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S07095 Summary:

S07095 Actions:

S07095 Committee Votes:

S07095 Floor Votes:

S07095 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7095--A
 
                               2023-2024 Regular Sessions
 
                    IN SENATE
 
                                      May 18, 2023
                                       ___________
 
        Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
          printed to be committed to the  Committee  on  Insurance  --  reported
          favorably  from  said  committee  and  committed  to  the Committee on
          Finance -- committee discharged, bill amended,  ordered  reprinted  as
          amended and recommitted to said committee

        AN  ACT  to amend the insurance law, in relation to group capital calcu-
          lations, liquidity stress tests, and confidentiality
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1.  Paragraphs 1 and 2 of subsection (a) and subsection (b) of
     2  section  110  of the insurance law, paragraphs 1 and 2 of subsection (a)
     3  as amended by chapter 238 of the laws of  2013  and  subsection  (b)  as
     4  added  by  chapter  687  of  the  laws  of  2003, are amended to read as
     5  follows:
     6    (1) may share documents, materials  or  other  information,  including
     7  confidential [and], privileged, and trade secret documents, materials or
     8  information  with other local, state, federal, and international regula-
     9  tory agencies, with the New York Liquidation Bureau, with  the  National
    10  Association  of Insurance Commissioners, its affiliates or subsidiaries,
    11  [and] with any third-party consultant designated by the  superintendent,
    12  with  local,  state, federal, and international law enforcement authori-
    13  ties, including members of any supervisory college described in  section
    14  three  hundred  two of this chapter, provided that the recipient has the
    15  authority and agrees to  maintain  the  confidentiality  and  privileged
    16  status  of  the document, material or other information and has verified
    17  in writing the legal authority to  maintain  confidentiality;  provided,
    18  however,  that  this paragraph shall not be construed as limiting access
    19  to records pursuant to article six of the public officers law, except as
    20  provided in paragraph three of subsection (b) of this section;
    21    (2) may receive documents, materials or information, including  other-
    22  wise confidential [and], privileged, and trade secret documents, materi-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08515-05-3
        S. 7095--A                          2
 
     1  als  or  information,  from  the  New  York Liquidation Bureau, from the
     2  National Association  of  Insurance  Commissioners,  its  affiliates  or
     3  subsidiaries  [and],  from  regulatory  and law enforcement officials of
     4  other foreign or domestic jurisdictions, including members of any super-
     5  visory  college  described in section three hundred two of this chapter,
     6  and from any other entity designated by the superintendent  in  a  regu-
     7  lation,  and  shall maintain as confidential or privileged any document,
     8  material or information received with notice or the  understanding  that
     9  it is confidential or privileged under the laws of the jurisdiction that
    10  is the source of the document, material or information; and
    11    (b)  (1)  No  waiver of any applicable privilege or claim of confiden-
    12  tiality in the documents, materials, or information  shall  occur  as  a
    13  result  of  disclosure  to the superintendent under this section or as a
    14  result of sharing as authorized in this section.
    15    (2) The sharing of documents, materials, or information by the  super-
    16  intendent  pursuant to this section shall not constitute a delegation of
    17  regulatory authority or rulemaking, and  the  superintendent  is  solely
    18  responsible  for  the  administration, execution, and enforcement of the
    19  provisions of this section.
    20    (3) Documents, materials, or other information in  the  possession  or
    21  control of the National Association of Insurance Commissioners or third-
    22  party  consultants pursuant to this section shall be confidential by law
    23  and privileged, shall not be subject to article six of the public  offi-
    24  cers  law, shall not be subject to subpoena, and shall not be subject to
    25  discovery or admissible in evidence in any private civil action.
    26    § 2. Subsection (a) of section 1501 of the insurance law is amended by
    27  adding four new paragraphs 8, 9, 10 and 11 to read as follows:
    28    (8) "Group capital calculation instructions" means the  group  capital
    29  calculation  instructions  as  adopted by the NAIC and as amended by the
    30  NAIC from time to time in accordance with the procedures adopted by  the
    31  NAIC,  except  where  such  instructions  conflict with the laws of this
    32  state and subject to exceptions the superintendent may take in  a  regu-
    33  lation  upon  a  written finding that the exceptions would not be unduly
    34  burdensome on the holding company or insurer.
    35    (9) "NAIC" means the National Association of Insurance Commissioners.
    36    (10) "NAIC liquidity stress test framework" means an NAIC  publication
    37  that includes a history of the NAIC's development of regulatory liquidi-
    38  ty  stress  testing,  the  scope criteria applicable for a specific data
    39  year, and the liquidity stress test instructions and reporting templates
    40  for a specific data year, such scope criteria, instructions and  report-
    41  ing  template  being  as  adopted by the NAIC and as amended by the NAIC
    42  from time to time in accordance with the procedures adopted by the NAIC,
    43  except where such instructions conflicts with the laws of this state and
    44  subject to exceptions the superintendent may take in a regulation upon a
    45  written finding that the exceptions would not be  unduly  burdensome  on
    46  the holding company or insurer.
    47    (11)  "Scope  criteria" means the designated exposure bases along with
    48  minimum magnitudes thereof for the specified data year, used  to  estab-
    49  lish  a  preliminary  list  of  insurers considered scoped into the NAIC
    50  liquidity stress test framework for that data year.
    51    § 3. Section 1503 of the insurance law is amended by adding three  new
    52  subsections (c), (d) and (e) to read as follows:
    53    (c) (1) An ultimate holding company shall file with the superintendent
    54  an  annual group capital calculation by June thirtieth of each year when
    55  this state is the lead state of the holding company system as determined
    56  in accordance with the procedures within the financial analysis handbook
        S. 7095--A                          3
 
