STATE OF NEW YORK
________________________________________________________________________
6966
IN SENATE
April 9, 2014
___________
Introduced by Sens. SEWARD, GRIFFO -- (at request of the Department of
Financial Services) -- read twice and ordered printed, and when print-
ed to be committed to the Committee on Insurance
AN ACT to amend the insurance law, in relation to adding additional
compliance measures for certain health maintenance organizations,
expanding the definition of a domestic insurer and the applicability
of risk-based capital for life insurance and health maintenance organ-
izations (Part A); to amend the insurance law, in relation to extend-
ing rate periods for certain motor vehicle insurance rates, adding an
additional date for the superintendent to collect, analyze and compile
periodic reports regarding certain property/casualty insurance poli-
cies, extending the date for exemptions on certain property/casualty
insurance policies, and extending certain rate periods and in relation
to extending the authority of the New York property and insurance
underwriting association (Part B); to amend chapter 322 of the laws of
2007, amending the banking law relating to the power of banks, private
bankers, trust companies, savings banks, savings and loan associ-
ations, credit unions and foreign banking corporations to exercise the
rights of national banks, federal savings associations, federal credit
unions and federal branches and agencies of foreign banks, in relation
to the effectiveness of certain provisions of such chapter; and to
amend chapter 3 of the laws of 1997, amending the banking law and the
insurance law relating to authorizing the banking board to permit
banks and trust companies to exercise the rights of national banks, in
relation to the effectiveness of certain provisions of such chapter
(Part C); and to amend chapter 507 of the laws of 2009 amending the
real property actions and proceedings law and other laws relating to
foreclosure actions on home mortgage loans, in relation to extending
certain provisions of such chapter (Part D)
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act enacts into law components of legislation relating
2 to the regulation of health maintenance organizations. Each component
3 is wholly contained within a Part identified as Parts A through D. The
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14111-02-4
S. 6966 2
1 effective date for each particular provision contained within such Part
2 is set forth in the last section of such Part. Any provision in any
3 section contained within a Part, including the effective date of the
4 Part, which makes a reference to a section "of this act", when used in
5 connection with that particular component, shall be deemed to mean and
6 refer to the corresponding section of the Part in which it is found.
7 Section three of this act sets forth the general effective date of this
8 act.
9 PART A
10 Section 1. Subsection (a) of section 1109 of the insurance law, as
11 amended by chapter 246 of the laws of 2005, is amended to read as
12 follows:
13 (a) An organization complying with the provisions of article forty-
14 four of the public health law may operate without being licensed under
15 this chapter and without being subject to any provisions of this chap-
16 ter, except: (1) to the extent that such organization must comply with
17 the provisions of this chapter by virtue of such article, and (2) the
18 provisions of sections three hundred eight, [three hundred thirteen,
19 three hundred thirty-two,] one thousand three hundred one, one thousand
20 three hundred two, one thousand three hundred seven, one thousand three
21 hundred twenty-two, with regard to health maintenance organizations that
22 are domiciled in this state and certified or operating in at least one
23 other state, two thousand one hundred three, two thousand one hundred
24 twelve, two thousand one hundred fourteen, two thousand one hundred
25 fifteen, two thousand one hundred seventeen, two thousand one hundred
26 twenty-three, two thousand six hundred eight-a, two thousand six hundred
27 twelve, three thousand two hundred twenty-four-a, four thousand three
28 hundred eight, four thousand three hundred seventeen, four thousand
29 three hundred eighteen, four thousand three hundred twenty, four thou-
30 sand three hundred twenty-one, four thousand three hundred twenty-two
31 and four thousand three hundred twenty-three of this chapter.
32 § 2. The section heading of section 1322 of the insurance law, as
33 added by chapter 215 of the laws of 1993, is amended to read as follows:
34 Risk-based capital for life [and] insurance companies, accident and
35 health insurance companies, corporations organized pursuant to article
36 forty-three of this chapter, and certain health maintenance organiza-
37 tions.
