Creates the insurer fund for underserved neighborhood/rural area development corporation; provides that such corporation shall operate in accordance with a plan of operation; provides that the corporation shall be governed by a board of sixteen directors; requires certain insurers to invest a portion of their assets in underserved neighborhoods and rural areas of the state.
STATE OF NEW YORK
________________________________________________________________________
4632
2011-2012 Regular Sessions
IN ASSEMBLY
February 4, 2011
___________
Introduced by M. of A. P. RIVERA, RAMOS, SPANO, CAMARA, SCHROEDER,
PEOPLES-STOKES, COOK -- Multi-Sponsored by -- M. of A. ARROYO,
BOYLAND, GANTT, HEASTIE, JEFFRIES, V. LOPEZ, McKEVITT, ORTIZ, PERRY,
J. RIVERA, TITONE, TITUS -- read once and referred to the Committee on
Insurance
AN ACT to amend the insurance law and the public authorities law, in
relation to the creation of the insurer fund for underserved
neighborhood/rural area development corporation
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 1415
2 to read as follows:
3 § 1415. Insurer fund for underserved neighborhood/rural area develop-
4 ment. (a) For the purposes of this section:
5 (1) "IFUND Corporation", "corporation" or "IFUND" shall mean the
6 insurer fund for underserved neighborhood/rural area development corpo-
7 ration;
8 (2) "qualified investment" shall include any loan, the purchase of any
9 loan, the purchase of any asset, the extension of credit and the
10 purchases of equity:
11 (A) to or from community development corporations, non-profit interme-
12 diaries qualified under section 501(c)(3) of the internal revenue code
13 which package loans and administer loan funds and qualified community
14 development entities as defined in section 450(a) of the internal reven-
15 ue code and regulations hereunder;
16 (B) to finance or facilitate the financing of single- or multi-family
17 housing affordable to persons of low and moderate income, family farms,
18 small businesses and other community development activities approved by
19 the superintendent that revitalize or stabilize underserved areas,
20 certified capital companies as defined in section eleven of the tax law,
21 community service facilities, including child care, educational, health
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00278-01-1
A. 4632 2
1 or social services targeting underserved areas, the development, estab-
2 lishment or operation of health information technology, and the environ-
3 mental cleanup or redevelopment of industrial sites in an underserved
4 area; and
5 (C) in New York state and local government agency bonds that primarily
6 benefit underserved areas in an amount that, in the aggregate, does not
7 exceed ten percent of the investment capital of the corporation;
8 (3) "low and moderate income" shall mean persons or families which
9 have incomes that do not exceed eighty percent of the median income for
10 the metropolitan statistical area, if a person or family is located in
11 such an area, or the statewide nonmetropolitan statistical area, if a
12 person or family is located outside a metropolitan statistical area;
13 (4) "member" shall mean a member of the corporation;
14 (5) "underserved areas" shall mean: (A) areas of the state which qual-
15 ify as "distressed" or "highly distressed" pursuant to the general
16 municipal law; or (B) areas of the state with a majority of residents of
17 low or moderate income;
18 (6) "family farm" shall mean a farm which is the primary source of
19 income for individuals residing at the same address and related by
20 consanguinity, affinity or adoption and which has gross sales of farm
21 products of less than five hundred thousand dollars annually;
22 (7) "small businesses" shall have the same meaning as described in
23 section one hundred thirty-one of the economic development law;
24 (8) "operating expenses" shall mean the expenses the corporation
25 incurs in the accomplishment of its purpose;
26 (9) "investment capital" shall mean the funds contributed to the
27 corporation by its members in order to make qualified investments pursu-
28 ant to its plan of operations; and
29 (10) "health information technology" shall mean technology used to:
30 electronically share patient information; improve care coordination;
31 promote efficiencies in the delivery of, or payment for, care; or
32 enhance outcomes, patient self-management and/or quality, or other means
33 of improving interoperability and/or interconnectedness of health care
34 providers, consumers and/or payers.
35 (b)(1) The insurer fund for underserved neighborhood/rural area devel-
36 opment corporation is hereby established consisting of all insurers
37 authorized to write and engaged in writing, within this state, on a
38 direct basis, any of the types of insurance described in paragraphs one
39 through ten, twelve through seventeen and nineteen through thirty of
40 subsection (a) of section one thousand one hundred thirteen of this
41 chapter. Every such insurer shall be and shall remain a member of the
42 corporation as a condition of its authority to continue to transact such
43 types of insurance in this state and shall contribute its proportional
44 share of the investment capital and operating expenses of the corpo-
45 ration.
