
22 ration pursuant to the not-for-profit corporation law. A resolution
23 facility shall have one or more classes of members. The corporation
24 shall be a member of each resolution facility, and other persons,
25 including, without limitation, The Life Insurance Guaranty Corporation
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05166-01-1
A. 3968 2
1 continued under article seventy-five of this chapter and guaranty corpo-
2 rations or associations of other jurisdictions, may become members of a
3 resolution facility in accordance with the certificate of incorporation,
4 by-laws and plan of operation of the resolution facility.
5 (d) In accordance with its plan of operation, a resolution facility
6 may (i) guarantee, assume or reinsure, or cause to be guaranteed,
7 assumed or reinsured, the insurance policies, funding agreements or
8 annuity contracts of the impaired or insolvent insurer whose business is
9 assumed by or assigned to the resolution facility (as such insurance
10 policies, funding agreements or annuity contracts may have been amended,
11 modified or restructured with the approval of a court of competent
12 jurisdiction), or arrange for replacement by insurance policies, funding
13 agreements or annuity contracts found by the rehabilitator or liquidator
14 of such impaired or insolvent insurer to be substantially similar to
15 such insurance policies, funding agreements or annuity contracts of such
16 impaired or insolvent insurer or replacement by insurance policies,
17 funding agreements or annuity contracts approved by a court of competent
18 jurisdiction, and (ii) otherwise exercise the powers of a domestic life
19 insurance company, but in no case may a resolution facility issue insur-
20 ance policies, funding agreements or annuity contracts other than those
21 issued in respect of the contractual obligations of the impaired or
22 insolvent insurer.
23 (e) Section seven thousand seven hundred fifteen of this article and
24 the first two sentences of section seven thousand seven hundred sixteen
25 of this article shall apply to each resolution facility as they apply to
26 the corporation; no other provisions of this chapter, other than those
27 contained in this section, shall apply to a resolution facility.
28 (f) In addition to its certificate of incorporation and by-laws, each
29 resolution facility shall adopt a plan of operation necessary or suit-
30 able to assure the fair, reasonable and equitable administration of such
31 resolution facility's business. The plan of operation shall be submitted
32 to the rehabilitator or liquidator of the impaired or insolvent insurer
33 whose business is to be assumed by or assigned to the resolution facili-
34 ty and shall be effective upon the written approval of such rehabilita-
35 tor or liquidator.
36 (g) The plan of operation shall set forth (i) the oversight authority
37 for the resolution facility, and (ii) procedures for amendments or
38 modifications to the plan of operation.
39 § 2. This act shall take effect immediately.
