New York State Assembly

 
•  Summary 
 
•  Actions 
 
•  Committee Votes 
 
•  Floor Votes 
 
•  Memo 
 
•  Text 
 
•  LFIN 
 
•  Chamber Video/Transcript 

S02679 Summary:

S02679 Actions:

S02679 Committee Votes:

S02679 Floor Votes:

S02679 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2679--B
            Cal. No. 1180
 
                               2023-2024 Regular Sessions
 
                    IN SENATE
 
                                    January 24, 2023
                                       ___________
 
        Introduced  by  Sen. BRESLIN -- 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  committee -- reported favorably from said committee, ordered
          to first and second report, ordered to a third  reading,  amended  and
          ordered reprinted, retaining its place in the order of third reading
 
        AN  ACT  in  relation to authorizing and empowering CREF to combine with
          TIAA, with TIAA  continuing  in  existence  as  the  surviving  entity
          following  such  combination  and  with CREF ceasing to be a corporate
          entity; and to repeal chapter 124 of the laws  of  1952,  relating  to
          incorporating  College Retirement Equities Fund for the benefit of the
          teaching profession
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Chapter 124 of the laws of 1952, relating to incorporating
     2  College Retirement Equities Fund for the benefit of the teaching profes-
     3  sion, is REPEALED.
     4    § 2. Definitions. For purposes of this act the following  terms  shall
     5  have the following meanings:
     6    (a) "Attorney General" shall mean the attorney general of the State of
     7  New York;
     8    (b)  "CREF"  shall  mean  the College Retirement Equities Fund, formed
     9  pursuant to chapter 124 of the laws of 1952 as a companion  organization
    10  to TIAA for the issuance of variable annuity contracts;
    11    (c) "CREF Board of Governors" shall mean the individuals designated as
    12  governors  of CREF, pursuant to chapter 124 of the laws of 1952, who are
    13  the sole members of CREF;
    14    (d) "CREF Board of Trustees" shall mean, collectively, the trustees of
    15  CREF as appointed in accordance with applicable law  and  the  organiza-
    16  tional documents of CREF;
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07358-04-3
        S. 2679--B                          2
 
     1    (e)  "Plan of Combination" shall mean, collectively, the agreement and
     2  plan of combination of TIAA and CREF adopted and approved in  accordance
     3  with the provisions of this act to effectuate the combination;
     4    (f)  "Superintendent"  shall  mean  the superintendent of the New York
     5  state department of financial services;
     6    (g) "TIAA" shall mean the Teachers Insurance and  Annuity  Association
     7  of  America,  an  insurance  company  formed pursuant to the laws of New
     8  York;
     9    (h) "TIAA Board of Governors" shall mean the corporation formed pursu-
    10  ant to chapter 880 of the laws of 1937, which is the sole owner  of  the
    11  issued and outstanding stock of TIAA;
    12    (i) "TIAA Board of Trustees" shall mean, collectively, the trustees of
    13  TIAA  as  appointed  in accordance with applicable law and the organiza-
    14  tional documents of TIAA; and
    15    (j) "TIAA Separate Account" shall mean the separate  account  of  TIAA
    16  created in connection with the Plan of Combination.
    17    §  3.    (a)  Subject  to the provisions of this act and the terms set
    18  forth in  the  Plan  of  Combination,  CREF  is  hereby  authorized  and
    19  empowered to combine with TIAA, with TIAA continuing in existence as the
    20  surviving  entity following such combination and with CREF ceasing to be
    21  a corporate entity. TIAA shall  continue  to  be  an  insurance  company
    22  established  pursuant  to  the  insurance  law of the State of New York,
    23  operating without profit to TIAA or its stockholders. The TIAA  Separate
    24  Account  shall be subject to the insurance law of the State of New York,
    25  and shall also operate without profit to itself, TIAA, or TIAA's  stock-
    26  holders.  Notwithstanding the foregoing, neither the combination nor any
    27  transactions contemplated by the Plan of Combination shall  cause  TIAA,
    28  as  the  surviving entity, or the TIAA Separate Account, to be or become
    29  subject to the not-for-profit corporation law. The TIAA Board of  Gover-
    30  nors shall remain subject to the not-for-profit corporation law.
    31    (b)  Such  combination  shall be deemed a merger under the laws of the
    32  state of New York, including any laws applicable to insurance  companies
    33  or not-for-profit corporations.
    34    (c)  The  following  procedures shall apply with respect to the review
    35  and approval of the Plan of Combination:
    36    (1) The Plan of Combination shall contain the proposed  terms  of  the
    37  combination, including any allocation of anticipated tax benefits of the
    38  combination,  and, to the extent applicable to the combination, informa-
    39  tion which would be included in a plan of merger pursuant  to  paragraph
    40  (a) of section 902 of the not-for-profit corporation law.
    41    (2) Prior to adopting the Plan of Combination, the TIAA Board of Trus-
    42  tees  and  the  CREF  Board  of  Trustees shall each make an independent
    43  determination that the proposed combination is fair, reasonable  and  in
    44  their respective corporation's best interest.
    45    (3)  The  TIAA  Board of Trustees and the CREF Board of Trustees, upon
    46  approving the Plan of Combination, shall submit such Plan of Combination
    47  to a stockholder or member vote, as follows:
    48    (i) In the case of CREF, the Plan of Combination shall be approved  by
    49  the  vote of two-thirds of the individual governors of the CREF Board of
    50  Governors, as the members of CREF, in accordance with the procedures set
    51  forth in section 903 of the not-for-profit corporation law;
    52    (ii) In the case of TIAA, the Plan of Combination shall be approved by
    53  the TIAA Board of Governors, as the sole stockholder  of  TIAA,  by  the
    54  vote  of  two-thirds  of  the  individual governors of the TIAA Board of
    55  Governors; and
        S. 2679--B                          3
 
