NY State Senate Bill 2009-S643

Senate Bill S643

2009-2010 Legislative Session

Enacts the "New York state catastrophe fund authority act"; appropriates $10,000,000 therefor

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Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to insurance
Mar 18, 2009	committee discharged and committed to insurance
Jan 12, 2009	referred to finance

2009-S643 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Appropriations
Laws Affected:: Add Art 92 §§9201 - 9210, Ins L

2009-S643 (ACTIVE) - Summary

Enacts the "New York state catastrophe fund authority act" for the purpose of facilitating the creation of innovative solutions to property insurance crises and to ensure the viability of insurance carriers in the state; appropriates $10,000,000 to initiate such fund.

2009-S643 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S643

 TITLE OF BILL :

An act to amend the insurance law, in relation to establishing the New
York state catastrophe fund authority act and making an appropriation
therefor


 PURPOSE :

This is a study bill to obtain comments on establishing a New York
State Catastrophe Fund Authority. Once established, this Fund could be
expanded to cover catastrophic losses in other states or regions of
the country. Such an Authority, if established, could help to
stabilize the property/casualty insurance market for residential and
commercial properties in this state if a mega catastrophe affected New
York.

The purpose of this bill is to develop, on a consensus basis, a
financing mechanism to facilitate the accumulation of surplus capital
so that money will be available should a covered catastrophic event
strike the state. In addition, a regional or national approach may be
needed to address catastrophic losses in the United States. However,
the U.S. Congress has been hesitant to begin discussions on
establishing such a federally sponsored national catastrophe fund.

Instead, Washington seems to want to rely on a Ad Hoc response to
reacting to and recovering from natural disasters as they strike.

The States should not wait for the Federal Government to establish a
coherent and rapid response to catastrophic events. One of the
purposes of this bill is to establish a state-based financing
mechanism to respond to catastrophic events. Establishing a vehicle
such as a Catastrophe Fund that individual states can quickly join, at
their own initiative, would address the need of certain states to
rapidly create a financing system so that money would be available to
quickly respond to a natural disaster. The success of any Cat. Fund is
based on the need to spread risk over a wide and diverse geographical
area. Establishing a Cat. Fund that addresses the insurance needs of a
multitude of states should encourage more states to join such a Fund,
and thereby increase its ability to serve the risk management needs of
each individual state.

This bill will be submitted to the National Conference of Insurance
Legislators and the National Association of Insurance Commissioners
for discussion, comment and review. It is the sponsors' hope that this
legislation can be used as a vehicle to develop a multi-state
Catastrophe Fund that satisfies the needs of States that wish to
prepare disaster mitigation plans  BEFORE  the catastrophic event hits
and facilitate the financing of rebuilding activities  AFTER  the
event occurs to reduce the time needed to rebuild devastated
communities.

 SUMMARY OF PROVISIONS :

Section 1 & 2: Short title and Legislative findings.

Section 3: Adds Article 92 to the Insurance Law to establish the New
York State Catastrophe Fund Authority. The article sets out how the
Fund is to be established, financed, and administered. Further, it
lays out the standards the Authority should use in formulating and
approving reimbursement contracts and the methodology for setting
reimbursement premium rates. The article details how the Authority
will operate and ensure that all monies transferred to the Fund will
be exempt from Federal & state taxes and insulated so that New York

State or any other participating jurisdiction will not be able to raid
the fund to support unrelated budgetary items.

This bill is modeled after the already existing Florida Hurricane
Catastrophe Fund with some significant differences. The differences
are outlined below:

Most importantly, the New York Fund would be managed by a public
authority so that the fund could not be raided or money shifted from
the Fund to the New York State General Fund to be used for other
general public uses. The thrust of the Fund is to have a readily
accessible source of cash to rebuild communities after a natural
disaster strikes. A Cat. Fund, whose only asset is dry appropriation
notes guaranteed by the State of New York, would be of no use should a
storm hit New York's coastal areas.

Section 9201(d) expands the definition of "covered event" in several
ways. First, the NY Cat.  Fund Authority expands the number of covered
perils and lines of business that are included when compared to the
Florida Hurricane Catastrophe Fund. The Florida Hurricane Cat. Fund
covers residential properties, while the New York Fund would cover
both residential and commercial properties. Second, it expands the
number of covered events that are included when compared to the
Florida Hurricane Catastrophe Fund. The Florida Fund covers hurricane
damage (i.e. wind damage), while the New York Fund would include, wind
borne damage (including wind-borne water damage), ice storm damage,
earthquakes, and other catastrophic events caused by nature or acts of
God. The reason earthquake perils are covered is so that if, at some
point, it is advantageous to merge with the California Earthquake
Authority, the New York Authority will be able to do so.

Section 9201(k) has approximately the same loss threshold contained in
the Florida Hurricane Cat. Fund ($4.5 Billion in 2005 and $ 5.3
Billion in 2006) before payments can be transferred from the NY Cat.
Authority to primary insurance carriers for covered losses ($6
Billion). The New York threshold of $ 6 Billion would increase each
year at the same percentage as the growth rate in premiums for covered
policies. State sponsored Cat. Funds should cover only truly
catastrophic events so that the international reinsurance market can
accumulate private capital to cover insurer losses that are under a $6
Billion threshold level or above $ 15 Billion level for each covered
event.

In addition, the New York Cat. Authority caps its liability to pay for
catastrophic damage at $15 Billion per covered event. This is the same
approximate level as is contained in the Florida Hurricane Cat.  Fund.

In addition, Section 9201(k), unlike the Florida Hurricane Cat. Fund,
the New York Authority does not set out definitive coverage levels at
90 percent, 75 percent, or 45 percent. It permits the Authority to
establish loss coverage level bands of between 90 - 80 percent (first
coverage level), 80 - 70 percent (second coverage level), and 60 - 50
percent (third coverage level). Creating these coverage level bands
instead of fixed percentages will facilitate the ability of the
Authority to craft their contracts with primary insurers so that
coverage levels will be set at levels that best suit the needs of each
individual domestic insurer.