38 § 3. Paragraph 3 of subsection (a) of section 1322 of the insurance
39 law, as added by chapter 215 of the laws of 1993, is amended to read as
40 follows:
41 (3) "Domestic insurer" means any authorized life insurance company or
42 accident and health insurance company incorporated or organized under
43 any law of this state; corporation organized pursuant to article forty-
44 three of this chapter; or health maintenance organization domiciled in
45 this state and certified or operating in at least one other state.
46 § 4. Subsection (b) and paragraph 1 of subsection (c) of section 1322
47 of the insurance law, as added by chapter 215 of the laws of 1993, are
48 amended to read as follows:
49 (b) Applicability. This section shall apply to every authorized life
50 insurance company and accident and health insurance company incorporated
51 or organized under any law of this state; corporation organized pursuant
52 to article forty-three of this chapter; or health maintenance organiza-
53 tion domiciled in this state and certified or operating in at least one
54 other state.
S. 6966 3
1 (1) Every domestic insurer other than a health maintenance organiza-
2 tion domiciled in this state and certified or operating in at least one
3 other state shall, on or prior to each March fifteenth, and every such
4 health maintenance organization, on or prior to each April fifteenth
5 (the "filing date"), prepare and submit to the superintendent a report
6 of its RBC levels as of the end of the calendar year just ended, in a
7 form and containing such information as is required by the RBC
8 instructions. In addition, the insurer shall file the RBC report:
9 (A) With the National Association of Insurance Commissioners in
10 accordance with the RBC instructions; and
11 (B) With the insurance commissioner in any state in which the insurer
12 is authorized to do business, upon the written request of the insurance
13 commissioner. The insurer shall file the RBC report by the later of:
14 (i) The filing date; or
15 (ii) Fifteen days after the date of the request.
16 § 5. Subparagraph (D) of paragraph 2 of subsection (c) of section 1322
17 of the insurance law, as added by chapter 215 of the laws of 1993, is
18 amended to read as follows:
19 (D) All other business risks and such other [relevent] relevant risks
20 as are set forth in the RBC instructions.
21 § 6. Paragraph 1 of subsection (d) of section 1322 of the insurance
22 law, as added by chapter 215 of the laws of 1993, is amended to read as
23 follows:
24 (1) "Company action level event" means, with respect to a domestic
25 insurer:
26 (A) The filing by the insurer of a RBC report indicating that: (i) The
27 insurer's total adjusted capital is greater than or equal to its regula-
28 tory action level RBC but less than its company action level RBC; or
29 (ii) (I) The insurer has total adjusted capital [which] that is great-
30 er than or equal to its company action level RBC but less than the prod-
31 uct of [2.5] 3.0 and its authorized control level RBC; and
32 (II) there is a negative trend;
33 (B) The notification by the superintendent to the insurer of an
34 adjusted RBC report that indicates the occurrence of an event described
35 in item (i) or (ii) of subparagraph (A) of this paragraph, provided the
36 insurer does not challenge the adjusted RBC report under subsection (h)
37 of this section; or
38 (C) If, under subsection (h) of this section, the insurer challenges
39 an adjusted RBC report that indicates the occurrence of an event
40 described in item (i) or (ii) of subparagraph (A) of this paragraph,
41 then the notification by the superintendent to the insurer that the
42 superintendent has, after a hearing, rejected the insurer's challenge.
43 § 7. Paragraphs 2 and 3 of subsection (l) of section 1322 of the
44 insurance law, as added by chapter 215 of the laws of 1993, are amended
45 to read as follows:
46 (2) In the event of [an] a regulatory action level event under subpar-
47 agraph (A), (B) or (C) of paragraph one of subsection (e) of this
48 section the superintendent shall take the actions required under
49 subsection (d) of this section.
50 (3) In the event of [an] a regulatory action level event under subpar-
51 agraph (D), (E), (F), (G), (H) or (I) of paragraph one of subsection (e)
52 of this section or an authorized control level event, the superintendent
53 shall take the actions required under subsection (e) of this section
54 with respect to the insurer.
55 § 8. This act shall take effect immediately.