     1  adopted by the NAIC, as amended from time to time.  When the lead  state
     2  is  not  this  state,  an  ultimate  holding company shall file with the
     3  superintendent the annual group capital calculation as  adopted  by  its
     4  lead  state  if  the ultimate holding company has filed the annual group
     5  capital calculation with the lead state but the lead state is not  will-
     6  ing  or  able  to  share  the  annual group capital calculation with the
     7  superintendent.
     8    (2) When this state is the lead state, the  ultimate  holding  company
     9  shall  complete  the annual group capital calculation in accordance with
    10  the group capital calculation instructions, which may permit the  super-
    11  intendent  to  allow  a holding company that is not the ultimate holding
    12  company to file the annual group capital calculation.
    13    (3) When this state is the lead state,  an  ultimate  holding  company
    14  shall be exempt from filing an annual group capital calculation if it is
    15  part of a holding company system that:
    16    (A)  has  only one insurer within its system that only writes business
    17  and is only licensed in its domestic state and assumes no business  from
    18  any other insurer;
    19    (B)  is  required  to perform a group capital calculation specified by
    20  the United States Federal Reserve Board, except that the holding company
    21  shall not be exempt if the superintendent  requests  the  group  capital
    22  calculation from the United States Federal Reserve Board under the terms
    23  of  information  sharing  agreements  in  effect and the Federal Reserve
    24  Board cannot share the calculation with the superintendent;
    25    (C) has a non-United States  group-wide  supervisor  that  is  located
    26  within a reciprocal jurisdiction, as described in part one hundred twen-
    27  ty-five  of title eleven of the official compilation of codes, rules and
    28  regulations of this state, that recognizes the United States state regu-
    29  latory approach to group supervision and group capital; or
    30    (D)(i) provides information to the superintendent, either directly  or
    31  indirectly  through  the  group-wide supervisor, who has determined such
    32  information is satisfactory to allow the superintendent to  comply  with
    33  the  NAIC  group supervision approach, as detailed in the NAIC financial
    34  analysis handbook; and
    35    (ii) has a non-United States group-wide supervisor that is  not  in  a
    36  reciprocal jurisdiction that recognizes and accepts, as specified by the
    37  superintendent  in  a  regulation,  the group capital calculation as the
    38  world-wide group capital assessment for United  States  holding  company
    39  systems that operate in that jurisdiction.
    40    (4)  Notwithstanding  subparagraphs  (C) and (D) of paragraph three of
    41  this subsection, when this state is the lead state,  the  superintendent
    42  shall require the group capital calculation for United States operations
    43  of  any  non-United States-based holding company system where, after any
    44  necessary consultation with other supervisors or officials, it is deemed
    45  appropriate by the superintendent for prudential oversight and  solvency
    46  monitoring purposes or for ensuring the competitiveness of the insurance
    47  marketplace.
    48    (5)  Notwithstanding  the  exemptions  from  filing  the group capital
    49  calculation set forth in paragraph three of this subsection,  when  this
    50  state is the lead state, the superintendent has the discretion to exempt
    51  a  holding  company  from  filing an annual group capital calculation or
    52  accept a limited group capital calculation filing or report  in  accord-
    53  ance with criteria as specified by the superintendent in a regulation.
    54    (6)  When  this  state is the lead state, if the superintendent deter-
    55  mines that a holding company no longer meets one or more of the require-
    56  ments for an exemption from filing the group capital  calculation  under
        S. 7095--A                          4
 