Section 9202-b expands the general powers of the New York Authority so
that it includes all of the general powers of the existing Florida
Fund that covers Florida perils to also include the ability to invest
in prudent catastrophe notes, bonds, options, swaps and risk futures
or other prudent financial instruments to maximize the financial
capacity of the fund. It is important to maximize the financial
capacity of the fund so that it is able to cover catastrophic covered
events that occur in New York.
Section 9203(b) includes provisions so that New York domestic insurers
can select from a wider array of catastrophic coverage levels to
better suit their individual businesses and book of business.

Like the Florida Hurricane Fund, the New York Authority, if it has no
money available to pay claims after a catastrophic event has hit, can
assess a fee on all property/casualty insurers in the state of no more
than 2 percent of the gross direct written premium in the entire
state. Section 9205 (c) is different from the Florida Cat. Fund in
that the Authority can also assess, in lieu of a state-wide fee, a fee
of 2 percent or less based on a smaller geographical region than the
entire state that has been hit by a catastrophic event. Upon a
declared emergency by the Governor, an assessment of up to 4 percent
can be levied, but under no circumstances can an annual assessment of
10 percent or more be levied even if there are 3 or more covered
events in one year.

Section 9206(c) authorizes the Authority to develop new financing
mechanisms to maximize the capacity of the Fund. The Authority should
work specifically with national and international reinsurers to
develop financial instruments so that reinsurers, insurers, and banks
can place capital with the fund and receive commensurate federal and
state income and franchise tax deductions, credits or deferrals.

Section 9206(c) also authorizes various public and private
organizations and businesses to work together to develop new ways to
mitigate catastrophic losses from a natural event before, during and
after the event. Further, it puts particular emphasis on increasing
the speed of recovery of local social, economic and political
institutions, businesses, and infrastructure after a covered
catastrophic event has occurred.

Section 9209 specifically mandates the New York Cat. Fund Authority to
work with other existing Catastrophe Funds to merge operations and/or
jointly or in a cooperative manner, provide insurance coverages or set
premium rates. This can be done by facilitating the expansion of the
New York Fund to include catastrophic coverages incurred in other
states (if adequate premiums are paid to the New York Fund) or merging
with other already existing federal, regional or state Cat.  Funds.

Section 4: Appropriates $10 million to the Authority.

 EXISTING LAW :

None.

 JUSTIFICATION :

The national and New York residential and commercial property
insurance market has become tighter due to the massive losses
sustained by property/casualty insurers due to recent hurricanes,
floods and other natural disasters across the country. To promote
economic growth and to ensure that there is a mechanism in place to
rapidly pay claims and rebuild communities if a catastrophic event
occurs, this bill establishes a catastrophic fund authority as a back
stop financial entity to ensure that insurers have the financial
ability to pay claims and continue business operations after the
covered event.

The catastrophic losses sustained in hurricanes Andrew, Katrina, Rita,
and Wilma, earthquakes in California and the ice storms in New York
highlight the need to establish either reinsurance safeguards, a
catastrophe fund, or some other risk sharing mechanism so that there
will be sufficient financial resources to recover and rebuild after a
catastrophic event has occurred. This bill suggests a mechanism by
which insurers can obtain additional and affordable reinsurance
protection from significant natural disasters. This could help
property/casualty insurers to remain solvent should a catastrophe hit,
pay claims on a timely basis, and very importantly, allow carriers to
 CONTINUE TO  write more residential and commercial insurance to
protect local homes and businesses with minimal increases in premiums
 AFTER  a catastrophic event occurs.

One goal of introducing this bill is to develop, on a consensus
manner, a financing mechanism so that should a natural disaster hit,
policy holders will be able to quickly receive cash payments from
their insurers to facilitate home reconstruction. The fund is to be
managed by a public authority so that it can receive both state and
federal tax exempt status to allow capital to build up more quickly
and discourage the State from raiding such a fund.

Since Washington has been reluctant to begin to plan for future mega
natural disasters and has relied instead on an Ad Hoc basis to respond
to such events and finance recovery efforts, the States must join
forces to develop their own mechanism to mitigate against the loss of
life and property damage caused by future natural disasters and
facilitate reconstruction after the event.

This bill will be submitted to the National Conference of Insurance
Legislators and the National Association of Insurance Commissioners to
add to the ongoing discussions that are occurring to develop and
implement either a multi-state or national catastrophe fund or some
other risk sharing mechanism to finance reconstruction of communities
after a natural disaster has occurred.

 LEGISLATIVE HISTORY :

Same as S.6673/A.9885 of 2005/2006.  Portions of this bill were
derived from Senate Bill 2826 (Velella) of 1997.  S.1883 of 2007/2008

 FISCAL IMPLICATIONS :

$10 million.

 LOCAL FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
Immediate.

2009-S643 (ACTIVE) - Bill Text download pdf

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

                                   643

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            January 12, 2009
                               ___________

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

AN ACT to amend the insurance law, in relation to establishing  the  New
  York  state catastrophe fund authority act and making an appropriation
  therefor

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

  Section  1.  Short  title. This act shall be known and may be cited as
the "New York state catastrophe fund authority act".
  S 2. Legislative findings and declaration.  The legislature finds  and
declares:
  1.  There  is  a  compelling  state  interest to maintain a viable and
orderly private sector property/casualty insurance market for both resi-
dential and commercial properties in this state and  across  the  United
States.  To  the extent that the private sector is unable to maintain an
orderly market, due to catastrophic losses from natural disasters, state
action to maintain an orderly insurance market is a  necessary  exercise
of police power;
  2. As a result of scores of billions of dollars in insured losses from
natural disasters this past year across the nation and the world, due to
either  chance  or  as a result of global warming, numerous insurers are
now beginning to reduce their loss exposure from  natural  disasters  by
pulling  out of certain insurance markets.  The potential instability of
the world reinsurance market, which has been caused  in  part  by  these
events,  has  also increased pressure on direct insurers to reduce their
risk exposure from a catastrophic loss;
  3. The formation of a public authority  to  provide  reimbursement  to
insurers  for a portion of their catastrophic losses should create addi-
tional insurance capacity to  ameliorate  the  current  dangers  to  the
state's economy and to the public health, safety and welfare; and