46 (2) The corporation shall be a for-profit corporation constituting a
47 legal entity separate and distinct from its members. All funds and
48 reserves of the corporation shall be separately held and invested. It
49 shall maintain complete accounts of all monies received and all losses
50 and expenses incurred in connection with its operations.
51 (3) The purpose of the corporation shall be to promote the economic
52 welfare and health and well-being of the citizens of this state through
53 qualified investments in underserved areas of the state.
54 (c) (1) The corporation shall operate in accordance with a plan of
55 operation, which provides for the accomplishment of its purpose. On or
A. 4632 3
1 before April first, two thousand twelve, the corporation shall submit
2 such plan of operations for approval by the superintendent.
3 (2) Such plan shall include:
4 (A) a preliminary assessment of all members for initial operating
5 expenses necessary to commence operations, establish necessary facili-
6 ties and manage the affairs of the corporation;
7 (B) ongoing mechanisms for the assessment and collection of propor-
8 tional member contributions towards the operating expenses and invest-
9 ment capital of the corporation pursuant to paragraphs three and four of
10 this subsection and the payment or distribution of income on such
11 investments to members;
12 (C) a method for the solicitation, review and selection of qualified
13 investments by the corporation which shall include, but not be limited
14 to:
15 (i) the convening of six meetings annually in local communities,
16 (ii) the development of an infrastructure to effectively disperse and
17 deploy investment capital throughout the state,
18 (iii) the hiring of staff to work with community groups to identify
19 local investment opportunities, and
20 (iv) the identification of unmet insurance needs in underserved areas
21 and the development of strategies to deliver, provide, develop, market
22 or tailor insurance products to meet those needs through the efforts of
23 the members of the corporation;
24 (D) a process, subject to approval by the superintendent, by which
25 members may apply for and receive a credit against required investment
26 capital contributions for qualified investments made directly rather
27 than through the corporation;
28 (E) annual goals for the commitment of a significant amount of invest-
29 ment capital;
30 (F) a process, subject to approval by the superintendent, under which
31 foreign members of the corporation may apply for and receive a credit
32 against required investment capital contributions for a qualified
33 investment it made in its state of domicile either directly or through
34 an entity formed for the purpose of making qualified investments;
35 (G) a means to publicize the purpose of the corporation in underserved
36 areas and among entities which invest in underserved areas, and with
37 federal and state agencies engaged in affordable housing production and
38 economic revitalization activities; and
39 (H) a corporate fiscal year that commences on July first of each year.
40 (3) Every member of the corporation shall participate in its operating
41 expenses in the proportion that the net direct premiums of the member
42 written during the preceding calendar year bears to the aggregate net
43 direct premiums written in this state by all members of the corporation.
44 Each member's participation in the corporation shall be determined annu-
45 ally on the basis of such net direct premiums written during the preced-
46 ing calendar year, as reported in the annual statements and other
47 reports filed by the member with the superintendent.
48 (4) (A) For the fiscal year of the corporation beginning July first,
49 two thousand twelve, each member shall contribute to the investment
50 capital of the corporation an amount not less than an amount equal to
51 one hundred million dollars multiplied by a fraction, the numerator of
52 which is the capital and surplus or surplus to policyholders maintained
53 by such member for the preceding calendar year and the denominator of
54 which is the aggregate capital and surplus or surplus to policyholders
55 maintained by all of the members of the corporation for the preceding
56 calendar year.
A. 4632 4
1 (B) For the fiscal year of such corporation beginning July first, two
2 thousand thirteen, each member shall contribute to the investment capi-
3 tal of the corporation an amount not less than two hundred fifty million
4 dollars multiplied by the fraction described in subparagraph (A) of this
5 paragraph. For all fiscal years commencing after July first, two thou-
6 sand fourteen, each member shall contribute an amount not less than the
7 same fraction described in subparagraph (A) of this paragraph multiplied
8 by, at the discretion of the board of directors of the corporation, (i)
9 five hundred million dollars; or (ii) one percent of the aggregate net
10 direct premiums written by all of the members of the corporation in the
11 preceding calendar year; or (iii) five one-hundredths of one percent of
12 the capital and surplus or surplus to policyholders of all of the
13 members of the corporation in the preceding calendar year. The corpo-
14 ration may request from the superintendent, and if approved by the
15 superintendent, may adopt in its by-laws and plan of operations, stand-
16 ards which establish a minimum amount of capital and surplus or surplus
17 to policyholders for participation in the corporation. The superinten-
18 dent may also waive participation for an insurer otherwise obligated to
19 participate as a member of the corporation, if the superintendent deter-
20 mines that the financial condition of the insurer is such that partic-
21 ipation in the corporation would be detrimental to the policyholders of
22 the insurer.