     1  this subsection, the holding company shall file the group capital calcu-
     2  lation  at  the next annual filing date unless given an extension by the
     3  superintendent based on reasonable grounds shown.
     4    (d)(1)  An  ultimate  holding company that   directly   or  indirectly
     5  controls  an insurer subject to registration and that is scoped into the
     6  NAIC liquidity stress test framework shall file the results of a specif-
     7  ic year's annual liquidity stress test with the superintendent when this
     8  state is the lead state of the holding company system as  determined  by
     9  the  procedures  within  the  financial analysis handbook adopted by the
    10  NAIC and as amended from time to time.
    11    (2) When the lead state is not this state, an ultimate holding company
    12  shall file with the superintendent the  results  of  a  specific  year's
    13  liquidity stress test as adopted by its lead state if the ultimate hold-
    14  ing company has filed the results with the lead state but the lead state
    15  is not willing or able to share the results with the superintendent.
    16    (3)  When this state is the lead state, the performance of, and filing
    17  of the results from, a  specific  year's  liquidity  stress  test  shall
    18  comply with the NAIC liquidity stress test framework.
    19    (4) When this state is the lead state, any change to the NAIC liquidi-
    20  ty  stress test framework or to the data year for which the scope crite-
    21  ria are to be measured shall be effective on January first of  the  year
    22  following the calendar year when such changes are adopted.
    23    (5) When this state is the lead state, an insurer meeting at least one
    24  threshold of the scope criteria shall be considered scoped into the NAIC
    25  liquidity  stress  test framework for the specified data year unless the
    26  superintendent, in consultation with the NAIC financial  stability  task
    27  force, or its successor, determines the insurer shall not be scoped into
    28  the NAIC liquidity stress test framework for that data year.
    29    (6)  When this state is the lead state, an insurer that does not trig-
    30  ger at least one threshold of the scope  criteria  shall  be  considered
    31  scoped out of the NAIC liquidity stress test framework for the specified
    32  data  year,  unless  the  superintendent,  in consultation with the NAIC
    33  financial stability task force, or its successor, determines the insurer
    34  shall be scoped into the NAIC liquidity stress test framework  for  that
    35  data year.
    36    (7)  The  superintendent,  in  consultation  with  the  NAIC financial
    37  stability task force, or its successor,  shall  assess  the  concern  of
    38  wishing to avoid having insurers scoped in and out of the NAIC liquidity
    39  stress  test  framework on a frequent basis as part of the determination
    40  for an insurer.
    41    (e) No insurer,  insurance  producer,  or  other  person  shall  make,
    42  publish,  disseminate,  circulate, issue, or place before the public, or
    43  cause directly or indirectly to be made, published, disseminated, circu-
    44  lated, issued, or placed before the public, in  this state, in any news-
    45  paper, magazine, or other publication, or  in  the  form  of  a  notice,
    46  circular,  pamphlet,  letter, or poster, or over any radio or television
    47  station or any  electronic  means  of  communication  available  to  the
    48  public, or in any other way as an advertisement, announcement, or state-
    49  ment  containing  a representation or statement with regard to the group
    50  capital calculation, group capital ratio, liquidity stress test results,
    51  or supporting disclosures for such test, or any component derived in the
    52  calculation thereof, of any insurer or holding company system, provided,
    53  however, that an insurer may publish, with  the  superintendent's  prior
    54  approval,  an  announcement  in a written publication to rebut any mate-
    55  rially false statement with respect to the foregoing if the  insurer  is
    56  able  to  demonstrate  to  the superintendent with substantial proof the
        S. 7095--A                          5
 
     1  falsity of such statement or inappropriateness, as the case may be,  and
     2  if the sole purpose of the announcement is to rebut the materially false
     3  statement.
     4    §  4.  Subsection (c) of section 1504 of the insurance law, as amended
     5  by chapter 238 of the laws of 2013, is amended to read as follows:
     6    (c) (1) The [superintendent shall keep the] contents  of  each  report
     7  and filing made pursuant to this article and any information obtained in
     8  connection therewith shall be confidential and proprietary and shall not
     9  be  subject  to  subpoena  or discovery or admissible in evidence in any
    10  private civil action, and the superintendent shall  not  make  the  same
    11  public  without  the  prior written consent of the controlled insurer to
    12  which it pertains unless the superintendent, after notice and an  oppor-
    13  tunity to be heard, shall determine that the interests of policyholders,
    14  shareholders or the public will be served by the publication thereof. In
    15  any  action or proceeding by the superintendent against the person exam-
    16  ined or any other person within the same holding company system a report
    17  of such examination published by the superintendent shall be  admissible
    18  as evidence of the facts stated therein.
    19    (2) Neither the superintendent nor any person who received a report or
    20  filing  made  pursuant  to  this article and any information obtained in
    21  connection therewith, through examination  or  otherwise,  while  acting
    22  under  the  authority  of  the  superintendent or with whom such report,
    23  filing, or information are shared pursuant to  this  chapter,  shall  be
    24  permitted  or required to testify in any private civil action concerning
    25  the report, filing, or information.
    26    § 5. Subsection (f) of section 1506 of the insurance law, as added  by
    27  chapter 238 of the laws of 2013, is amended to read as follows:
    28    (f)  Any holding company seeking to divest its controlling interest in
    29  a domestic insurer, in any manner, shall file with  the  superintendent,
    30  with  a copy to the insurer, notice of its proposed divestiture at least
    31  thirty days prior to the cessation of control,  provided,  however  that
    32  this  subsection  shall  not  apply if notice is provided as required by
    33  subsection (a) of this section.
    34    § 6. The insurance law is amended by adding a new section 1511 to read
    35  as follows:
    36    § 1511. Expenses for  group-wide  supervision.  A  controlled  insurer
    37  shall  be liable for and shall pay the reasonable expenses of the super-
    38  intendent's participation in the  administration  of  group-wide  super-
    39  vision of internationally active insurance groups, including the engage-
    40  ment  of  attorneys,  actuaries,  and  any  other  professionals and all
    41  reasonable travel expenses.
    42    § 7. Subsection (d) of section 1603 of the insurance law, as added  by
    43  chapter 238 of the laws of 2013, is amended to read as follows:
    44    (d) Any domestic insurer seeking to divest its controlling interest in
    45  another domestic insurer, in any manner, shall file with the superinten-
    46  dent,  with a copy to the insurer, notice of its proposed divestiture at
    47  least thirty days prior to the cessation of control,  provided,  however
    48  that  this  subsection shall not apply if notice is provided as required
    49  by subsection (a) of this section.
    50    § 8. Section 1604 of the insurance law is amended by adding  four  new
    51  subsections (c), (d), (e) and (f) to read as follows:
    52    (c)  (1) An authorized domestic insurer, other than a domestic insurer
    53  required to register as a controlled insurer  pursuant  to  section  one
    54  thousand  five hundred three of this chapter, shall file with the super-
    55  intendent an annual group capital calculation by June thirtieth of  each
    56  year  when this state is the lead state as determined in accordance with
        S. 7095--A                          6
 