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05228-01-9

S. 643                              2

  4. To increase insurance industry capacity to cover insured losses, it
is  essential  that  revenues  received by such authority be exempt from
federal and state taxation. It is therefore the intent of  the  legisla-
ture  that  this  program be structured as a public authority to operate
the  fund.    Furthermore, funds held by such fund will be protected and
remain available to pay for catastrophic losses and not used  for  state
budget general fund expenditures.
  S  3.  The insurance law is amended by adding a new article 92 to read
as follows:
                               ARTICLE 92
                NEW YORK STATE CATASTROPHE FUND AUTHORITY
SECTION 9201.   DEFINITIONS.
        9202.   NEW YORK STATE CATASTROPHE FUND.
        9202-A. NEW YORK STATE CATASTROPHE FUND AUTHORITY.
        9202-B. GENERAL POWERS OF THE AUTHORITY.
        9203.   REIMBURSEMENT CONTRACTS.
        9204.   REIMBURSEMENT PREMIUMS.
        9205.   REVENUE BONDS.
        9206.   ADDITIONAL POWERS AND DUTIES.
        9206-A. NOTES AND BONDS OF THE AUTHORITY.
        9206-B. AGREEMENT OF THE STATE.
        9206-C. NOTES AND BONDS AS LEGAL INVESTMENT.
        9207.   ADVISORY COUNCIL.
        9208.   VIOLATIONS.
        9209.   INTERNATIONAL, FEDERAL, STATE,  REGIONAL  OR  MULTISTATE
                  CATASTROPHE FUNDS.
        9210.   FUND ASSETS UPON TERMINATION.
  S 9201. DEFINITIONS. AS USED IN THIS ARTICLE:
  (A)  "ACTUARIALLY  INDICATED"  MEANS, WITH RESPECT TO PREMIUMS PAID BY
INSURERS FOR REIMBURSEMENT PROVIDED BY THE CATASTROPHE  FUND  AUTHORITY,
AN  AMOUNT DETERMINED ACCORDING TO PRINCIPLES OF ACTUARIAL SCIENCE TO BE
ADEQUATE, BUT NOT EXCESSIVE, IN THE AGGREGATE, TO PAY CURRENT AND FUTURE
OBLIGATIONS AND EXPENSES OF THE FUND, INCLUDING  ADDITIONAL  AMOUNTS  IF
NEEDED  TO  PAY  DEBT SERVICE ON REVENUE BONDS ISSUED UNDER THIS ARTICLE
AND TO PROVIDE REQUIRED DEBT SERVICE COVERAGE IN EXCESS OF  THE  AMOUNTS
REQUIRED  TO  PAY  ACTUAL  DEBT  SERVICE  ON  REVENUE BONDS ISSUED UNDER
SECTION NINE THOUSAND TWO HUNDRED FIVE OF THIS ARTICLE,  AND  DETERMINED
ACCORDING  TO  PRINCIPLES OF ACTUARIAL SCIENCE TO REFLECT EACH INSURER'S
RELATIVE EXPOSURE TO LOSSES FROM COVERED EVENTS.
  (B) "AUTHORITY" MEANS THE NEW YORK STATE CATASTROPHE FUND AUTHORITY.
  (C) "BOND" MEANS ANY BOND, DEBENTURE, NOTE OR OTHER EVIDENCE OF FINAN-
CIAL INDEBTEDNESS ISSUED UNDER THIS ARTICLE.
  (D) "COVERED EVENT" MEANS: (1) ANY WIND STORM,  INCLUDING  WIND  BORNE
WATER  DAMAGE,  WHICH STORM CAUSES INSURED LOSSES IN THIS STATE; (2) ALL
EARTHQUAKES THAT ARE DECLARED TO BE EARTHQUAKES  BY  THE  UNITED  STATES
GEOLOGICAL  SURVEY,  AND  WHICH CAUSES INSURED LOSSES IN THIS STATE; (3)
ALL ICE STORMS THAT ARE DECLARED BY THE UNITED STATES GOVERNMENT  TO  BE
DESIGNATED AS A NATIONAL  DISASTER; AND (4) ANY OTHER CATASTROPHIC EVENT
CAUSED  BY  NATURE  OR  AN  ACT  OF  GOD  THAT  IS  DEEMED TO BE A MAJOR
CATASTROPHIC EVENT AS DESIGNATED BY THE GOVERNOR.
  (E) "COVERED POLICY" MEANS ANY INSURANCE POLICY  COVERING  RESIDENTIAL
OR COMMERCIAL PROPERTY IN THIS STATE, INCLUDING, BUT NOT LIMITED TO, ANY
HOMEOWNER'S, MOBILE HOME OWNER'S, FARM OWNER'S, CONDOMINIUM ASSOCIATION,
CONDOMINIUM  UNIT OWNER'S, TENANT'S OR APARTMENT BUILDING POLICY, OR ANY
OTHER POLICY COVERING A RESIDENTIAL STRUCTURE OR ITS CONTENTS ISSUED  BY
ANY  AUTHORIZED INSURER, INCLUDING A POLICY ISSUED BY THE NEW YORK PROP-

