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A07987 Summary:

A07987 Actions:

A07987 Committee Votes:

Committee:INSURANCE   Chair:Cahill      
DATE:02/16/2022AYE/NAY:22/0  Action: Favorable         
Cahill
Aye
Blankenbush
Aye
Cook
Aye
Hawley
Aye
Pretlow
Aye
Byrne
Aye
Rivera
Excused
Schmitt
Aye
Cymbrowitz
Aye
Palmesano
Aye
Lavine
Aye
DiPietro
Absent
Steck
Aye
Gandolfo
Aye
Dilan
Aye
Hunter
Aye
Niou
Excused
Rosenthal
Aye
Stern
Aye
McDonald
Aye
Jacobson
Aye
Williams
Aye
Meeks
Aye
Forrest
Aye
Anderson
Aye

A07987 Floor Votes:

A07987 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7987
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                      June 4, 2021
                                       ___________
 
        Introduced by M. of A. CUSICK -- read once and referred to the Committee
          on Insurance
 
        AN  ACT  to  amend the insurance law, the public authorities law and the
          tax law, in relation to authorizing the power authority of  the  state
          of New York to form a pure captive insurance company

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subsections (e) and (g) of section 7002  of  the  insurance
     2  law,  as amended by chapter 188 of the laws of 2003, are amended to read
     3  as follows:
     4    (e) "Industrial insured" means an insured:
     5    (1) whose net worth exceeds one hundred million dollars;
     6    (2) who is a member of  a  holding  company  system  whose  net  worth
     7  exceeds one hundred million dollars;
     8    (3) who is the metropolitan transportation authority and its statutory
     9  subsidiaries.  When  filing an application to form a pure captive insur-
    10  ance company the  metropolitan  transportation  authority  shall  submit
    11  written  notice  of such filing to the governor, the temporary president
    12  of the senate and the speaker of the assembly; [or]
    13    (4) who is the power authority of the state of New York and any statu-
    14  tory subsidiary thereof. When filing  an  application  to  form  a  pure
    15  captive  insurance  company  the  power  authority  shall submit written
    16  notice of such filing to the governor, the temporary  president  of  the
    17  senate and the speaker of the assembly; or
    18    (5)  who  is  a  city  with  a population of one million or more. When
    19  filing an application to form a pure captive insurance company,  a  city
    20  with  a population of one million or more shall submit written notice of
    21  such filing to the governor, the temporary president of the  senate  and
    22  the speaker of the assembly.
    23    (g)  "Industrial insured group" means any group of unaffiliated indus-
    24  trial insureds that are engaged in  similar  or  related  businesses  or

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD12024-01-1
        A. 7987                             2
 