     1  the procedures within the financial analysis  handbook  adopted  by  the
     2  NAIC, as amended from time to time.
     3    (2)  When  the  lead  state  is not this state, an authorized domestic
     4  insurer shall file with the  superintendent  the  annual  group  capital
     5  calculation  as  adopted  by  its  lead state if the authorized domestic
     6  insurer has filed the annual group capital  calculation  with  the  lead
     7  state  but  the  lead  state  is not willing or able to share the annual
     8  group capital calculation with the superintendent.
     9    (3) When this state is the lead state, the authorized domestic insurer
    10  shall complete the annual group capital calculation in  accordance  with
    11  the  group capital calculation instructions, which may permit the super-
    12  intendent to allow a subsidiary to file the annual group capital  calcu-
    13  lation.
    14    (4)  When this state is the lead state, an authorized domestic insurer
    15  shall be exempt from filing an annual group capital calculation if it:
    16    (A) has only one insurer subsidiary that only writes business  and  is
    17  only  licensed  in  its  domestic state and assumes no business from any
    18  other insurer;
    19    (B) is required to perform a group capital  calculation  specified  by
    20  the  United  States  Federal  Reserve  Board, except that the authorized
    21  domestic insurer shall not be exempt if the superintendent requests  the
    22  group  capital  calculation from the United States Federal Reserve Board
    23  under the terms of information sharing  agreements  in  effect  and  the
    24  Federal  Reserve Board cannot share the calculation with the superinten-
    25  dent;
    26    (C) has a non-United States  group-wide  supervisor  that  is  located
    27  within a reciprocal jurisdiction, as described in part one hundred twen-
    28  ty-five  of title eleven of the official compilation of codes, rules and
    29  regulations of this state, that recognizes the United States state regu-
    30  latory approach to group supervision and group capital; or
    31    (D)(i) provides information to the superintendent, either directly  or
    32  indirectly  through  the  group-wide supervisor, who has determined such
    33  information is satisfactory to allow the superintendent to  comply  with
    34  the  NAIC  group supervision approach, as detailed in the NAIC financial
    35  analysis handbook; and
    36    (ii) has a non-United States group-wide supervisor that is  not  in  a
    37  reciprocal jurisdiction and that recognizes and accepts, as specified by
    38  the superintendent in a regulation, the group capital calculation as the
    39  world-wide group capital assessment for United States systems that oper-
    40  ate in that jurisdiction.
    41    (5)  Notwithstanding  subparagraphs  (C)  and (D) of paragraph four of
    42  this subsection, when this state is the lead state,  the  superintendent
    43  shall require the group capital calculation for United States operations
    44  of any non-United States-based system where, after any necessary consul-
    45  tation  with other supervisors or officials, it is deemed appropriate by
    46  the superintendent for  prudential  oversight  and  solvency  monitoring
    47  purposes  or  for  ensuring the competitiveness of the insurance market-
    48  place.
    49    (6) Notwithstanding the  exemptions  from  filing  the  group  capital
    50  calculation  set  forth  in paragraph four of this subsection, when this
    51  state is the lead state, the superintendent has the discretion to exempt
    52  an authorized domestic insurer  from  filing  an  annual  group  capital
    53  calculation  or accept a limited annual group capital calculation filing
    54  or report in accordance with criteria as specified by the superintendent
    55  in a regulation.
        S. 7095--A                          7
 
