S T A T E O F N E W Y O R K
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9014--A
2009-2010 Regular Sessions
I N A S S E M B L Y
June 19, 2009
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Introduced by M. of A. CARROZZA -- read once and referred to the Commit-
tee on Insurance -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the insurance law, in relation to an exemption to
certain provisions of law relating to risk-based capital for
property/casualty insurance companies; and in relation to the finan-
cial regulation of medical malpractice liability insurance companies;
and to repeal certain provisions of such law relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subsection (a) of section 1301 of the insurance law is
amended by adding two new paragraphs 19 and 20 to read as follows:
(19) FOR THOSE STOCK AND NON-STOCK COMPANIES TO WHICH SUBPARAGRAPH (B)
OF PARAGRAPH TWO OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED
TWENTY-FOUR OF THIS ARTICLE APPLY, THE AMOUNT OF THE SURCHARGE ON PREMI-
UMS TO SATISFY A PROJECTED DEFICIENCY THAT IS ATTRIBUTABLE TO THE PREMI-
UM LEVELS ESTABLISHED PURSUANT TO SECTION FORTY OF CHAPTER TWO HUNDRED
SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED EIGHTY-SIX, AS SUCH SURCHARGE
IS PROVIDED IN SUCH CHAPTER, WHETHER OR NOT SUCH SURCHARGE IS ACTUALLY
IMPOSED BY THE SUPERINTENDENT; PROVIDED, HOWEVER, THAT SUCH SURCHARGES,
IF IMPOSED, WILL BE SUBJECT TO THE LIMITATIONS PROVIDED FOR IN THIS
CHAPTER RELATING TO THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.
(20) FOR RECIPROCAL INSURERS ORGANIZED AND LICENSED PURSUANT TO ARTI-
CLE SIXTY-ONE OF THIS CHAPTER TO WRITE MEDICAL MALPRACTICE INSURANCE AS
THAT TERM IS DEFINED IN SUBSECTION (B) OF SECTION FIVE THOUSAND FIVE
HUNDRED ONE OF THIS CHAPTER, THE AMOUNT OF ANY ASSESSMENT AUTHORIZED BY
SUBSECTIONS (A) AND (B) OF SECTION SIX THOUSAND ONE HUNDRED EIGHT OF
THIS CHAPTER; PROVIDED, HOWEVER, THAT SUCH ASSESSMENTS, IF IMPOSED, WILL
BE SUBJECT TO THE LIMITATIONS PROVIDED FOR IN THIS CHAPTER RELATING TO
THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11667-07-9
A. 9014--A 2
S 2. Section 1311 of the insurance law is amended by adding a new
subsection (e) to read as follows:
(E) IN DETERMINING THE TOTAL ADMITTED ASSETS OF AN INSURER THE SUPER-
INTENDENT SHALL INCLUDE IN SUCH DETERMINATION ALL ASSETS ALLOWED AS
ADMITTED ASSETS PURSUANT TO SUBSECTION (A) OF SECTION ONE THOUSAND THREE
HUNDRED ONE OF THIS ARTICLE.
S 3. Section 1325 of the insurance law is REPEALED and a new section
1325 is added to read as follows:
S 1325. EXEMPTION. (A) FOR THE PURPOSES OF EXEMPTING CERTAIN INSURANCE
COMPANIES FROM THE PROVISIONS OF SECTION ONE THOUSAND THREE HUNDRED
TWENTY-FOUR OF THIS ARTICLE, THE SUPERINTENDENT SHALL EXEMPT THOSE STOCK
AND NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH
TWO OF SUBSECTION (B) OF SUCH SECTION APPLIES.
(B) THE SUPERINTENDENT SHALL NO LATER THAN JUNE THIRTIETH, TWO THOU-
SAND ELEVEN PROMULGATE, FOR APPLICATION DURING THE NEXT SUCCEEDING
CALENDAR YEAR, AND AFTER CONSULTATION WITH THE COMMISSIONER OF HEALTH
AND DOMESTIC MEDICAL MALPRACTICE INSURERS WRITING MEDICAL MALPRACTICE
INSURANCE IN THIS STATE, A REGULATION WHICH PROVIDES A SEPARATE FINAN-
CIAL SECURITY STANDARD AND RATE APPROVAL PROCESS FOR THOSE STOCK AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF
THIS CHAPTER APPLY. SUCH STANDARD SHALL BE SUFFICIENTLY DISTINCT FROM
THAT PROVIDED FOR IN THIS CHAPTER OR RELATED REGULATION OR UTILIZED BY
THE SUPERINTENDENT IN THE EXAMINATION OF PROPERTY AND CASUALTY CARRIERS
SO AS TO REFLECT THE UNIQUE MARKET, FINANCIAL AND LEGAL OBLIGATIONS
IMPOSED UPON MEDICAL MALPRACTICE INSURANCE CARRIERS. FURTHER, THE REGU-
LATION SHALL INCLUDE NEW STATUTORY FINANCIAL STATEMENT BLANKS AND EXAM-
INATION PROTOCOLS CONSISTENT WITH THE NEW STANDARD.