S. 643                              3

ERTY INSURANCE UNDERWRITING ASSOCIATION, OR ANY INSURANCE POLICY  COVER-
ING  COMMERCIAL PROPERTIES FROM PHYSICAL DAMAGE DUE TO ACTS OF NATURE OR
ACTS OF GOD.  "COVERED POLICY" DOES NOT INCLUDE ANY  REINSURANCE  AGREE-
MENT  OR  ANY POLICY THAT EXCLUDES COVERAGE FOR THE PERIL REFERRED TO IN
SUBSECTION (D) OF THIS SECTION.
  (F) "DEBT SERVICE" MEANS THE AMOUNT REQUIRED IN ANY FISCAL YEAR TO PAY
THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, AND  INTEREST  ON  REVENUE
BONDS  AND  ANY  AMOUNTS REQUIRED BY THE TERMS OF DOCUMENTS AUTHORIZING,
SECURING OR PROVIDING LIQUIDITY FOR REVENUE BONDS NECESSARY TO  MAINTAIN
IN EFFECT ANY SUCH LIQUIDITY OR SECURITY ARRANGEMENTS.
  (G)  "DEBT SERVICE COVERAGE" MEANS THE AMOUNT, IF ANY, REQUIRED BY THE
DOCUMENTS UNDER WHICH REVENUE BONDS ARE ISSUED, WHICH AMOUNT  IS  TO  BE
RECEIVED IN ANY FISCAL YEAR IN EXCESS OF THE AMOUNT REQUIRED TO PAY DEBT
SERVICE FOR SUCH FISCAL YEAR.
  (H) "LOCAL GOVERNMENT" SHALL MEAN ANY COUNTY, CITY, TOWN OR VILLAGE.
  (I)  "LOSSES"  MEANS  DIRECT  INCURRED  LOSSES UNDER COVERED POLICIES,
EXCLUDING LOSSES ATTRIBUTABLE TO ADDITIONAL LIVING EXPENSE COVERAGES AND
EXCLUDING LOSS ADJUSTMENT EXPENSES.
  (J) "PLEDGED REVENUES" MEANS ALL OR ANY  PORTION  OF  REVENUES  TO  BE
DERIVED  FROM  REIMBURSEMENT PREMIUMS OR FROM ASSESSMENTS, AS DETERMINED
BY THE AUTHORITY.
  (K) "RETENTION" MEANS THE AMOUNT OF LOSSES BELOW WHICH AND ABOVE WHICH
AN INSURER IS NOT ENTITLED TO REIMBURSEMENT FROM THE FUND. AN  INSURER'S
RETENTION SHALL BE CALCULATED AS FOLLOWS:
  (L)  THE  AUTHORITY  SHALL  CALCULATE  AND  REPORT TO EACH INSURER THE
RETENTION MULTIPLES FOR THAT YEAR. FOR THE CONTRACT YEAR  BEGINNING  MAY
FIRST,  TWO  THOUSAND  TEN, THE RETENTION MULTIPLE SHALL BE EQUAL TO SIX
BILLION DOLLARS, DIVIDED BY THE TOTAL  ESTIMATED  REIMBURSEMENT  PREMIUM
FOR  THE  CONTRACT  YEAR;  FOR  SUBSEQUENT YEARS, THE RETENTION MULTIPLE
SHALL BE EQUAL TO SIX BILLION DOLLARS, ADJUSTED TO REFLECT THE  PERCENT-
AGE GROWTH IN PREMIUM FOR COVERED POLICIES SINCE MAY FIRST, TWO THOUSAND
TEN,  DIVIDED  BY  THE  TOTAL  ESTIMATED  REIMBURSEMENT  PREMIUM FOR THE
CONTRACT YEAR.  IN ADDITION, FOR THE CONTRACT YEAR BEGINNING MAY  FIRST,
TWO  THOUSAND TEN, THE RETENTION MULTIPLE SHALL BE ABOVE FIFTEEN BILLION
DOLLARS, DIVIDED BY THE TOTAL ESTIMATED REIMBURSEMENT  PREMIUM  FOR  THE
CONTRACT YEAR; AND FOR SUBSEQUENT CONTRACT YEARS, THE RETENTION MULTIPLE
SHALL BE ABOVE FIFTEEN BILLION DOLLARS, ADJUSTED TO REFLECT THE PERCENT-
AGE  GROWTH  IN PREMIUMS FOR COVERED POLICIES SINCE MAY FIRST, TWO THOU-
SAND TEN, DIVIDED BY THE TOTAL ESTIMATED REIMBURSEMENT PREMIUM  FOR  THE
CONTRACT  YEAR.  PARTICIPATING  INSURERS  SHALL  RETAIN LOSSES BELOW SIX
BILLION DOLLARS AND ABOVE FIFTEEN BILLION DOLLARS AS  ADJUSTED  ANNUALLY
TO  REFLECT  INCREASES OR DECREASES IN THE GROWTH IN PREMIUM FOR COVERED
POLICIES.  TOTAL REIMBURSEMENT PREMIUM FOR PURPOSES OF  THE  CALCULATION
UNDER  THIS  PARAGRAPH  SHALL BE ESTIMATED USING THE ASSUMPTION THAT ALL
INSURERS HAVE SELECTED A PERCENTAGE COVERAGE LEVEL  ESTABLISHED  BY  THE
AUTHORITY.  SUCH  PERCENTAGE COVERAGE SHALL NOT BE SET LOWER THAN EIGHTY
PERCENT NOR HIGHER THAN NINETY PERCENT.
  (2) THE RETENTION MULTIPLE DETERMINED  UNDER  PARAGRAPH  ONE  OF  THIS
SUBSECTION  SHALL  BE  ADJUSTED TO REFLECT THE COVERAGE LEVEL ELECTED BY
THE INSURER.  FOR INSURERS ELECTING THE FIRST COVERAGE LEVEL SET BY  THE
AUTHORITY PURSUANT TO SUCH PARAGRAPH, THE ADJUSTED RETENTION MULTIPLE IS
ONE HUNDRED PERCENT OF THE AMOUNT DETERMINED UNDER PARAGRAPH ONE OF THIS
SUBSECTION.    FOR  INSURERS  ELECTING  THE  SECOND COVERAGE LEVEL TO BE
ESTABLISHED BY THE AUTHORITY AT NOT MORE THAN EIGHTY  PERCENT  NOR  LESS
THAN  SEVENTY  PERCENT,  THE  RETENTION  MULTIPLE  IS ONE HUNDRED TWENTY
PERCENT OF THE AMOUNT DETERMINED UNDER PARAGRAPH ONE OF THIS SUBSECTION.

