STATE OF NEW YORK
________________________________________________________________________
4329--A
2013-2014 Regular Sessions
IN SENATE
March 21, 2013
___________
Introduced by Sen. SEWARD -- (at request of the Department of Financial
Services) -- read twice and ordered printed, and when printed to be
committed to the Committee on Insurance -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
AN ACT to amend the insurance law, in relation to enhancing regulatory
efficiency and efficacy
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 110 of the insurance law, as
2 added by chapter 687 of the laws of 2003, paragraph 1 as amended by
3 chapter 245 of the laws of 2004, is amended to read as follows:
4 (a) In order to assist in the performance of the superintendent's
5 duties under this chapter, the superintendent:
6 (1) may share documents, materials or other information, including
7 [the] confidential and privileged documents, materials or information
8 with other state, federal, and international regulatory agencies, with
9 the National Association of Insurance Commissioners, its affiliates or
10 subsidiaries, and with state, federal, and international law enforcement
11 authorities, including members of any supervisory college described in
12 section three hundred two of this chapter, provided that the recipient
13 has the authority and agrees to maintain the confidentiality and privi-
14 leged status of the document, material or other information; provided,
15 however, that this paragraph shall not be construed as limiting access
16 to records pursuant to article six of the public officers law;
17 (2) may receive documents, materials or information, including other-
18 wise confidential and privileged documents, materials or information,
19 from the National Association of Insurance Commissioners, its affiliates
20 or subsidiaries and from regulatory and law enforcement officials of
21 other foreign or domestic jurisdictions, including members of any super-
22 visory college described in section three hundred two of this chapter,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09114-08-3
S. 4329--A 2
1 and shall maintain as confidential or privileged any document, material
2 or information received with notice or the understanding that it is
3 confidential or privileged under the laws of the jurisdiction that is
4 the source of the document, material or information; and
5 (3) may enter into agreements governing sharing and use of documents,
6 materials or information consistent with this subsection.
7 § 2. The insurance law is amended by adding a new section 302 to read
8 as follows:
9 § 302. Supervisory colleges. (a) The superintendent may participate in
10 a supervisory college in order to determine compliance with this chapter
11 with respect to an insurer that is registered under article fifteen,
12 sixteen, or seventeen of this chapter and has international operations.
13 The powers of the superintendent with respect to supervisory colleges
14 include:
15 (1) initiating the establishment of a supervisory college;
16 (2) clarifying the membership and participation of other supervisors
17 in the supervisory college;
18 (3) clarifying the functions of the supervisory college and the role
19 of other regulators, including the establishment of a group-wide super-
20 visor;
21 (4) coordinating the ongoing activities of the supervisory college,
22 including planning meetings, supervisory activities, and processes for
23 information sharing; and
24 (5) establishing a crisis management plan.
25 (b) Each insurer registered under article fifteen, sixteen, or seven-
26 teen of this chapter that is subject to a supervisory college shall be
27 liable for and shall pay the reasonable expenses of the superintendent's
28 participation in a supervisory college, including reasonable travel
29 expenses. A supervisory college may be convened as either a temporary or
30 permanent forum for the communication and cooperation between the regu-
31 lators charged with the supervision of the insurer or its parent, affil-
32 iates, or subsidiaries. The superintendent may establish a regular
33 assessment to the insurer for the payment of these expenses.
34 (c) In order to assess the business strategy, financial position,
35 legal and regulatory position, risk exposure, risk management and gover-
36 nance processes, and as part of the examination of individual insurers,
37 the superintendent may participate in a supervisory college with other
38 regulators charged with supervision of the insurer or its parent, affil-
39 iates, or subsidiaries, including other state, federal, and interna-
40 tional regulatory agencies. The superintendent may enter into agreements
41 pursuant to section one hundred ten of this chapter providing the basis
42 for cooperation between the superintendent and other regulatory agencies
43 and for the activities of the supervisory college. Nothing in this
44 section shall delegate to the supervisory college the superintendent's
45 authority to regulate or supervise the insurer or its parent, affil-
46 iates, or subsidiaries within the superintendent's jurisdiction.