(C) UNTIL SUCH TIME AS THE SUPERINTENDENT PROMULGATES REGULATIONS IN
ACCORDANCE WITH SUBSECTION (B) OF THIS SECTION, THOSE STOCK AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF
THIS CHAPTER APPLIED, AND NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO
THE CONTRARY, A CARRIER MAY FILE FOR AND USE A RATE INCREASE NOT TO
EXCEED FIVE PERCENT OF THE CARRIER'S CURRENT RATE UPON A FILING WITH THE
SUPERINTENDENT FOR THE NEXT SUCCEEDING POLICY YEAR IF SUCH SUBMISSION IS
FILED WITH THE SUPERINTENDENT NO LATER THAN JULY FIFTEENTH OF THE YEAR
PRIOR TO WHICH IT IS TO BE APPLIED. IF A CARRIER DOES NOT FILE SUCH
RATE ADJUSTMENT WITHIN SUCH TIME FRAME, THEN SUCH INSURER SHALL BE
SUBJECT TO THE RATE APPROVAL PROCESS IN PLACE AT THE TIME THIS SECTION
SHALL TAKE EFFECT.
S 4. The insurance law is amended by adding a new section 1326 to read
as follows:
S 1326. STATUTORY ASSOCIATION MEMBERSHIP. FOR THOSE STOCK AND
NON-STOCK COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO OF
SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF THIS
ARTICLE APPLY, NO LIABILITIES ARISING FROM ANY MEMBERSHIP IN ANY STATU-
TORY ASSOCIATION SHALL BE DUE AND OWING FROM SUCH COMPANIES UNLESS AND
UNTIL SUCH LIABILITIES CAN ONLY BE SATISFIED BY A CONTRIBUTION FROM THE
INSURER, AND THE INSURER IS NOTIFIED OF SAME NOT LESS THAN ONE YEAR
PRIOR TO THE EXPECTED DATE THAT SUCH OBLIGATION WILL BE DUE AND OWING.
SUCH LIABILITIES SHALL NOT BE AGGREGATED AND SHALL NOT INCLUDE CONTIN-
GENT LIABILITIES, BUT REFLECT SPECIFIC CLAIMS LIABILITIES ACTUALLY DUE
AND OWING OR EXPECTED TO BE DUE AND OWING IN THAT YEAR FOR WHICH THERE
ARE NO OTHER ASSOCIATION OR POOL RESOURCES, INCLUDING CURRENT PREMIUM
INCOME, TO SATISFY SUCH OBLIGATIONS; FURTHER, COMPANIES, UPON RECEIPT OF
A. 9014--A 3
NOTICE OF SUCH OBLIGATION, SHALL HAVE THE RIGHT TO AUDIT ANY SUCH ASSO-
CIATION AND ITS REQUEST FOR COVERAGE OF SUCH LIABILITIES.
S 5. Subsection (c) of section 2343 of the insurance law, as amended
by section 27 of part B of chapter 58 of the laws of 2008, is amended to
read as follows:
(c) Notwithstanding any other provision of this chapter, no applica-
tion for an order of rehabilitation or liquidation of a domestic insurer
whose primary liability arises from the business of medical malpractice
insurance, as that term is defined in subsection (b) of section five
thousand five hundred one of this chapter, shall be made on the grounds
specified in subsection (a) or (c) of section seven thousand four
hundred two of this chapter at any time [prior to June thirtieth, two
thousand eleven].
S 6. Subsection (b) of section 6108 of the insurance law is amended to
read as follows:
(b) If the admitted assets of any such insurer are at any time insuf-
ficient for the payment of losses and expenses after providing for all
other liabilities of such insurer and the minimum surplus to policyhold-
ers required by this chapter, the advisory committee shall, within thir-
ty days thereafter, order an assessment for the amount necessary to pay
such losses and expenses, and authorize the attorney-in-fact to collect
from each subscriber liable therefor a pro rata share of the amount of
such assessment, subject to the limit specified in the contract of such
subscriber and to maintain an action therefor in the name of the attor-
ney-in-fact. FOR THE PURPOSES OF THIS SUBSECTION, ADMITTED ASSETS SHALL
INCLUDE A PRESUMPTION OF A SURCHARGE OR ASSESSMENT, WHERE APPLICABLE, OR
BOTH, HAVING BEEN AUTHORIZED BY THE ADVISORY COUNCIL OR DIRECTED BY THE
SUPERINTENDENT CONSISTENT WITH THE TERMS OF THE SUBSCRIBERS' CONTRACTS
AND COLLECTED BY AN INSURER.
S 7. Subsection (c) of section 6111 of the insurance law is amended to
read as follows:
(c) The contingent liability of subscribers for additional premiums or
assessments shall [not] be included as an asset in the financial state-
ment of a reciprocal insurer.
S 8. This act shall take effect immediately.