S. 643                              4

FOR INSURERS ELECTING THE THIRD COVERAGE LEVEL TO BE ESTABLISHED BY  THE
AUTHORITY  AT NOT MORE THAN SEVENTY PERCENT NOR LESS THAN FIFTY PERCENT,
THE ADJUSTED RETENTION MULTIPLE IS TWO HUNDRED  PERCENT  OF  THE  AMOUNT
DETERMINED UNDER PARAGRAPH ONE OF THIS SUBSECTION.
  (3)  AN INSURER SHALL DETERMINE ITS PROVISIONAL RETENTION BY MULTIPLY-
ING ITS PROVISIONAL REIMBURSEMENT PREMIUM  BY  THE  APPLICABLE  ADJUSTED
RETENTION  MULTIPLE,  AND SHALL DETERMINE ITS ACTUAL RETENTION BY MULTI-
PLYING ITS ACTUAL  REIMBURSEMENT  PREMIUM  BY  THE  APPLICABLE  ADJUSTED
RETENTION MULTIPLE.
  S  9202.  NEW YORK STATE CATASTROPHE FUND. THERE IS HEREBY CREATED THE
NEW YORK STATE CATASTROPHE FUND TO BE  ADMINISTERED  BY  THE  AUTHORITY.
MONEYS IN THE FUND MAY NOT BE EXPENDED, LOANED OR APPROPRIATED EXCEPT TO
PAY  OBLIGATIONS OF THE AUTHORITY ARISING OUT OF REIMBURSEMENT CONTRACTS
ENTERED INTO UNDER SECTION NINE THOUSAND TWO HUNDRED THREE OF THIS ARTI-
CLE, PAYMENT OF DEBT SERVICE ON REVENUE BONDS ISSUED UNDER SECTION  NINE
THOUSAND  TWO  HUNDRED  FIVE  OF  THIS  ARTICLE, COSTS OF THE MITIGATION
PROGRAM UNDER SECTION NINE THOUSAND TWO HUNDRED  SIX  OF  THIS  ARTICLE,
COSTS  OF  PROCURING  REINSURANCE,  AND  COSTS  OF ADMINISTRATION OF THE
AUTHORITY.  THE AUTHORITY SHALL INVEST THE MONEYS IN THE  FUND  PURSUANT
TO APPLICABLE STATE LAWS REGULATING INVESTMENT OF STATE FUNDS. EXCEPT AS
OTHERWISE  PROVIDED IN THIS ARTICLE, EARNINGS FROM ALL INVESTMENTS SHALL
BE RETAINED IN THE FUND.   THE AUTHORITY MAY ADOPT  SUCH  RULES  AS  ARE
REASONABLE  AND  NECESSARY  TO IMPLEMENT THIS ARTICLE.   SUCH RULES MUST
CONFORM TO THE LEGISLATURE'S SPECIFIC INTENT  IN  ESTABLISHING  THE  NEW
YORK  STATE  CATASTROPHE FUND, MUST ENHANCE THE FUND'S POTENTIAL ABILITY
TO RESPOND TO CLAIMS FOR COVERED EVENTS, MUST CONTAIN GENERAL PROVISIONS
SO THAT THE RULES CAN BE APPLIED WITH REASONABLE FLEXIBILITY  SO  AS  TO
ACCOMMODATE  INSURERS  IN SITUATIONS OF AN UNUSUAL NATURE OR WHERE UNDUE
HARDSHIP MAY RESULT, EXCEPT THAT SUCH FLEXIBILITY MAY  NOT  IN  ANY  WAY
IMPAIR, OVERRIDE, SUPERSEDE OR CONSTRAIN THE PUBLIC PURPOSE OF THE FUND,
AND  MUST  BE  CONSISTENT WITH SOUND INSURANCE PRACTICES.  THE AUTHORITY
MAY, BY RULE, PROVIDE FOR THE EXEMPTION FROM SECTIONS NINE THOUSAND  TWO
HUNDRED  THREE  AND  NINE  THOUSAND TWO HUNDRED FOUR OF THIS ARTICLE FOR
INSURERS WRITING COVERED POLICIES WITH LESS THAN FOUR MILLION DOLLARS IN
AGGREGATE EXPOSURE FOR COVERED POLICIES, WHICH EXPOSURE RESULTS IN A  DE
MINIMIS  REIMBURSEMENT  PREMIUM,  IF  THE  EXEMPTION DOES NOT AFFECT THE
ACTUARIAL SOUNDNESS OF THE FUND.
  S 9202-A. NEW YORK STATE CATASTROPHE FUND AUTHORITY.  THERE IS  HEREBY
CREATED  THE  "NEW  YORK STATE CATASTROPHE FUND AUTHORITY".  (A) (1) THE
AUTHORITY SHALL BE A BODY CORPORATE AND POLITIC  CONSTITUTING  A  PUBLIC
BENEFIT CORPORATION. THE AUTHORITY SHALL CONSIST OF A CHAIR AND NINETEEN
OTHER  MEMBERS.  THE  CHAIR  OF  THE AUTHORITY SHALL BE APPOINTED BY THE
GOVERNOR.  TWO OF THE NINETEEN MEMBERS SHALL BE APPOINTED ON THE WRITTEN
RECOMMENDATION OF THE MAYOR OF THE CITY OF NEW YORK.  TEN MEMBERS  SHALL
BE  APPOINTED  BY  THE GOVERNOR OF WHICH THREE OF THOSE MEMBERS SHALL BE
THE SUPERINTENDENT AND THE COMMISSIONERS OF  TAXATION  AND  FINANCE  AND
TRANSPORTATION.  THE  STATE COMPTROLLER SHALL BE A MEMBER OF THIS BOARD.
TWO MEMBERS SHALL BE APPOINTED BY THE TEMPORARY PRESIDENT OF THE SENATE,
TWO BY THE SPEAKER OF THE ASSEMBLY, AND ONE EACH BY THE MINORITY  LEADER
OF  THE  SENATE  AND THE MINORITY LEADER OF THE ASSEMBLY.  THE CHAIR AND
EACH OF THE MEMBERS SHALL BE  APPOINTED  FOR  A  TERM  OF  THREE  YEARS,
PROVIDED  HOWEVER, THAT THE CHAIR FIRST APPOINTED SHALL SERVE FOR A TERM
ENDING JUNE THIRTIETH, TWO  THOUSAND  TWELVE,  AND  THE  EIGHTEEN  OTHER
MEMBERS  FIRST  APPOINTED  SHALL SERVE FOR THE FOLLOWING TERMS: THE FOUR
MEMBERS APPOINTED BY THE TEMPORARY  PRESIDENT  OF  THE  SENATE  AND  THE
SPEAKER  OF THE ASSEMBLY SHALL EACH SERVE FOR A TERM ENDING JUNE THIRTI-