47 § 3. Subsection (a) of section 1501 of the insurance law is amended by
48 adding a new paragraph 7 to read as follows:
49 (7) "Enterprise risk" means any activity, circumstance, event, or
50 series of events involving the holding company system that, if not reme-
51 died promptly, is likely to have a material adverse effect upon the
52 financial condition or liquidity of the insurer or its holding company
53 system, including anything that would cause the insurer's risk-based
54 capital to fall into company action level as set forth in section one
55 thousand three hundred twenty-two or one thousand three hundred twenty-
56 four of this chapter, or that would cause further transaction of busi-
S. 4329--A 3
1 ness to be hazardous to the insurer's policyholders or creditors or the
2 public.
3 § 4. Section 1503 of the insurance law is amended to read as follows:
4 § 1503. Registration. (a) Every person who becomes a controlled insur-
5 er shall, within thirty days thereafter register with the superintendent
6 and [such] shall amend the registration [shall be amended] within thirty
7 days following any change in the identity of its holding company or any
8 other material change to the information provided in the registration.
9 The registration shall be in such form and shall contain such matters as
10 the superintendent prescribes. The superintendent may grant reasonable
11 extensions of the time to register.
12 (b) [Every registrant shall furnish the superintendent with the
13 following information concerning its holding company:
14 (1) a copy of its charter or articles of incorporation and by-laws;
15 (2) the identities of its principal shareholders, officers, directors
16 and controlled persons; and
17 (3) information as to its capital structure and financial condition,
18 and a description of its principal business activities.] A holding
19 company that directly or indirectly controls an insurer shall adopt a
20 formal enterprise risk management function and shall file an enterprise
21 risk report with the superintendent by April thirtieth of each year. The
22 report shall, to the best of the holding company's knowledge and belief,
23 identify the material risks within the holding company system that could
24 pose enterprise risk to the insurer.
25 § 5. Section 1504 of the insurance law is amended to read as follows:
26 § 1504. Reporting; examination; publication. (a) (1) Every controlled
27 insurer shall file with the superintendent such reports or material as
28 [he] the superintendent may direct for the purpose of disclosing infor-
29 mation concerning the operations of persons within the holding company
30 system [which] that may materially affect the operations, management or
31 financial condition of the insurer.
32 (2) To determine compliance with this article, the superintendent may
33 order any controlled insurer to produce information not in the insurer's
34 possession if the insurer can obtain access to the information pursuant
35 to contractual relationships, statutory obligations, or other method. In
36 the event the insurer cannot obtain the information requested by the
37 superintendent, the insurer shall provide the superintendent a detailed
38 explanation of the reason that the insurer cannot obtain the information
39 and the identity of the holder of information. Whenever it appears to
40 the superintendent that the detailed explanation is without merit, in
41 addition to any other penalty provided by law, the superintendent, after
42 notice and an opportunity to be heard, may levy a penalty against the
43 insurer not to exceed five hundred dollars per day for each day beyond
44 the date specified by the superintendent for response.
45 (b) Every holding company and every controlled person within a holding
46 company system shall be subject to examination by order of the super-
47 intendent if [he] the superintendent has cause to believe that the oper-
48 ations of such persons may materially affect the operations, management
49 or financial condition of any controlled insurer within the system,
50 including by posing enterprise risk to the insurer, and that [he] the
51 superintendent is unable to obtain relevant information from such
52 controlled insurer. The grounds relied upon by the superintendent for
53 such examination shall be stated in [his] the superintendent's order.
54 Such examination shall be confined to matters specified in the order.
55 The cost of such examination shall be assessed against the person exam-
S. 4329--A 4
1 ined and no portion thereof shall thereafter be reimbursed to it direct-
2 ly or indirectly by the controlled insurer.