S. 6966 4
1 PART B
2 Section 1. Sections 2328 and 2329 of the insurance law, as amended by
3 chapter 102 of the laws of 2011, are amended to read as follows:
4 § 2328. Certain motor vehicle insurance rates; prior approval. For the
5 periods February first, nineteen hundred seventy-four through August
6 second, two thousand one, and the effective date of the
7 property/casualty insurance availability act through June thirtieth, two
8 thousand [fourteen] nineteen, no changes in rates, rating plans, rating
9 rules and rate manuals applicable to motor vehicle insurance, including
10 no-fault coverages under article fifty-one of this chapter, shall be
11 made effective until approved by the superintendent, notwithstanding any
12 inconsistent provisions of this article; provided, however, that changes
13 in such rates, rating plans, rating rules and rate manuals may be made
14 effective without such approval if the rates [which] that result from
15 such changes are no higher than the insurer's rates last approved by the
16 superintendent. This section shall apply only to policies covering loss-
17 es or liabilities arising out of ownership of a motor vehicle used prin-
18 cipally for the transportation of persons for hire, including a bus or a
19 school bus as defined in sections one hundred four and one hundred
20 forty-two of the vehicle and traffic law.
21 § 2329. Motor vehicle insurance rates; excess profits. In accordance
22 with regulations prescribed by the superintendent, each insurer issuing
23 policies [which] that are subject to article fifty-one of this chapter,
24 including policies of motor vehicle personal injury liability insurance
25 or policies of motor vehicle property damage liability insurance or
26 insurance for loss or damage to a motor vehicle, shall establish a fair,
27 practicable, and nondiscriminatory plan for refunding or otherwise cred-
28 iting to those purchasing such policies their share of the insurer's
29 excess profit, if any, on such policies. An excess profit shall be a
30 profit beyond a percentage rate of return on net worth attributable to
31 such policies, computed in accordance with the regulation required by
32 section two thousand three hundred twenty-three of this article, and
33 determined by the superintendent to be so far above a reasonable average
34 profit as to amount to an excess profit, taking into consideration the
35 fact that losses or profits below a reasonable average profit will not
36 be recouped from such policyholders. Each plan shall apply to policy
37 periods for the periods January first, nineteen hundred seventy-four
38 through August second, two thousand one, and the effective date of the
39 property/casualty insurance availability act through June thirtieth, two
40 thousand [fourteen] nineteen. In prescribing such regulations the
41 superintendent may limit the duration of such plans, waive any require-
42 ment for refund or credit [which] that he or she determines to be de
43 minimis or impracticable, adopt forms of returns [which] that shall be
44 made to him or her in order to establish the amount of any refund or
45 credit due, establish periods and times for the determination and
46 distribution of refunds and credits, and shall provide that insurers
47 receive appropriate credit against any refunds or credits required by
48 any such plan for policyholder dividends and for return premiums [which]
49 that may be due under rate credit or retrospective rating plans based on
50 experience.
51 § 2. Paragraph 2 of subsection (l) of section 3425 of the insurance
52 law, as amended by chapter 102 of the laws of 2011, is amended to read
53 as follows:
54 (2) The superintendent shall collect, analyze and compile such reports
55 with regard to the number of new insureds, non-renewed insureds and
S. 6966 5
1 business written by each insurer in each rating territory of each such
2 insurer and, in each case, the class of insureds (including age and sex)
3 affected so that a statistical analysis of the results obtained pursuant
4 to subsections (f) and (m) of this section shall be provided to each
5 house of the legislature by March fifteenth, in the years nineteen
6 hundred ninety-two, nineteen hundred ninety-six, nineteen hundred nine-
7 ty-eight, two thousand one, two thousand six, two thousand seven, two
8 thousand eight, two thousand eleven [and], two thousand fourteen, and
9 two thousand nineteen.
10 § 3. Paragraphs 1 and 2 and the opening paragraph of paragraph 3 of
11 subsection (m) of section 3425 of the insurance law, as amended by chap-
12 ter 102 of the laws of 2011, are amended to read as follows:
13 (1) Paragraphs eight and nine of subsection (a), subsection (f) and
14 subparagraphs (B) and (E) of paragraph one of subsection (j) of this
15 section shall not apply to any new covered policy of automobile insur-
16 ance voluntarily written on or after August first, nineteen hundred
17 eighty-five and prior to January first, nineteen hundred eighty-six, and
18 on or after August second, two thousand one and prior to the effective
19 date of the property/casualty insurance availability act, and on or
20 after June thirtieth, two thousand [fourteen] nineteen, but the legal
21 rights granted to insurers or policyholders under such provisions shall
22 not be extinguished or impaired thereby.