S. 643                              5

ETH, TWO THOUSAND THIRTEEN; THE TWO MEMBERS APPOINTED ON  RECOMMENDATION
OF  THE MAYOR OF THE CITY OF NEW YORK SHALL EACH SERVE FOR A TERM ENDING
JUNE THIRTIETH, TWO THOUSAND FOURTEEN, TWO OF THE MEMBERS  APPOINTED  BY
THE  GOVERNOR  SHALL  EACH  SERVE  FOR A TERM ENDING JUNE THIRTIETH, TWO
THOUSAND FIFTEEN; TWO OF THE MEMBERS APPOINTED  BY  THE  GOVERNOR  SHALL
EACH  SERVE  FOR A TERM ENDING JUNE THIRTIETH, TWO THOUSAND SIXTEEN, TWO
OF THE MEMBERS APPOINTED BY THE GOVERNOR SHALL EACH  SERVE  FOR  A  TERM
ENDING  JUNE  THIRTIETH,  TWO THOUSAND SEVENTEEN, AND TWO OF THE MEMBERS
APPOINTED BY THE GOVERNOR SHALL SERVE FOR A TERM ENDING JUNE  THIRTIETH,
TWO THOUSAND EIGHTEEN.
  (2)  VACANCIES OCCURRING OTHERWISE THAN BY EXPIRATION OF TERM SHALL BE
FILLED IN THE SAME MANNER AS ORIGINAL APPOINTMENTS FOR  THE  BALANCE  OF
THE UNEXPIRED TERM.
  (B)  THE  CHAIR SHALL BE PAID A SALARY IN THE AMOUNT DETERMINED BY THE
AUTHORITY; THE OTHER MEMBERS SHALL NOT RECEIVE A SALARY OR OTHER COMPEN-
SATION.  EACH  MEMBER,  INCLUDING  THE  CHAIR,  SHALL  BE  ENTITLED   TO
REIMBURSEMENT FOR ACTUAL AND NECESSARY EXPENSES INCURRED IN THE PERFORM-
ANCE OF HIS OR HER OFFICIAL DUTIES.
  (C) A MAJORITY OF THE WHOLE NUMBER OF MEMBERS OF THE AUTHORITY THEN IN
OFFICE  SHALL CONSTITUTE A QUORUM FOR THE TRANSACTION OF ANY BUSINESS OR
THE EXERCISE OF ANY POWER OF THE AUTHORITY. EXCEPT AS  OTHERWISE  SPECI-
FIED  IN  THIS ARTICLE, FOR THE TRANSACTION OF ANY BUSINESS OR THE EXER-
CISE OF ANY POWER OF THE AUTHORITY, THE AUTHORITY SHALL  HAVE  POWER  TO
ACT  BY A MAJORITY VOTE OF THE MEMBERS PRESENT AT ANY MEETING AT WHICH A
QUORUM IS IN ATTENDANCE AND EXCEPT FURTHER, THAT IN THE EVENT OF  A  TIE
VOTE THE CHAIR SHALL CAST ONE ADDITIONAL VOTE.
  (D)  THE  CHAIR  SHALL BE THE CHIEF EXECUTIVE OFFICER OF THE AUTHORITY
AND SHALL BE RESPONSIBLE FOR THE DISCHARGE OF THE EXECUTIVE AND ADMINIS-
TRATIVE FUNCTIONS AND POWERS OF THE AUTHORITY. ON RECOMMENDATION OF  THE
CHAIR,  THE  AUTHORITY  SHALL APPOINT AN EXECUTIVE DIRECTOR WHO SHALL BE
RESPONSIBLE FOR THE ADMINISTRATION AND THE DAY-TO-DAY OPERATIONS OF  THE
AUTHORITY  AND  WHO  SHALL  NOT  BE A MEMBER OF THE AUTHORITY. THE CHAIR
SHALL BE EMPOWERED TO DELEGATE ANY ONE OR MORE OF HIS OR  HER  FUNCTIONS
OR  POWERS  TO THE EXECUTIVE DIRECTOR, PROVIDED, HOWEVER, THAT THE CHAIR
SHALL DELEGATE TO THE EXECUTIVE  DIRECTOR  SUCH  FUNCTIONS  AND  POWERS,
INCLUDING,  WITHOUT  LIMITATION,  THAT  OF  APPOINTMENT,  DISCIPLINE AND
REMOVAL OF OFFICERS OR EMPLOYEES, AS ARE  NECESSARY  FOR  THE  EXECUTIVE
DIRECTOR TO DISCHARGE HIS OR HER RESPONSIBILITIES.
  (E)  THE  AUTHORITY  SHALL  BE  A  "STATE  AGENCY" FOR THE PURPOSES OF
SECTIONS SEVENTY-THREE AND SEVENTY-FOUR OF THE PUBLIC OFFICERS LAW.
  (F) THE GOVERNOR MAY REMOVE ANY MEMBER OF THE  AUTHORITY  FOR  INEFFI-
CIENCY,  NEGLECT OF DUTY OR MISCONDUCT IN OFFICE AFTER GIVING HIM OR HER
A COPY OF THE CHARGES AGAINST HIM OR HER AND AN OPPORTUNITY TO BE HEARD,
IN PERSON OR BY COUNSEL IN HIS OR HER DEFENSE, UPON NOT  LESS  THAN  TEN
DAYS' NOTICE. IF ANY MEMBER SHALL BE SO REMOVED, THE GOVERNOR SHALL FILE
IN THE OFFICE OF THE DEPARTMENT OF STATE A COMPLETE STATEMENT OF CHARGES
MADE AGAINST SUCH MEMBER, AND HIS OR HER FINDINGS THEREON, TOGETHER WITH
A COMPLETE RECORD OF THE PROCEEDINGS.
  S 9202-B. GENERAL POWERS OF THE AUTHORITY. EXCEPT AS OTHERWISE LIMITED
BY THIS ARTICLE, THE AUTHORITY SHALL HAVE THE POWER:
  (A) TO SUE AND BE SUED;
  (B) TO HAVE A SEAL AND ALTER THE SAME AT PLEASURE;
  (C)  TO  BORROW MONEY AND ISSUE NEGOTIABLE NOTES, BONDS OR OTHER OBLI-
GATIONS AND TO PROVIDE FOR THE RIGHTS OF THE HOLDERS THEREOF;
  (D) TO INVEST ANY FUNDS HELD IN  RESERVE  OR  SINKING  FUNDS,  OR  ANY
MONIES NOT REQUIRED FOR IMMEDIATE USE OR DISBURSEMENT, AT THE DISCRETION