3 (c) The superintendent shall keep the contents of each report made
4 pursuant to this article and any information obtained in connection
5 therewith confidential and shall not make the same public without the
6 prior written consent of the controlled insurer to which it pertains
7 unless the superintendent after notice and an opportunity to be heard,
8 shall determine that the interests of policyholders, shareholders or the
9 public will be served by the publication thereof. In any action or
10 proceeding by the superintendent against the person examined or any
11 other person within the same holding company system a report of such
12 examination published by [him] the superintendent shall be admissible as
13 evidence of the facts stated therein.
14 § 6. Subsection (d) of section 1505 of the insurance law is amended to
15 read as follows:
16 (d) The following transactions between a domestic controlled insurer
17 and any person in its holding company system may not be entered into
18 unless the insurer has notified the superintendent in writing of its
19 intention to enter into any such transaction at least thirty days prior
20 thereto, or with regard to reinsurance treaties or agreements at least
21 forty-five days prior thereto, or such shorter period as [he] the super-
22 intendent may permit, and [he] the superintendent has not disapproved it
23 within such period:
24 (1) sales, purchases, exchanges, loans or extensions of credit, or
25 investments[,] involving [more than one-half of one percent but] less
26 than five percent of the insurer's admitted assets at last year-end,
27 provided the transactions are equal to or exceed:
28 (A) the lesser of three percent of the insurer's admitted assets or
29 twenty-five percent of capital and surplus at last year-end, with regard
30 to an accident and health insurance company or a corporation subject to
31 article forty-three of this chapter;
32 (B) three percent of the insurer's admitted assets at last year-end,
33 with regard to a life insurance company; or
34 (C) the lesser of three percent of the insurer's admitted assets or
35 twenty-five percent of surplus to policyholders at last year-end, with
36 regard to an insurer other than as specified in subparagraphs (A) and
37 (B) of this paragraph;
38 (2) reinsurance treaties or agreements;
39 (3) rendering of services on a regular or systematic basis; or
40 (4) any material transaction, specified by regulation, [which] that
41 the superintendent determines may adversely affect the interests of the
42 insurer's policyholders or shareholders.
43 Nothing herein contained shall be deemed to authorize or permit any
44 transaction [which] that, in the case of a non-controlled insurer, would
45 be otherwise contrary to law.
46 § 7. Subsection (a) of section 1506 of the insurance law is amended to
47 read as follows:
48 (a) No person, other than an authorized insurer, shall acquire control
49 of any domestic insurer, whether by purchase of its securities or other-
50 wise, unless:
51 (1) it gives twenty [days'] days written notice to the insurer, or
52 such shorter period of notice as the superintendent permits, of its
53 intention to acquire control, provided that the notice shall include an
54 agreement by the person seeking to acquire control that the person will
55 provide the annual report specified in section one thousand five hundred
56 three of this article for so long as control exists; and
S. 4329--A 5
1 (2) it receives the superintendent's prior approval.
2 § 8. Section 1506 of the insurance law is amended by adding a new
3 subsection (f) to read as follows:
4 (f) Any holding company seeking to divest its controlling interest in
5 a domestic insurer, in any manner, shall file with the superintendent,
6 with a copy to the insurer, notice of its proposed divestiture at least
7 thirty days prior to the cessation of control.
8 § 9. Section 1510 of the insurance law is amended by adding a new
9 subsection (d) to read as follows:
10 (d) Whenever it appears to the superintendent that any person has
11 committed a violation of section one thousand five hundred six of this
12 article that prevents the full understanding of the enterprise risk
13 posed to the insurer by the holding company system, the violation may
14 serve as an independent basis for disapproving dividends or distrib-
15 utions or as grounds for rehabilitation or liquidation pursuant to arti-
16 cle seventy-four of this chapter.