     1    (iii) Notice of the meeting at which the vote on the Plan of  Combina-
     2  tion  will  take  place shall be provided to each individual governor of
     3  the CREF Board of Governors and to the TIAA Board of Governors, as  sole
     4  stockholder  of  TIAA. A copy of the Plan of Combination shall accompany
     5  such notice.
     6    (4)  Following  the receipt of the approval of the members of CREF and
     7  the sole stockholder of TIAA, TIAA and CREF shall submit to the Attorney
     8  General the following documents:
     9    (i) a certified copy of the adopted Plan of Combination;
    10    (ii) an affidavit from a duly authorized officer of each of  TIAA  and
    11  CREF  certifying that all necessary board approvals to adopt the Plan of
    12  Combination have been obtained, which shall include a statement  affirm-
    13  ing  (A)  that  the Plan of Combination was approved at a meeting of the
    14  Board of Trustees duly called and held by the vote  required  under  the
    15  applicable corporation's charter, by-laws or other governing instrument,
    16  (B) the number of trustees present at such meeting, (C) the total number
    17  of  trustees  on the board, (D) the requirements for quorum, and (E) the
    18  final vote count for and against adoption of the Plan of Combination  at
    19  such meeting. A copy of the resolution approving the Plan of Combination
    20  shall be attached as an exhibit to the affidavit;
    21    (iii)  an affidavit from a duly authorized officer of each of TIAA and
    22  CREF certifying that all necessary stockholder or member approvals  have
    23  been  obtained,  including (A) in the case of CREF, a statement that the
    24  Plan of Combination has been approved by the vote of not less than  two-
    25  thirds  of  the  individual governors of the CREF Board of Governors, as
    26  the members of CREF, together with a  copy  of  the  resolution  of  the
    27  members  approving  the  Plan of Combination; (B) in the case of TIAA, a
    28  statement that the Plan of Combination has been  approved  by  the  TIAA
    29  Board  of  Governors,  as the sole stockholder of TIAA, by a vote of not
    30  less than two-thirds of the individual governors, together with  a  copy
    31  of the stockholder resolution approving the Plan of Combination; and (C)
    32  in  the  case  of  each  of TIAA and CREF, a statement whether any votes
    33  against adoption of the resolution approving  the  Plan  of  Combination
    34  were cast at the meeting at which each such resolution was adopted;
    35    (iv)  copies  of the charters, by-laws and any other governing instru-
    36  ments, including amendments, for each of TIAA and CREF; and
    37    (v) a statement that neither TIAA  nor  CREF,  respectively,  has  any
    38  charitable funds or other charitable assets, whether restricted or unre-
    39  stricted,  that will be required to be returned, transferred or conveyed
    40  to any third party by reason of the combination.
    41    (d) If it shall appear, to the satisfaction of the  Attorney  General,
    42  that  (i)  the  terms  and  conditions  of  the combination are fair and
    43  reasonable to CREF (as the non-surviving corporation) and to the  annui-
    44  tants,  certificate-holders  and participants of both TIAA and CREF, and
    45  (ii) the procedural requirements set forth in subdivision  (c)  of  this
    46  section have been satisfied, the Attorney General shall approve the Plan
    47  of Combination.
    48    (e) Upon obtaining the respective approvals of the members of CREF and
    49  the sole stockholder of TIAA, the Plan of Combination shall be submitted
    50  to  the  Superintendent,  for review and approval in accordance with the
    51  procedures set forth in section 7105 of the insurance law.
    52    (f) Thereafter, once all other required regulatory approvals to effec-
    53  tuate the combination have been obtained, TIAA shall  file  a  certified
    54  copy  of  the Plan of Combination, with the approvals of the Superinten-
    55  dent and the Attorney General affixed thereto,  in  the  office  of  the
        S. 2679--B                          4
 