     1  activities,  however,  the  metropolitan  transportation  authority, the
     2  power authority of the state of New York and  any  statutory  subsidiary
     3  thereof and cities with a population of one million or more shall not be
     4  a member of an industrial insured group, and that collectively:
     5    (1)  own,  control  or  hold with power to vote all of the outstanding
     6  voting shares of stock of a group captive insurance company incorporated
     7  as a stock insurer; or
     8    (2) represent one hundred percent of the voting  members  of  a  group
     9  captive insurance company organized as a mutual insurer.
    10    § 2. Section 1005 of the public authorities law is amended by adding a
    11  new subdivision 28 to read as follows:
    12    28.  The  authority  may  establish  a  subsidiary corporation for the
    13  purpose of forming a pure  captive  insurance  company  as  provided  in
    14  section  seven  thousand  two  of the insurance law. The members of such
    15  subsidiary corporation of the authority shall be the same persons  hold-
    16  ing  the offices of members of the authority.  The employees of any such
    17  subsidiary corporation, except those  who  are  also  employees  of  the
    18  authority, shall not be deemed employees of the authority.
    19    §  3.  Subdivision  (a)  of section 1500 of the tax law, as amended by
    20  section 21 of part A of chapter 59 of the laws of 2014,  is  amended  to
    21  read as follows:
    22    (a)  The  term "insurance corporation" includes a corporation, associ-
    23  ation, joint stock company or association, person, society,  aggregation
    24  or  partnership,  by  whatever  name known, doing an insurance business,
    25  and, notwithstanding the provisions of section fifteen hundred twelve of
    26  this article, shall include (1) a risk retention  group  as  defined  in
    27  subsection  (n)  of section five thousand nine hundred two of the insur-
    28  ance law, (2) the state insurance fund and (3)  a  corporation,  associ-
    29  ation,  joint stock company or association, person, society, aggregation
    30  or partnership doing an insurance business as a member of the  New  York
    31  insurance  exchange described in section six thousand two hundred one of
    32  the  insurance  law.  The  definition  of  the  "state  insurance  fund"
    33  contained  in  this  subdivision  shall  be limited in its effect to the
    34  provisions of this article and the related provisions  of  this  chapter
    35  and  shall  have  no  force  and  effect other than with respect to such
    36  provisions. The  term  "insurance  corporation"  shall  also  include  a
    37  captive insurance company doing a captive insurance business, as defined
    38  in  subsections (c) and (b), respectively, of section seven thousand two
    39  of the insurance law; provided, however, "insurance  corporation"  shall
    40  not include the metropolitan transportation authority, the power author-
    41  ity of New York or any statutory subsidiary thereof, or a public benefit
    42  corporation  or not-for-profit corporation formed by a city with a popu-
    43  lation of one million or more pursuant  to  subsection  (a)  of  section
    44  seven  thousand  five  of  the insurance law, each of which is expressly
    45  exempt from the payment of fees, taxes or assessments, whether state  or
    46  local; and provided further "insurance corporation" does not include any
    47  combinable  captive  insurance company. The term "insurance corporation"
    48  shall also include an unauthorized  insurer  operating  from  an  office
    49  within  the  state,  pursuant  to  paragraph  five  of subsection (b) of
    50  section one thousand one hundred one and subsection (i) of  section  two
    51  thousand one hundred seventeen of the insurance law. The term "insurance
    52  corporation" also includes a health maintenance organization required to
    53  obtain a certificate of authority under article forty-four of the public
    54  health law.
        A. 7987                             3
 
     1    §  4.  Subdivision (a) of section 1502-b of the tax law, as amended by
     2  section 22 of part A of chapter 59 of the laws of 2014,  is  amended  to
     3  read as follows:
     4    (a) In lieu of the taxes and tax surcharge imposed by sections fifteen
     5  hundred  one, fifteen hundred two-a, fifteen hundred five-a, and fifteen
     6  hundred ten of this article, every captive insurance company licensed by
     7  the superintendent of financial services pursuant to the  provisions  of
     8  article seventy of the insurance law, other than the metropolitan trans-
     9  portation  authority,  the  power authority of New York or any statutory
    10  subsidiary thereof, and a public benefit corporation  or  not-for-profit
    11  corporation  formed  by  a city with a population of one million or more
    12  pursuant to subsection (a) of section seven thousand five of the  insur-
    13  ance  law,  each  of which is expressly exempt from the payment of fees,
    14  taxes or assessments whether state or local, and other  than  combinable
    15  captive  insurance  company,  shall, for the privilege of exercising its
    16  corporate franchise, pay a tax on (1) all gross  direct  premiums,  less
    17  return  premiums  thereon,  written on risks located or resident in this
    18  state and (2) all assumed reinsurance  premiums,  less  return  premiums
    19  thereon, written on risks located or resident in this state. The rate of
    20  the  tax  imposed  on  gross direct premiums shall be four-tenths of one
    21  percent on all or any part of the first twenty million dollars of premi-
    22  ums, three-tenths of one percent on all or any part of the second twenty
    23  million dollars of premiums, two-tenths of one percent  on  all  or  any
    24  part  of  the third twenty million dollars of premiums, and seventy-five
    25  thousandths of one percent on each dollar of  premiums  thereafter.  The
    26  rate  of  the  tax  on assumed reinsurance premiums shall be two hundred
    27  twenty-five thousandths of one percent on all or any part of  the  first
    28  twenty million dollars of premiums, one hundred and fifty thousandths of
    29  one  percent  on all or any part of the second twenty million dollars of
    30  premiums, fifty thousandths of one percent on all or  any  part  of  the
    31  third  twenty million dollars of premiums and twenty-five thousandths of
    32  one percent on each dollar of premiums thereafter. The  tax  imposed  by
    33  this  section  shall  be  equal to the greater of (i) the sum of the tax
    34  imposed on gross direct premiums and the tax imposed on assumed reinsur-
    35  ance premiums or (ii) five thousand dollars.
    36    § 5. This act shall take effect immediately.