S. 643                              6

OF  THE  AUTHORITY, IN (1) OBLIGATIONS OF THE STATE OR THE UNITED STATES
GOVERNMENT, (2) REASONABLY PRUDENT CATASTROPHE  NOTES,  BONDS,  OPTIONS,
SWAPS  AND  RISK FUTURES OR OTHER PRUDENT FINANCIAL INSTRUMENTS TO MAXI-
MIZE  THE  FINANCIAL CAPACITY OF THE FUND, (3) OBLIGATIONS THE PRINCIPAL
AND INTEREST OF WHICH ARE GUARANTEED BY THE STATE OR THE  UNITED  STATES
GOVERNMENT,  (4)  CERTIFICATES OF DEPOSIT OF BANKS OR TRUST COMPANIES IN
THIS STATE, SECURED, IF THE AUTHORITY SHALL SO REQUIRE,  BY  OBLIGATIONS
OF  THE  UNITED  STATES  OR  OF THE STATE OF A MARKET VALUE EQUAL AT ALL
TIMES TO THE AMOUNT OF THE DEPOSIT, AND (5) AS TO THE SAID  RESERVE  AND
SINKING  FUNDS, OTHER SECURITIES IN WHICH THE TRUSTEE OR TRUSTEES OF ANY
PUBLIC RETIREMENT SYSTEM OR PENSION FUND HAS THE  POWER  TO  INVEST  THE
MONEYS  THEREOF  PURSUANT TO ARTICLE FOUR-A OF THE RETIREMENT AND SOCIAL
SECURITY LAW, EACH SUCH RESERVE AND SINKING  FUND  BEING  TREATED  AS  A
SEPARATE FUND FOR THE PURPOSES OF ARTICLE FOUR-A OF SUCH LAW;
  (E)  TO  MAKE  AND  ALTER  BY-LAWS  FOR  ITS ORGANIZATION AND INTERNAL
MANAGEMENT, AND RULES AND REGULATIONS  GOVERNING  THE  EXERCISE  OF  ITS
POWERS AND THE FULFILLMENT OF ITS PURPOSES UNDER THIS ARTICLE;
  (F)  TO  ENTER  INTO CONTRACTS AND LEASES AND TO EXECUTE ALL NECESSARY
INSTRUMENTS;
  (G) TO ACQUIRE, HOLD AND DISPOSE OF REAL OR PERSONAL PROPERTY  IN  THE
EXERCISE OF ITS POWERS;
  (H)  TO  APPOINT SUCH OFFICERS AND EMPLOYEES AS IT MAY REQUIRE FOR THE
PERFORMANCE OF ITS DUTIES, AND TO FIX  AND  DETERMINE  THEIR  QUALIFICA-
TIONS,  DUTIES,  AND COMPENSATION AND TO RETAIN OR EMPLOY COUNSEL, AUDI-
TORS, ENGINEERS AND PRIVATE CONSULTANTS ON A CONTRACT BASIS OR OTHERWISE
FOR RENDERING PROFESSIONAL OR TECHNICAL SERVICES AND ADVICE;
  (I) TO BE A "PARTICIPATING EMPLOYER" IN THE NEW YORK STATE  AND  LOCAL
EMPLOYEES'  RETIREMENT  SYSTEM  WITH  RESPECT  TO ONE OR MORE CLASSES OF
OFFICERS AND EMPLOYEES OF SUCH AUTHORITY, AS MAY BE PROVIDED  BY  RESOL-
UTION OF SUCH AUTHORITY, OR ANY SUBSEQUENT AMENDMENT THEREOF, FILED WITH
THE  COMPTROLLER  AND  ACCEPTED  BY  HIM  OR  HER  PURSUANT  TO  SECTION
THIRTY-ONE OF THE RETIREMENT AND SOCIAL SECURITY LAW; AND
  (J) TO DO ALL THINGS NECESSARY TO CARRY OUT ITS PURPOSES AND  FOR  THE
EXERCISE OF THE POWERS GRANTED IN THIS ARTICLE.
  S 9203. REIMBURSEMENT CONTRACTS.  (A) THE AUTHORITY SHALL ENTER INTO A
CONTRACT  WITH  EACH  INSURER  WRITING COVERED POLICIES IN THIS STATE TO
PROVIDE TO THE INSURER THE REIMBURSEMENT DESCRIBED IN SUBSECTION (B)  OF
THIS SECTION, IN EXCHANGE FOR THE REIMBURSEMENT PREMIUM PAID TO THE FUND
UNDER  SECTION  NINE  THOUSAND  TWO  HUNDRED  FOUR OF THIS ARTICLE. AS A
CONDITION OF DOING BUSINESS IN THIS STATE, EACH SUCH INSURER SHALL ENTER
INTO SUCH A CONTRACT.
  (B) (1) THE CONTRACT SHALL CONTAIN A PROMISE BY THE AUTHORITY TO REIM-
BURSE THE INSURER FOR THE FIRST, SECOND  OR  THIRD  PERCENTAGE  COVERAGE
LEVEL  FOR ITS LOSSES FROM EACH COVERED EVENT IN EXCESS OF THE INSURER'S
RETENTION, PLUS FIVE PERCENT OF THE  REIMBURSED  LOSSES  TO  COVER  LOSS
ADJUSTMENT EXPENSES.
  (2)  THE INSURER MUST ELECT ONE OF THE THREE COVERAGE LEVELS SPECIFIED
IN THIS SUBSECTION AND MAY, UPON RENEWAL OF A REIMBURSEMENT CONTRACT:
  (A) ELECT A LOWER PERCENTAGE COVERAGE LEVEL IF NO REVENUE BONDS ISSUED
UNDER SUBSECTION (A) OF SECTION NINE THOUSAND TWO HUNDRED FIVE  OF  THIS
ARTICLE AFTER A COVERED EVENT ARE OUTSTANDING; OR
  (B) ELECT A HIGHER PERCENTAGE COVERAGE LEVEL.
  (3)  ALL  MEMBERS  OF  AN  INSURER  GROUP MUST ELECT THE SAME COVERAGE
LEVEL.  THE NEW YORK PROPERTY INSURANCE  UNDERWRITING  ASSOCIATION  MUST
ELECT THE FIRST PERCENTAGE COVERAGE LEVEL.