23 (2) In lieu of such provisions, paragraph seven of subsection (a),
24 subparagraph (A) of paragraph one of subsection (j) and paragraph three
25 of this subsection shall apply to such automobile insurance policies
26 [which] that are newly and voluntarily written to have an effective date
27 on or after August first, nineteen hundred eighty-five and prior to
28 January first, nineteen hundred eighty-six, and on or after August
29 second, two thousand one and prior to the effective date of the
30 property/casualty insurance availability act, and on or after June thir-
31 tieth, two thousand [fourteen] nineteen.
32 On and after August first, nineteen hundred eighty-five and prior to
33 January first, nineteen hundred eighty-six, and on or after August
34 second, two thousand one and prior to the effective date of the
35 property/casualty insurance availability act, and on or after June thir-
36 tieth, two thousand [fourteen] nineteen, no notice of nonrenewal or
37 conditional renewal of such covered automobile insurance policies
38 referred to in this subsection shall be issued to become effective
39 during the required policy period unless it is based upon a ground for
40 which the policy could have been cancelled or unless it is based upon
41 one or more of the following grounds [which] that occurred during the
42 thirty-six month period ending on the last day of the fourth month
43 preceding the month of the effective date of such notice of nonrenewal
44 or conditional renewal:
45 § 4. Subsection (f) of section 2305 of the insurance law, as amended
46 by chapter 102 of the laws of 2011, is amended to read as follows:
47 (f) Subsection (a) of this section shall be of no force or effect
48 during the period August third, two thousand one through the day before
49 the effective date of the property/casualty insurance availability act,
50 and after June thirtieth, two thousand [fourteen] nineteen. During the
51 period August third, two thousand one through the day before the effec-
52 tive date of the property/casualty insurance availability act, and again
53 commencing on July first, two thousand [fourteen] nineteen, all rates
54 previously subject to subsection (a) of this section, other than rates
55 [which] that are not required to be filed pursuant to subsection (b) of
56 section two thousand three hundred ten of this article or [which] that
S. 6966 6
1 have been suspended from the filing requirement pursuant to section two
2 thousand three hundred eleven of this article, shall become subject to
3 subsections (b), (c) and (d) of this section. All other provisions of
4 this article applicable to kinds of insurance or insurance activities
5 the rates for which are subject to prior approval under subsection (b)
6 of this section shall apply to kinds of insurance the rates for which
7 were previously subject to subsection (a) of this section or the rates
8 for which are not required to be filed pursuant to subsection (b) of
9 section two thousand three hundred ten of this article or the rates for
10 which have been suspended from the filing requirement pursuant to
11 section two thousand three hundred eleven of this article.
12 § 5. Section 2342 of the insurance law, as amended by chapter 102 of
13 the laws of 2011, is amended to read as follows:
14 § 2342. Expiration of certain provisions. The provisions of subsection
15 (c) of section two thousand three hundred seven, section two thousand
16 three hundred eight, subsection (a) of section two thousand three
17 hundred ten, sections two thousand three hundred sixteen, two thousand
18 three hundred twenty, two thousand three hundred twenty-three, two thou-
19 sand three hundred twenty-six, and two thousand three hundred thirty-
20 five, and subsection (b) of section two thousand three hundred thirty-
21 six [and section two thousand three hundred forty-one] of this article
22 shall cease to be of any force or effect during the period August third,
23 two thousand one through the day before the effective date of the
24 property/casualty insurance availability act, and after June thirtieth,
25 two thousand [fourteen] nineteen.