     1    (7) When this state is the lead state, if  the  superintendent  deter-
     2  mines that an authorized domestic insurer no longer meets one or more of
     3  the  requirements  for an exemption from filing the group capital calcu-
     4  lation under this subsection, the authorized domestic insurer shall file
     5  the  group  capital  calculation  at  the next annual filing date unless
     6  given an extension by the superintendent  based  on  reasonable  grounds
     7  shown.
     8    (d)(1)  An  authorized domestic insurer, other than a domestic insurer
     9  required to register as a controlled insurer  pursuant  to  section  one
    10  thousand  five hundred three of this chapter, that has a subsidiary that
    11  is scoped into the NAIC liquidity stress test framework shall  file  the
    12  results  of  a  specific  year's  annual  liquidity stress test with the
    13  superintendent when this state is the lead state as  determined  by  the
    14  procedures  within  the  financial analysis handbook adopted by the NAIC
    15  and as amended from time to time.
    16    (2) When the lead state is not  this  state,  an  authorized  domestic
    17  insurer  shall  file  with  the superintendent the results of a specific
    18  year's liquidity stress test as adopted by its lead state if the author-
    19  ized domestic insurer has filed the results with the lead state but  the
    20  lead  state  is not willing or able to share the results with the super-
    21  intendent.
    22    (3) When this state is the lead state, the performance of, and  filing
    23  of  the  results  from,  a  specific  year's liquidity stress test shall
    24  comply with the NAIC liquidity stress test framework.
    25    (4) When this state is the lead state, any change to the NAIC liquidi-
    26  ty stress test framework or to the data year for which the scope  crite-
    27  ria  are  to be measured shall be effective on January first of the year
    28  following the calendar year when such changes are adopted.
    29    (5) When this state is the lead state, an insurer meeting at least one
    30  threshold of the scope criteria shall be considered scoped into the NAIC
    31  liquidity stress test framework for the specified data year  unless  the
    32  superintendent,  in  consultation with the NAIC financial stability task
    33  force, or its successor, determines the insurer shall not be scoped into
    34  the NAIC liquidity stress test framework for that data year.
    35    (6) When this state is the lead state, an insurer that does not  trig-
    36  ger  at  least  one  threshold of the scope criteria shall be considered
    37  scoped out of the NAIC liquidity stress test framework for the specified
    38  data year, unless the superintendent,  in  consultation  with  the  NAIC
    39  financial stability task force, or its successor, determines the insurer
    40  shall  be  scoped into the NAIC liquidity stress test framework for that
    41  data year.
    42    (7) The  superintendent,  in  consultation  with  the  NAIC  financial
    43  stability  task  force,  or  its  successor, shall assess the concern of
    44  wishing to avoid having insurers scoped in and out of the NAIC liquidity
    45  stress test framework on a frequent basis as part of  the  determination
    46  for an insurer.
    47    (e)  No  insurer,  insurance  producer,  or  other  person shall make,
    48  publish, disseminate, circulate, issue, or place before the  public,  or
    49  cause directly or indirectly to be made, published, disseminated, circu-
    50  lated,  issued, or placed before the public, in this state, in a newspa-
    51  per, magazine, or other publication, or in the form of a notice,  circu-
    52  lar,  pamphlet,  letter,  or  poster,  or  over  any radio or television
    53  station or any  electronic  means  of  communication  available  to  the
    54  public, or in any other way as an advertisement, announcement, or state-
    55  ment  containing  a representation or statement with regard to the group
    56  capital calculation, group capital ratio, liquidity stress test results,
        S. 7095--A                          8
 