23 (d) (1) The corporation shall be governed by a board of sixteen direc-
24 tors. The governor, or his or her designee, the speaker of the assembly,
25 or his or her designee, and the temporary president of the senate, or
26 his or her designee, shall serve as ex-officio members. Eight directors,
27 four representing insurers engaged in transacting the types of insurance
28 described in paragraphs one and two of subsection (a) of section one
29 thousand one hundred thirteen of this chapter and four representing
30 insurers engaged in transacting other types of insurance described in
31 such subsection, shall be elected by cumulative voting by all the
32 members of the corporation, whose votes shall be weighted in accordance
33 with each member's net direct premiums written during the preceding
34 calendar year. Five directors shall represent consumers and shall have
35 demonstrated expertise in community development and investments. Of
36 these five directors, one shall be appointed by the governor, two shall
37 be appointed by the temporary president of the senate and two shall be
38 appointed by the speaker of the assembly.
39 (2) The directors shall serve without compensation but shall be reim-
40 bursed for their actual and necessary expenses incurred in the perform-
41 ance of their duties under this article.
42 (e) (1) The corporation shall annually file a statement in the office
43 of the superintendent and with the governor, the speaker of the assembly
44 and the temporary president of the senate on or before the first day of
45 September. The statement shall be in a form approved by and contain
46 information prescribed by the superintendent with respect to its trans-
47 actions, condition, operations and affairs during the preceding year and
48 shall be made available to the public electronically and in published
49 form at no cost.
50 (2) The superintendent may, at any time, require the corporation to
51 furnish additional information with respect to its transactions, condi-
52 tion or any matter connected therewith which he or she considers to be
53 material and which will assist him or her in evaluating the scope, oper-
54 ation and impact of the corporation's investments and shall perform, or
55 arrange for the performance of, an audit of the corporation's affairs on
56 an annual basis.
A. 4632 5
1 § 2. Subdivision 1 of section 2426 of the public authorities law, as
2 amended by chapter 354 of the laws of 1984, is amended to read as
3 follows:
4 1. "Financial institution". Any bank, trust company, national bank,
5 savings bank, state or federal savings and loan association, or state or
6 federal credit union, insurance company, pension fund or retirement
7 system of any corporation, association, or any other entity which is
8 owned or controlled by any one or more of the above, provided the same
9 is supervised by or responsible to any agency of the federal government,
10 the state, any department thereof or the governing body of any city,
11 town or village of the state or any other entity approved by the agency
12 or any one or more of the above when lawfully acting as a trustee or
13 otherwise in a fiduciary capacity. The term "financial institution"
14 shall also include the New York state housing finance agency and the New
15 York state urban development corporation, the New York city housing
16 development corporation, the New York city department of housing preser-
17 vation and development, the insurer fund for underserved
18 neighborhood/rural area development corporation and any person who is
19 approved as a mortgage lender by the federal housing administration for
20 purposes of insurance issued by such administration or licensed by the
21 state of New York as a mortgage banker.
22 § 3. The opening paragraph of subdivision 2 of section 2428 of the
23 public authorities law, as amended by chapter 354 of the laws of 1984,
24 is amended to read as follows:
25 The agency shall limit its insurance on a rehabilitation or preserva-
26 tion loan to an amount not in excess of fifty per centum of the
27 outstanding principal indebtedness, provided, however, that the agency
28 may insure an amount not in excess of seventy-five per centum of the
29 outstanding principal indebtedness of a rehabilitation loan if it shall
30 find, pursuant to rules or regulations which it shall establish that the
31 extent of rehabilitation is sufficient to justify such additional insur-
32 ance, provided further, however, that the agency may insure an amount
33 equal to the full outstanding principal indebtedness when the loan has
34 been made by a public benefit corporation of the state of New York which
35 public benefit corporation has issued or will issue bonds or notes, some
36 or all of the proceeds of which bonds or notes were used or will be used
37 to make such loan, or when the loan has been made by a public employee
38 pension fund or when a qualified investment is made by the insurer fund
39 for underserved neighborhood/rural area development corporation.
40 § 4. This act shall take effect immediately.