17 § 10. Section 1603 of the insurance law is amended to read as follows:
18 § 1603. Notice of intent to acquire or divest. (a) [No acquisition of
19 a majority of any corporation's outstanding common shares shall be made
20 pursuant to this article] A domestic insurer shall not acquire control
21 of any other domestic insurer, whether by purchase of its securities or
22 otherwise, unless:
23 (1) a notice of intention of such proposed acquisition shall have been
24 filed with the superintendent not less than ninety days, or such shorter
25 period as may be permitted by the superintendent, in advance of such
26 proposed acquisition[, nor shall any such acquisition be made if the
27 superintendent at any time prior thereto finds]; and
28 (2) the insurer receives the superintendent's prior approval.
29 (b) The superintendent shall disapprove such acquisition if the super-
30 intendent determines that the proposed acquisition is contrary to law or
31 determines that such proposed acquisition would be contrary to the best
32 interests of the parent insurer's policyholders or of the people of this
33 state. Only the following factors shall be considered in making the
34 foregoing determination:
35 (1) the availability of the funds or assets required for such acquisi-
36 tion;
37 (2) the fairness of any exchange of shares, assets, cash or other
38 consideration for the shares or assets to be received;
39 (3) the impact of the new operation on the parent insurer's surplus
40 and existing insurance business and the risks inherent in the parent
41 insurer's investment portfolio and operations;
42 (4) the fairness and adequacy of the financing proposed for the
43 subsidiary;
44 (5) the likelihood of undue concentration of economic power;
45 (6) whether the effect of the acquisition may be substantially to
46 lessen competition in any line of commerce in insurance or to tend to
47 create a monopoly therein; and
48 (7) whether the acquisition might result in an excessive proliferation
49 of subsidiaries [which] that would tend to unduly dilute management
50 effectiveness or weaken financial strength, or otherwise be contrary to
51 the best interests of the parent insurer's policyholders or of the
52 people of this state.
53 [(b)] (c) At any time after an acquisition the superintendent may
54 order its disposition if [he] the superintendent finds, after notice and
55 an opportunity to be heard, that its continued retention is hazardous or
56 prejudicial to the interests of the parent insurer's policyholders.
S. 4329--A 6
1 (d) Any domestic insurer seeking to divest its controlling interest in
2 another domestic insurer, in any manner, shall file with the superinten-
3 dent, with a copy to the insurer, notice of its proposed divestiture at
4 least thirty days prior to the cessation of control.
5 [(c)] (e) The contents of each notice of intention of a proposed
6 acquisition or divestiture filed hereunder and information pertaining
7 thereto shall be kept confidential, shall not be subject to subpoena and
8 shall not be made public unless after notice and opportunity to be heard
9 the superintendent determines that the interests of policyholders,
10 shareholders or the public will be served by publication.
11 § 11. The insurance law is amended by adding a new section 1604 to
12 read as follows:
13 § 1604. Registration. (a) An authorized domestic insurer shall regis-
14 ter with the superintendent within thirty days of becoming subject to
15 registration and shall amend the registration within thirty days follow-
16 ing any material change to the information provided in the registration.
17 The registration shall be in such form and shall contain such matters as
18 the superintendent prescribes. The superintendent may grant reasonable
19 extensions of the time to register.
20 (b)(1) An authorized domestic insurer, other than a domestic insurer
21 required to register as a controlled insurer pursuant to section one
22 thousand five hundred three of this chapter, shall adopt a formal enter-
23 prise risk management function and shall file an enterprise risk report
24 with the superintendent by April thirtieth of each year. The report
25 shall, to the best of the insurer's knowledge and belief, identify the
26 material risks within any subsidiary that could pose enterprise risk to
27 the insurer.
28 (2) For the purposes of this article, "enterprise risk" means any
29 activity, circumstance, event, or series of events involving one or more
30 subsidiaries of an insurer that, if not remedied promptly, is likely to
31 have a material adverse effect upon the financial condition or liquidity
32 of the insurer, including anything that would cause the insurer's risk-
33 based capital to fall into company action level as set forth in section
34 one thousand three hundred twenty-four of this chapter, or that would
35 cause further transaction of business to be hazardous to the insurer's
36 policyholders or creditors or the public.