     1  or supporting disclosures for such test, or any component derived in the
     2  calculation thereof, of any authorized domestic  insurer  or  subsidiary
     3  thereof, provided, however, that an insurer may publish, with the super-
     4  intendent's  prior  approval,  announcements in a written publication to
     5  rebut any materially false statement with respect to  the  foregoing  if
     6  the  insurer  is able to demonstrate to the superintendent with substan-
     7  tial proof the falsity of such statement or  the  inappropriateness,  as
     8  the case may be, and if the sole purpose of the announcement is to rebut
     9  the materially false statement.
    10    (f) For the purpose of this section:
    11    (1)  "Group  capital calculation instructions" means the group capital
    12  calculation instructions as adopted by the NAIC and as  amended  by  the
    13  NAIC  from time to time in accordance with the procedures adopted by the
    14  NAIC, except where such instructions conflict  with  the  laws  of  this
    15  state  and  subject to exceptions the superintendent may take in a regu-
    16  lation upon a written finding that the exceptions would  not  be  unduly
    17  burdensome on the domestic insurer or subsidiary.
    18    (2) "NAIC" means the National Association of Insurance Commissioners.
    19    (3)  "NAIC  liquidity stress test framework" means an NAIC publication
    20  that includes a history of the NAIC's development of regulatory liquidi-
    21  ty stress testing, the scope criteria applicable  for  a  specific  data
    22  year, and the liquidity stress test instructions and reporting templates
    23  for  a specific data year, such scope criteria, instructions and report-
    24  ing template being as adopted by the NAIC and as  amended  by  the  NAIC
    25  from time to time in accordance with the procedures adopted by the NAIC,
    26  except  where such publication conflicts with the laws of this state and
    27  subject to exceptions the superintendent may take in a regulation upon a
    28  written finding that the exceptions would not be  unduly  burdensome  on
    29  the domestic insurer or subsidiary.
    30    (4)  "Scope  criteria"  means the designated exposure bases along with
    31  minimum magnitudes thereof for the specified data year, used  to  estab-
    32  lish  a  preliminary  list  of  insurers considered scoped into the NAIC
    33  liquidity stress test framework for that data year.
    34    § 9. The insurance law is amended by adding two new sections 1613  and
    35  1614 to read as follows:
    36    § 1613. Expenses  for  group-wide  supervision. An authorized domestic
    37  insurer shall be liable for and shall pay the reasonable expenses of the
    38  superintendent's  participation  in  the  administration  of  group-wide
    39  supervision  of  internationally  active insurance groups, including the
    40  engagement of attorneys, actuaries, and any other professionals and  all
    41  reasonable travel expenses.
    42    § 1614. Confidentiality  of reports and filings.  The contents of each
    43  report and filing submitted pursuant to  this  article  and  information
    44  pertaining  thereto  shall be kept confidential, shall not be subject to
    45  subpoena or discovery, shall  not  be  admissible  in  evidence  in  any
    46  private  civil action, and shall not be made public unless, after notice
    47  and opportunity to be heard,  the  superintendent  determines  that  the
    48  interests of policyholders, subscribers, stockholders or the public will
    49  be served by the publication thereof. Neither the superintendent nor any
    50  person  who received a report or filing submitted pursuant to this arti-
    51  cle and information pertaining thereto, through  examination  or  other-
    52  wise,  while  acting  under  the authority of the superintendent or with
    53  whom such report or information are shared  pursuant  to  this  chapter,
    54  shall  be  permitted  or required to testify in any private civil action
    55  concerning the report, filing, or information.
        S. 7095--A                          9
 
     1    § 10. The section heading of section 1702 of  the  insurance  law,  as
     2  amended  by  chapter  238  of  the  laws  of 2013, is amended to read as
     3  follows:
     4    [Meaning  of "subsidiary", "parent corporation" and "enterprise risk";
     5  certain types of subsidiaries defined] Definitions.
     6    § 11. Section 1702 of the insurance law is amended by adding four  new
     7  subsections (g), (h), (i) and (j) to read as follows:
     8    (g)  "Group  capital calculation instructions" means the group capital
     9  calculation instructions as adopted by the NAIC and as  amended  by  the
    10  NAIC  from time to time in accordance with the procedures adopted by the
    11  NAIC, except where such instructions conflict  with  the  laws  of  this
    12  state  and  subject to exceptions the superintendent may take in a regu-
    13  lation upon a written finding that the exceptions would  not  be  unduly
    14  burdensome on the parent corporation or subsidiary.
    15    (h) "NAIC" means the National Association of Insurance Commissioners.
    16    (i)  "NAIC  liquidity stress test framework" means an NAIC publication
    17  that includes a history of the NAIC's development of regulatory liquidi-
    18  ty stress testing, the scope criteria applicable  for  a  specific  data
    19  year, and the liquidity stress test instructions and reporting templates
    20  for  a specific data year, such scope criteria, instructions and report-
    21  ing template being as adopted by the NAIC and as  amended  by  the  NAIC
    22  from time to time in accordance with the procedures adopted by the NAIC,
    23  except  where such instructions conflict with the laws of this state and
    24  subject to exceptions the superintendent may take in a regulation upon a
    25  written finding that the exceptions would not be  unduly  burdensome  on
    26  the parent corporation or subsidiary.
    27    (j)  "Scope  criteria"  means the designated exposure bases along with
    28  minimum magnitudes thereof for the specified data year, used  to  estab-
    29  lish  a  preliminary  list  of  insurers considered scoped into the NAIC
    30  liquidity stress test framework for that data year.
    31    § 12. Section 1709 of the insurance law, as amended by chapter 381  of
    32  the laws of 1986, is amended to read as follows:
    33    § 1709. Confidentiality  of  [information]  reports  and  filings. The
    34  contents of each  [information]  report  [filed  hereunder]  and  filing
    35  submitted  pursuant  to  this article and information pertaining thereto
    36  shall be kept confidential, shall not be subject to subpoena or  discov-
    37  ery,  shall  not  be admissible in evidence in any private civil action,
    38  and shall not be made public unless, after notice and opportunity to  be
    39  heard,  the  superintendent determines that the interests of policyhold-
    40  ers, subscribers, stockholders or the  public  will  be  served  by  the
    41  publication  thereof. The provisions of this section shall not be appli-
    42  cable to any [information] report [filed hereunder] or filing  submitted
    43  pursuant  to this article and any information pertaining thereto, if the
    44  parent corporation is a corporation subject to  article  forty-three  of
    45  this  chapter.  Neither the superintendent nor any person who received a
    46  report or filing submitted pursuant  to  this  article  and  information
    47  pertaining thereto, through examination or otherwise, while acting under
    48  the authority of the superintendent or with whom such report or informa-
    49  tion are shared pursuant to this chapter, shall be permitted or required
    50  to testify in any private civil action concerning the report, filing, or
    51  information.
    52    § 13. Subsection (a) of section 1710 of the insurance law, as added by
    53  chapter 238 of the laws of 2013, is amended to read as follows:
    54    (a)  Any parent corporation seeking to divest its controlling interest
    55  in a domestic insurer, in any manner, shall file  with  the  superinten-
    56  dent,  with a copy to the insurer, notice of its proposed divestiture at
        S. 7095--A                         10
 
