senate Bill S6507

Signed by Governor Amended

Relates to increasing the aggregate cap on liabilities for life insurers under the life insurance guaranty corporation

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor
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actions

  • 17 / Feb / 2012
    • REFERRED TO INSURANCE
  • 05 / Mar / 2012
    • REPORTED AND COMMITTED TO FINANCE
  • 16 / Mar / 2012
    • AMEND (T) AND RECOMMIT TO FINANCE
  • 16 / Mar / 2012
    • PRINT NUMBER 6507A
  • 29 / Mar / 2012
    • REPORTED AND COMMITTED TO RULES
  • 29 / Mar / 2012
    • ORDERED TO THIRD READING CAL.479
  • 29 / Mar / 2012
    • PASSED SENATE
  • 29 / Mar / 2012
    • DELIVERED TO ASSEMBLY
  • 30 / Mar / 2012
    • REFERRED TO INSURANCE
  • 21 / May / 2012
    • SUBSTITUTED FOR A9607
  • 21 / May / 2012
    • ORDERED TO THIRD READING CAL.600
  • 21 / May / 2012
    • PASSED ASSEMBLY
  • 21 / May / 2012
    • RETURNED TO SENATE
  • 06 / Jul / 2012
    • DELIVERED TO GOVERNOR
  • 18 / Jul / 2012
    • SIGNED CHAP.217

Summary

Relates to increasing the aggregate cap on liabilities for life insurers under the life insurance guaranty corporation for the purposes of determining assessments on insurers.

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Bill Details

Versions:
S6507
S6507A
Legislative Cycle:
2011-2012
Law Section:
Insurance Law
Laws Affected:
Amd ยง7709, Ins L

Votes

16
0
16
Aye
0
Nay
2
aye with reservations
0
absent
0
excused
0
abstained
show Insurance committee vote details

Sponsor Memo

BILL NUMBER:S6507

TITLE OF BILL:
An act
to amend the insurance law, in relation to the life insurance company
guaranty corporation of New York

PURPOSE:
This amendment to Article 77 of the insurance law (the Life
Insurance Company Guaranty Corporation of New York -- "LICGC") is
necessary to ensure that the LICGC will have sufficient statutory
authority to fund the guaranty association benefits required in
connection with the insolvency of Executive Life Insurance Company of
New York (ELNY). This insolvency is expected to be declared by court
order in March of 2012 and will require the imposition of
assessments on life insurers in an amount greater than the current
guaranty law limit of $500 million.
This amendment would increase that assessment limit to $575 million
and thereby provide the LICGC sufficient authority to cover the
statutory obligations to ELNY beneficiaries contained in the current
life insurance guaranty law.

SUMMARY OF PROVISIONS:
This bill would amend paragraph (1) of
subsection (e) of section 7709 of the insurance law to increase the
aggregate, total authority to assess members of the Life Insurance
Company Guaranty Corporation of New York (life insurance companies
licensed to do business in New York) to $575 million.

EXISTING LAW:
Current law caps the total, aggregate assessment amount
at $500 million.

JUSTIFICATION:
Article 77 of the insurance law (Life Insurance
Company Guaranty Corporation of New York - "LICGC") was enacted in
1985 for the purpose of providing a mechanism for the funding of
protections to New York residents insured under a life insurance
policy or annuity contract due to losses that they may incur because
of the insolvency of the life insurer which issued such policies or
contracts. Every life insurance company which is licensed to do
business in New York is a member of the Corporation and is assessed
upon the insolvency of a member life insurer to cover certain losses
to the policy or contract holder of that insolvent insurer (up to
$500,000 per policy or contract under most circumstances). The
current law also caps the total, aggregate amount that life insurers
may be assessed pursuant to the law at $500 million.

This bill seeks to amend Article 77 to increase the aggregate, total
assessment amount by $75 million, thus making the new limit $575
million. The amendment is necessary at this time to ensure that the

policy and contract holder benefits provided for under the current
life insurance guaranty law can be fully funded with respect to the
impending insolvency of the Executive Life Insurance Company of New
York (ELNY). ELNY has been in rehabilitation under the operational
control of the New York Liquidation Bureau for over twenty years.
During that time, the assets of the company have deteriorated to the
extent that the total obligations to policy and contract holders that
the LICGC will be required to pay once ELNY is declared insolvent by
the court will exceed $500 million. Without this increase in the
aggregate amount that the LICGC can assess life insurers, the limit
in the current law will be exhausted before the policy and contract
holder coverage required under the guaranty law can be satisfied.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
No current year fiscal impact. Fiscal impact in
subsequent years to be determined.

EFFECTIVE DATE:
Immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6507

                            I N  S E N A T E

                            February 17, 2012
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation  to  the  life  insurance
  company guaranty corporation of New York

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 1 of subsection (e) of section 7709 of the insur-
ance law, as added by chapter 802 of the laws of  1985,  is  amended  to
read as follows:
  (1)  The  total assessment against all member insurers for all impair-
ments and insolvencies, less the amount of refunds (not including inter-
est) to member insurers pursuant to  subsection  (f)  of  this  section,
shall not exceed five hundred SEVENTY-FIVE million dollars.
  S 2. This act shall take effect immediately.







 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14723-01-2

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