37 § 12. Section 1608 of the insurance law is amended by adding a new
38 subsection (e) to read as follows:
39 (e) The following transactions between a domestic insurer and any
40 subsidiary may not be entered into unless the insurer has notified the
41 superintendent in writing of its intention to enter into any such trans-
42 action at least thirty days prior thereto, or with regard to reinsurance
43 treaties or agreements at least forty-five days prior thereto, or such
44 shorter period as the superintendent may permit, and the superintendent
45 has not disapproved it within such period:
46 (1) sales, purchases, exchanges, loans, extensions of credit, or
47 investments with a subsidy, provided the transactions are equal to or
48 exceed the lesser of three percent of the insurer's admitted assets or
49 twenty-five percent of surplus to policyholders at last year-end;
50 (2) loans or extensions of credit to any person who is not a subsid-
51 iary, where the insurer makes loans or extensions of credit with the
52 agreement or understanding that the proceeds of such transactions, in
53 whole or in substantial part, are to be used to make loans or extensions
54 of credit to, purchase assets of, or make investments in, any subsidiary
55 of the insurer making the loans or extensions of credit, provided the
56 transactions are equal to or exceed the lesser of three percent of the
S. 4329--A 7
1 insurer's admitted assets or twenty-five percent of surplus to policy-
2 holders at last year-end;
3 (3) reinsurance treaties or agreements with a subsidiary that the
4 insurer has not otherwise submitted to the superintendent, provided,
5 however, the insurer need not submit a copy of a reinsurance agreement
6 unless requested by the superintendent where the reinsurance premium or
7 a change in the insurer's liabilities, or the projected reinsurance
8 premium or a change in the insurer's liabilities in any of the next
9 three years, is less than five percent of the insurer's surplus to poli-
10 cyholders at last year-end. This shall include agreements that may
11 require, as consideration, the transfer of assets from an insurer to a
12 non-subsidiary, if an agreement or understanding exists between the
13 insurer and non-subsidiary that any portion of the assets will be trans-
14 ferred to one or more subsidiaries of the insurer; and
15 (4) management agreements, service contracts, tax allocation agree-
16 ments, guarantees, and all cost-sharing arrangements.
17 § 13. Section 1702 of the insurance law, as amended by chapter 526 of
18 the laws of 1987, is amended to read as follows:
19 § 1702. Meaning of "subsidiary" [and], "parent corporation" and
20 "enterprise risk"; certain types of subsidiaries defined. As used in
21 this article[, "subsidiary" (i)]: (a) "Subsidiary" means subsidiaries of
22 the types described in subsection (b) of section one thousand seven
23 hundred four of this article and subsidiaries acquired or held under
24 this article, section one thousand four hundred five or section four
25 thousand two hundred forty of this chapter, but [(ii) does] shall not
26 include a subsidiary acquired or held under section one thousand four
27 hundred four of this chapter or a subsidiary acquired or held by an
28 insurer authorized to make investments by subsection (c) of section one
29 thousand four hundred three of this chapter[; and "parent corporation"].
30 (b) "Parent corporation" means a parent corporation of a type
31 described in subsection (a), (b) or (c) of section one thousand seven
32 hundred one of this article[; "holding company operating subsidiary"].
33 (c) "Holding company operating subsidiary" means a subsidiary (other
34 than a separate account subsidiary) engaged or organized to engage in
35 either or both of the following activities [(i)](1) the ownership and
36 management of other subsidiaries, and [(ii)](2) the raising of capital
37 (debt or equity) [which] that could be loaned to, or invested in, other
38 subsidiaries or loaned to the parent corporation, provided that any such
39 subsidiary may in addition engage in the ownership and management of
40 assets authorized as investments for the parent corporation[; "invest-
41 ment subsidiary"].