     1  least thirty days prior to the cessation of control,  provided,  however
     2  that  this  subsection shall not apply if notice is provided as required
     3  by subsection (b) of section one thousand  seven  hundred  one  of  this
     4  article.
     5    §  14.  The  opening  paragraph  of  paragraph  1 of subsection (b) of
     6  section 1712 of the insurance law, as added by chapter 238 of  the  laws
     7  of 2013, is amended to read as follows:
     8    sales,  purchases,  exchanges, loans, extensions of credit, or invest-
     9  ments with a [subsidy] subsidiary, provided the transactions  are  equal
    10  to or exceed:
    11    § 15. Section 1717 of the insurance law is amended by adding three new
    12  subsections (c), (d) and (e) to read as follows:
    13    (c) (1) A parent corporation, other than a parent corporation required
    14  to  register  as  a  controlled insurer pursuant to section one thousand
    15  five hundred three of this chapter, shall file with  the  superintendent
    16  an  annual group capital calculation by June thirtieth of each year when
    17  this state is the lead state as determined in accordance with the proce-
    18  dures within the financial analysis handbook adopted  by  the  NAIC,  as
    19  amended from time to time.
    20    (2)  When the lead state is not this state, a parent corporation shall
    21  file with the superintendent the annual  group  capital  calculation  as
    22  adopted by its lead state if the parent corporation has filed the annual
    23  group  capital calculation with the lead state but the lead state is not
    24  willing or able to share the annual group capital calculation  with  the
    25  superintendent.
    26    (3)  When  this  state is the lead state, the parent corporation shall
    27  complete the annual group capital calculation  in  accordance  with  the
    28  group capital calculation instructions, which may permit the superinten-
    29  dent to allow a subsidiary to file the annual group capital calculation.
    30    (4)  When  this state is the lead state, a parent corporation shall be
    31  exempt from filing an annual group capital calculation if it:
    32    (A) has only one insurer subsidiary that only writes business  and  is
    33  only  licensed  in  its  domestic state and assumes no business from any
    34  other insurer;
    35    (B) is required to perform a group capital  calculation  specified  by
    36  the  United  States Federal Reserve Board, except that the parent corpo-
    37  ration shall not be exempt if  the  superintendent  requests  the  group
    38  capital  calculation  from the United States Federal Reserve Board under
    39  the terms of information sharing agreements in effect  and  the  Federal
    40  Reserve Board cannot share the calculation with the superintendent;
    41    (C)  has  a  non-United  States  group-wide supervisor that is located
    42  within a reciprocal jurisdiction, as described in part one hundred twen-
    43  ty-five of title eleven of the official compilation of codes, rules  and
    44  regulations of this state, that recognizes the United States state regu-
    45  latory approach to group supervision and group capital; or
    46    (D)(i)  provides information to the superintendent, either directly or
    47  indirectly through the group-wide supervisor, who  has  determined  such
    48  information  is  satisfactory to allow the superintendent to comply with
    49  the NAIC group supervision approach, as detailed in the  NAIC  financial
    50  analysis handbook; and
    51    (ii)  has  a  non-United States group-wide supervisor that is not in a
    52  reciprocal jurisdiction that recognizes and accepts, as specified by the
    53  superintendent in a regulation, the group  capital  calculation  as  the
    54  world-wide group capital assessment for United States systems that oper-
    55  ate in that jurisdiction.
        S. 7095--A                         11
 