26 § 6. Subsection (h) of section 2344 of the insurance law, as amended
27 by chapter 102 of the laws of 2011, is amended to read as follows:
28 (h) This section shall cease to be of any force or effect during the
29 period August third, two thousand one through the day before the effec-
30 tive date of the property/casualty insurance availability act, and after
31 June thirtieth, two thousand [fourteen] nineteen, except that rates
32 shall reflect the likely reductive cost effects reasonably attributable
33 to the statutory provisions specified in paragraph one of subsection (g)
34 of this section.
35 § 7. Subsection (g) of section 5412 of the insurance law, as amended
36 by chapter 102 of the laws of 2011, is amended to read as follows:
37 (g) The provisions of this section shall cease to be of any force or
38 effect on or after June thirtieth, two thousand [fourteen] nineteen,
39 except that policies issued or other obligations incurred by the associ-
40 ation shall not be impaired by the expiration of this section and the
41 association shall continue for the purpose of servicing such policies
42 and performing such obligations.
43 § 8. This act shall take effect immediately.
44 PART C
45 Section 1. Section 6 of chapter 322 of the laws of 2007, amending the
46 banking law relating to the power of banks, private bankers, trust
47 companies, savings banks, saving and loan associations, credit unions
48 and foreign banking corporations to exercise the rights of national
49 banks, federal savings associations, federal credit unions and federal
50 branches and agencies of foreign banks, as amended by section 95 of part
51 A of chapter 62 of the laws of 2011, is amended to read as follows:
52 § 6. This act shall take effect immediately; provided, however that
53 sections one, two, three and four of this act shall take effect Septem-
54 ber 1, 2007; and provided further that sections one, two, three and four
S. 6966 7
1 of this act shall expire and be deemed repealed September 10, [2014]
2 2017; and provided further that any federally permitted powers approved
3 under section three of this act shall remain in full force and effect on
4 and after such repeal date and shall not be affected by such repeal.
5 § 2. Section 7 of chapter 3 of the laws of 1997, amending the banking
6 law and the insurance law relating to authorizing the banking board to
7 permit banks and trust companies to exercise the rights of national
8 banks, as amended by section 95-a of part A of chapter 62 of the laws of
9 2011, is amended to read as follows:
10 § 7. This act shall take effect immediately provided that section two
11 of this act shall take effect on the thirtieth day after it shall have
12 become a law and shall apply to violations prescribed in section 44 of
13 the banking law that occur on or after such date; and provided further
14 that sections one, three, four and five shall expire and be deemed
15 repealed September 10, [2014] 2017; and provided further that any rules
16 and regulations promulgated pursuant to sections one, three, four and
17 five shall remain in full force and effect on and after such expiration
18 date and shall not be affected by such expiration date.
19 § 3. This act shall take effect immediately.
20 PART D
21 Section 1. Subdivisions a and e of section 25 of chapter 507 of the
22 laws of 2009 amending the real property actions and proceedings law and
23 other laws relating to foreclosure actions on home mortgage loans, are
24 amended to read as follows:
25 a. Sections one, one-a, two and three of this act shall take effect on
26 the thirtieth day after this act shall have become a law and shall apply
27 to notices required on or after such date; provided, however, that
28 section one-a of this act shall expire and be deemed repealed [5 years
29 after such effective date] January 14, 2020;
30 e. Section nine of this act shall take effect on the sixtieth day
31 after this act shall have become a law and shall apply to legal actions
32 filed on or after such date; provided, however that the amendments to
33 subdivision (a) of rule 3408 of the civil practice law and rules made by
34 such section shall expire and be deemed repealed [5 years after such
35 effective date] January 14, 2020;
36 § 2. This act shall take effect immediately.
37 § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
38 sion, section or part of this act shall be adjudged by a court of compe-
39 tent jurisdiction to be invalid, such judgment shall not affect, impair,
40 or invalidate the remainder thereof, but shall be confined in its opera-
41 tion to the clause, sentence, paragraph, subdivision, section or part
42 thereof directly involved in the controversy in which such judgment
43 shall have been rendered. It is hereby declared to be the intent of the
44 legislature that this act would have been enacted even if such invalid
45 provisions had not been included herein.
46 § 3. This act shall take effect immediately provided, however, that
47 the applicable effective date of Parts A through D of this act shall be
48 as specifically set forth in the last section of such Parts.