42 (d) "Investment subsidiary" means a subsidiary (other than a separate
43 account subsidiary) engaged or organized to engage exclusively in the
44 ownership and management of assets (other than equity securities of
45 subsidiaries) authorized as investments for the parent corporation and
46 of other investment subsidiaries[; and "separate account subsidiary"].
47 (e) "Separate account subsidiary" means a subsidiary acquired or held
48 under section four thousand two hundred forty of this chapter.
49 (f) "Enterprise risk" means any activity, circumstance, event, or
50 series of events involving one or more subsidiaries of a parent corpo-
51 ration that, if not remedied promptly, is likely to have a material
52 adverse effect upon the financial condition or liquidity of the parent
53 corporation, including anything that would cause the parent corpo-
54 ration's risk-based capital to fall into company action level as set
55 forth in section one thousand three hundred twenty-two of this chapter,
S. 4329--A 8
1 or that would cause further transaction of business to be hazardous to
2 the insurer's policyholders or creditors or the public.
3 § 14. Section 1710 of the insurance law, as amended by chapter 805 of
4 the laws of 1984, is amended to read as follows:
5 § 1710. [Superintendent's] Divestiture of control; superintendent's
6 power to order disposition of subsidiaries.
7 (a) Any parent corporation seeking to divest its controlling interest
8 in a domestic insurer, in any manner, shall file with the superinten-
9 dent, with a copy to the insurer, notice of its proposed divestiture at
10 least thirty days prior to the cessation of control.
11 (b) In addition to the powers granted to the superintendent elsewhere
12 in this chapter (including, without limitation, [sections] section one
13 hundred nine [and three hundred twenty-seven] of this chapter and
14 section three hundred nine of the financial services law), the super-
15 intendent may, at any time, order a parent corporation to dispose of any
16 subsidiary, if the superintendent finds, after notice and an opportunity
17 to be heard, either:
18 [(i)](1) that its acquisition or continued retention is or was not
19 permitted by the provisions of this article; or
20 [(ii)](2) except in the case of a subsidiary then exempted by the
21 provisions of subsection (a) or (b) of section one thousand seven
22 hundred four of this article, that its continued retention is materially
23 adverse to the interests of the parent corporation's policyholders or
24 subscribers.
25 § 15. Section 1712 of the insurance law is amended to read as follows:
26 § 1712. Relationships and transactions between parent corporation and
27 subsidiary. (a) The business operations, corporate proceedings and
28 fiscal and accounting records of subsidiaries shall be conducted or
29 maintained so as to assure the separate legal and operating identities
30 of the parent corporation and subsidiary, but nothing herein shall
31 preclude arrangements for common management or the cooperative or joint
32 use of personnel, property, or services, otherwise consistent with this
33 chapter. All transactions between the parent corporation and its subsid-
34 iaries shall be fair and equitable, charges or fees for services
35 performed shall be reasonable and all expenses incurred and payments
36 received shall be allocated to the parent corporation on an equitable
37 basis in conformity with customary insurance accounting practices
38 consistently applied. The books, accounts and records of each party to
39 all such transactions shall be so maintained as to disclose clearly and
40 accurately the nature and details of the transactions, including such
41 accounting information as is necessary to support the reasonableness of
42 the charges or fees to the respective parties.