     1    (5)  Notwithstanding  subparagraphs  (C)  and (D) of paragraph four of
     2  this subsection, when this state is the lead state,  the  superintendent
     3  shall require the group capital calculation for United States operations
     4  of any non-United States-based system where, after any necessary consul-
     5  tation  with other supervisors or officials, it is deemed appropriate by
     6  the superintendent for  prudential  oversight  and  solvency  monitoring
     7  purposes  or  for  ensuring the competitiveness of the insurance market-
     8  place.
     9    (6) Notwithstanding the  exemptions  from  filing  the  group  capital
    10  calculation  set  forth  in paragraph four of this subsection, when this
    11  state is the lead state, the superintendent has the discretion to exempt
    12  a  parent  corporation from filing  an  annual group capital calculation
    13  or accept a limited annual group capital calculation filing or report in
    14  accordance with criteria as specified by the superintendent in  a  regu-
    15  lation.
    16    (7)  When  this  state is the lead state, if the superintendent deter-
    17  mines that a parent corporation no longer  meets  one  or  more  of  the
    18  requirements  for an exemption from filing the group capital calculation
    19  under this subsection, the parent corporation shall file the group capi-
    20  tal calculation at the next annual filing date unless given an extension
    21  by the superintendent based on reasonable grounds shown.
    22    (d)(1) A parent corporation, other than a parent corporation  required
    23  to  register  as  a  controlled insurer pursuant to section one thousand
    24  five hundred three of this chapter, that has a subsidiary that is scoped
    25  into the NAIC liquidity stress test framework shall file the results  of
    26  a  specific  year's  liquidity  stress test with the superintendent when
    27  this state is the lead state as determined by the procedures within  the
    28  financial analysis handbook adopted by the NAIC and as amended from time
    29  to time.
    30    (2)  When the lead state is not this state, a parent corporation shall
    31  file with the superintendent the results of a specific year's  liquidity
    32  stress  test  as adopted by its lead state if the parent corporation has
    33  filed the results with the lead state but the lead state is not  willing
    34  or able to share the results with the superintendent.
    35    (3)  When this state is the lead state, the performance of, and filing
    36  of the results from, a  specific  year's  liquidity  stress  test  shall
    37  comply with the NAIC liquidity stress test framework.
    38    (4) When the lead state is this state, any change to the NAIC liquidi-
    39  ty  stress test framework or to the data year for which the scope crite-
    40  ria are to be measured shall be effective on January first of  the  year
    41  following the calendar year when such changes are adopted.
    42    (5) When this state is the lead state, an insurer meeting at least one
    43  threshold of the scope criteria shall be considered scoped into the NAIC
    44  liquidity  stress  test framework for the specified data year unless the
    45  superintendent, in consultation with the NAIC financial  stability  task
    46  force, or its successor, determines the insurer shall not be scoped into
    47  the NAIC liquidity stress test framework for that data year.
    48    (6)  When this state is the lead state, an insurer that does not trig-
    49  ger at least one threshold of the scope  criteria  shall  be  considered
    50  scoped out of the NAIC liquidity stress test framework for the specified
    51  data  year,  unless  the  superintendent,  in consultation with the NAIC
    52  financial stability task force, or its successor, determines the insurer
    53  shall be scoped into the NAIC liquidity stress test framework  for  that
    54  data year.
    55    (7)  The  superintendent,  in  consultation  with  the  NAIC financial
    56  stability task force, or its successor,  shall  assess  the  concern  of
        S. 7095--A                         12
 
     1  wishing to avoid having insurers scoped in and out of the NAIC liquidity
     2  stress  test  framework on a frequent basis as part of the determination
     3  for an insurer.
     4    (e)  No  insurer,  insurance  producer,  or  other  person shall make,
     5  publish, disseminate, circulate, issue, or place before the  public,  or
     6  cause directly or indirectly to be made, published, disseminated, circu-
     7  lated,  issued, or placed before the public, in this state, in a newspa-
     8  per, magazine, or other publication, or in the form of a notice,  circu-
     9  lar,  pamphlet,  letter,  or  poster,  or  over  any radio or television
    10  station or any electronic means  of  communication  available    to  the
    11  public, or in any other way as an advertisement, announcement, or state-
    12  ment  containing  a representation or statement with regard to the group
    13  capital calculation, group capital   ratio,   liquidity   stress    test
    14  results  or supporting   disclosures   for   such test, or any component
    15  derived in the calculation  thereof,  of  any  parent  corporation    or
    16  subsidiary  thereof, provided,  however,  that  a parent corporation may
    17  publish, with the superintendent's prior approval,  announcements  in  a
    18  written publication to rebut any materially false statement with respect
    19  to  the  foregoing  if  the insurer is able to demonstrate to the super-
    20  intendent with substantial proof the falsity of such  statement  or  the
    21  inappropriateness,  as  the  case may be, and if the sole purpose of the
    22  announcement is to rebut the materially false statement.
    23    § 16. The insurance law is amended by adding a  new  section  1718  to
    24  read as follows:
    25    §  1718.  Expenses  for  group-wide  supervision. A parent corporation
    26  shall be liable for and shall pay the reasonable expenses of the  super-
    27  intendent's  participation  in  the  administration of group-wide super-
    28  vision of internationally active insurance groups, including the engage-
    29  ment of attorneys,  actuaries,  and  any  other  professionals  and  all
    30  reasonable travel expenses.
    31    § 17. This act shall take effect immediately.