     1  clerk of the county of New York. Upon the completion of such filing, the
     2  combination shall become effective.
     3    § 4. (a) At the effective time of and pursuant to the Plan of Combina-
     4  tion,  all assets and liabilities of CREF including causes of action and
     5  defenses thereto, shall vest by operation of law in TIAA, and all  vari-
     6  able  annuity  contracts and certificates issued by CREF and in force at
     7  the effective time of the combination, shall be and become TIAA variable
     8  annuity contracts and certificates as  of  the  effective  time  of  the
     9  combination; provided, however, that at the effective time of the combi-
    10  nation:  (i)  without further act or deed, the assets and liabilities of
    11  CREF relating to the outstanding variable annuity contracts and  certif-
    12  icates  of CREF shall immediately be assets and liabilities of and allo-
    13  cated to the TIAA Separate Account without such assets becoming  general
    14  account  assets  of TIAA; and (ii) each investment account of CREF imme-
    15  diately prior to the combination shall comprise  an  investment  sub-ac-
    16  count  of  the TIAA Separate Account, with the assets and liabilities of
    17  each such investment account vesting immediately and  directly  in  that
    18  investment sub-account.
    19    (b)  At  the  effective time, TIAA shall assume the obligations of all
    20  CREF contracts and certificates, and all holders of CREF  contracts  and
    21  certificates shall be notified of the combination.
    22    (c)  At all times the assets of the TIAA Separate Account, and of each
    23  investment sub-account, shall be  segregated  from  the  assets  of  the
    24  general  account of TIAA and any other TIAA separate account and invest-
    25  ment sub-account. That portion  of  the  assets  of  the  TIAA  Separate
    26  Account,  and of each investment sub-account, not exceeding the reserves
    27  and other contract liabilities with respect to the TIAA Separate Account
    28  and each investment sub-account, shall not be  chargeable  with  liabil-
    29  ities  arising  out of any other business of TIAA. The income, gains and
    30  losses, whether or not realized, from assets allocated to the TIAA Sepa-
    31  rate Account, and each investment sub-account, shall be credited  to  or
    32  charged  against  the  TIAA Separate Account and each investment sub-ac-
    33  count without regard to other income, gains or losses of TIAA.
    34    (d) Any tax benefits realized as a result of the Plan  of  Combination
    35  shall  be  utilized  for the financial benefit of TIAA and TIAA Separate
    36  Account participants and shall not be used to determine, pay or increase
    37  the amount of compensation paid to officers, trustees, or employees.
    38    § 5. This act shall take effect immediately; provided,  however,  that
    39  section  one  of this act shall take effect at the effective time of the
    40  combination of TIAA and CREF pursuant to this act; and provided further,
    41  that the superintendent of the New York state  department  of  financial
    42  services  shall notify the legislative bill drafting commission upon the
    43  occurrence of such effective time in order that the commission may main-
    44  tain an accurate and timely effective database of the official  text  of
    45  the  laws  of  the  State of New York in furtherance of effectuating the
    46  provisions of section 44 of the legislative law and section 70-b of  the
    47  public officers law.