43 (b) The following transactions between a parent corporation and any
44 subsidiary may not be entered into unless the parent corporation has
45 notified the superintendent in writing of its intention to enter into
46 any such transaction at least thirty days prior thereto, or with regard
47 to reinsurance treaties or agreements at least forty-five days prior
48 thereto, or such shorter period as the superintendent may permit, and
49 the superintendent has not disapproved it within such period:
50 (1) sales, purchases, exchanges, loans, extensions of credit, or
51 investments with a subsidy, provided the transactions are equal to or
52 exceed:
53 (A) three percent of the parent corporation's admitted assets at last
54 year-end, with regard to a domestic life insurance company; or
55 (B) the lesser of three percent of the parent corporation's admitted
56 assets or twenty-five percent of capital and surplus at last year-end,
S. 4329--A 9
1 with regard to a domestic corporation subject to article forty-three of
2 this chapter; or
3 (2) loans or extensions of credit to any person who is not a subsid-
4 iary, where the parent corporation makes loans or extensions of credit
5 with the agreement or understanding that the proceeds of such trans-
6 actions, in whole or in substantial part, are to be used to make loans
7 or extensions of credit to, purchase assets of, or make investments in,
8 any subsidiary of the parent corporation making the loans or extensions
9 of credit, provided the transactions are equal to or exceed:
10 (A) three percent of the parent corporation's admitted assets at last
11 year-end, with regard to a domestic life insurance company; or
12 (B) the lesser of three percent of the parent corporation's admitted
13 assets or twenty-five percent of capital and surplus at last year-end,
14 with regard to a domestic corporation subject to article forty-three of
15 this chapter; or
16 (3) reinsurance treaties or agreements with a subsidiary that the
17 parent corporation has not otherwise submitted to the superintendent.
18 This shall include agreements that may require, as consideration, the
19 transfer of assets from a parent corporation to a non-subsidiary, if an
20 agreement or understanding exists between the parent corporation and
21 non-subsidiary that any portion of the assets will be transferred to one
22 or more subsidiaries of the parent corporation; and
23 (4) management agreements, service contracts, tax allocation agree-
24 ments, guarantees, and all cost-sharing arrangements.
25 § 16. The insurance law is amended by adding a new section 1717 to
26 read as follows:
27 § 1717. Registration. (a) A parent corporation shall register with the
28 superintendent within thirty days of becoming subject to registration
29 and shall amend the registration within thirty days following any mate-
30 rial change to the information provided in the registration. The regis-
31 tration shall be in such form and shall contain such matters as the
32 superintendent prescribes. The superintendent may grant reasonable
33 extensions of the time to register.
34 (b) A parent corporation, other than a parent corporation required to
35 register as a controlled insurer pursuant to section one thousand five
36 hundred three of this chapter, shall adopt a formal enterprise risk
37 management function and shall file an enterprise risk report with the
38 superintendent by April thirtieth of each year. The report shall, to the
39 best of the parent corporation's knowledge and belief, identify the
40 material risks within any subsidiary that could pose enterprise risk to
41 the parent corporation.
42 § 17. Subsection (d) of section 1110 of the insurance law, as amended
43 by chapter 431 of the laws of 2000, is amended to read as follows:
44 (d) No such corporation or association shall make or issue in this
45 state any annuity contract before obtaining a permit issued in accord-
46 ance with the provisions of this section except that if its requisite
47 reserve on its outstanding annuity agreements computed in accordance
48 with section four thousand two hundred seventeen of this chapter does
49 not exceed the amount of [five hundred thousand] one million dollars, it
50 may make gift annuity agreements in this state and shall be exempted
51 from securing a permit provided it maintains the reserve required by
52 section four thousand two hundred seventeen of this chapter and a
53 surplus of at least twenty-five per centum of such reserve. If the
54 superintendent finds, after notice and hearing, that any such corpo-
55 ration or association, having such a permit, has failed to comply with
56 the requirements of this section, [he] the superintendent may revoke or
S. 4329--A 10
1 suspend such permit or order it to cease making new annuity contracts
2 until it complies. The superintendent may, in [his] the superintendent's
3 discretion, either dispense with the requirement of annual statements by
4 such corporations or associations or accept a sworn statement by two or
5 more of its principal officers, in such form as will satisfy the super-
6 intendent that the requirements of this section are being complied with.
7 § 18. Section 1110 of the insurance law is amended by adding a new
8 subsection (f) to read as follows:
9 (f) The superintendent may, in the superintendent's discretion, exam-
10 ine any such corporation or association that is exempt from obtaining a
11 permit pursuant to subsection (d) of this section.
12 § 19. Paragraph 1 of subsection (a) of section 307 of the insurance
13 law is amended to read as follows:
14 (1) Every insurer and every fraternal benefit society [which] that is
15 authorized to do an insurance business in this state, and every pension
16 fund, retirement system or state fund [which] that is required, by any
17 law of this state, to report to the superintendent or is subject to
18 [his] the superintendent's examination, shall file in the office of the
19 superintendent, annually on or before the first day of March, a state-
20 ment, to be known as its annual statement, executed in duplicate, veri-
21 fied by the oath of at least two of its principal officers, showing its
22 condition at last year-end or, in the case of a pension fund or retire-
23 ment system, on such date in the year next preceding as the superinten-
24 dent may approve. Such statement shall be in such form and shall contain
25 such matters as the superintendent shall prescribe. The superintendent
26 may accept an electronic filing of a foreign insurer's annual statement
27 that does not contain the signatures or verification of the officers
28 provided that the foreign insurer has filed, in its state of domicile,
29 an annual statement verified by the oath of at least two of its princi-
30 pal officers. In such a situation, the officers of the foreign insurer
31 shall be deemed to have given their oath in this state.
32 § 20. Subsection (b) of section 7428 of the insurance law is amended
33 to read as follows:
34 (b) If the amount of any such real or personal property owned by, or
35 debt or claim owed by or to, such insurer does not exceed twenty-five
36 [hundred] thousand dollars, then the superintendent may sell or dispose
37 of all or any part of the real or personal property, or compromise or
38 compound the [same] debt or claim, upon such terms as [he] the super-
39 intendent may deem for the best interests of such insurer without
40 obtaining the approval of the court.
41 § 21. Subsection (g) of section 7602 of the insurance law, as amended
42 by chapter 578 of the laws of 1990, is amended to read as follows:
43 (g) "Allowed claim" means a claim [which] that has been allowed by the
44 [court] superintendent in a proceeding under article seventy-four of
45 this chapter or, if such claim exceeds twenty-five thousand dollars, has
46 been allowed by the court in a proceeding under article seventy-four of
47 this chapter, and which is based upon:
48 (1) a policy insuring property or risks located or resident in this
49 state, or
50 (2) a policy issued in this state to a resident of this state insuring
51 property or risks, located or resident outside this state but within the
52 United States, its possessions and territories, and Canada, provided
53 that, with respect to policies covered under this paragraph:
54 (A) irrespective of the amount of claim [which] that has been allowed,
55 no person shall recover any amount from this fund until such person has
56 exhausted all rights of recovery from any security fund, guaranty asso-
S. 4329--A 11
1 ciation, or the equivalent in the jurisdiction where such property or
2 risks are located or resident; and, thereafter, such person's recovery
3 from this fund, when combined with amounts recovered or recoverable from
4 any other security fund, guaranty association, or the equivalent in such
5 jurisdiction, shall not exceed the maximum limit available to a quali-
6 fied claimant for a recovery solely from such other security fund, guar-
7 anty association, or the equivalent; and
8 (B) the aggregate limit for all claims arising out of any one policy,
9 excluding claims with respect to property or risks located or resident
10 in this state, shall not exceed the lesser of the aggregate limit of the
11 policy or five million dollars.
12 § 22. This act shall take effect immediately, except that:
13 (1) sections four, eleven, and sixteen of this act shall take effect
14 on the ninetieth day after this act shall have become a law; and
15 (2) the amendments to subsection (d) of section 1505 of the insurance
16 law made by section six of this act, the amendments to section 1608 of
17 the insurance law made by section twelve of this act and the amendments
18 to section 1712 of the insurance law made by section fifteen of this act
19 shall apply only to transactions entered into on or after the effective
20 date of this act.