S. 643                              7

  (4) THE CONTRACT SHALL PROVIDE THAT REIMBURSEMENT AMOUNTS SHALL NOT BE
REDUCED  BY REINSURANCE PAID OR PAYABLE TO THE INSURER FROM OTHER SOURC-
ES; HOWEVER, RECOVERIES FROM SUCH OTHER  SOURCES,  TAKEN  TOGETHER  WITH
REIMBURSEMENTS  UNDER THE CONTRACT, SHALL NOT EXCEED ONE HUNDRED PERCENT
OF  THE  INSURER'S  LOSSES  FROM  COVERED EVENTS. IF SUCH RECOVERIES AND
REIMBURSEMENTS EXCEED ONE HUNDRED PERCENT OF THE INSURER'S  LOSSES  FROM
COVERED EVENTS, AND IF THERE IS NO AGREEMENT BETWEEN THE INSURER AND THE
REINSURER  TO  THE CONTRARY, ANY AMOUNT IN EXCESS OF ONE HUNDRED PERCENT
OF THE INSURER'S LOSSES SHALL BE RETURNED TO THE FUND.
  (C) THE CONTRACT SHALL ALSO PROVIDE THAT THE OBLIGATION OF THE AUTHOR-
ITY WITH RESPECT TO ALL CONTRACTS COVERING A PARTICULAR YEAR  SHALL  NOT
EXCEED  THE  BALANCE  OF  THE  FUND  AS  OF DECEMBER THIRTY-FIRST OF THE
PARTICULAR YEAR, TOGETHER WITH THE MAXIMUM AMOUNT THAT THE AUTHORITY  IS
ABLE  TO  RAISE THROUGH THE ISSUANCE OF REVENUE BONDS UNDER SECTION NINE
THOUSAND TWO HUNDRED FIVE OF THIS ARTICLE. THE  CONTRACT  SHALL  REQUIRE
THE  AUTHORITY  TO  ANNUALLY  NOTIFY  INSURERS OF THE FUND'S ANTICIPATED
BORROWING CAPACITY AT YEAR END, THE PROJECTED YEAR END  BALANCE  OF  THE
FUND,  AND  THE INSURER'S ESTIMATED SHARE OF TOTAL REIMBURSEMENT PREMIUM
TO BE PAID TO THE FUND FOR THE CONTRACT YEAR.   FOR ALL  REGULATORY  AND
REINSURANCE PURPOSES, AN INSURER MAY CALCULATE ITS PROJECTED PAYOUT FROM
THE FUND AS ITS SHARE OF THE TOTAL FUND PREMIUM FOR THE CURRENT CONTRACT
YEAR  MULTIPLIED BY THE SUM OF PROJECTED YEAR-END FUND BALANCE AND BOND-
ING CAPACITY AS REPORTED UNDER THIS SUBSECTION. IN MAY  AND  OCTOBER  OF
EACH YEAR, THE AUTHORITY SHALL PUBLISH IN THE STATE REGISTER A STATEMENT
OF  THE FUND'S ANTICIPATED BORROWING CAPACITY AND THE PROJECTED YEAR-END
BALANCE OF THE FUND FOR THE CURRENT CONTRACT YEAR.
  (D) (1) THE CONTRACT SHALL  REQUIRE  THE  INSURER  TO  REPORT  TO  THE
AUTHORITY,  AS  DIRECTED,  NO  LATER  THAN DECEMBER THIRTY-FIRST OF EACH
YEAR, AND QUARTERLY THEREAFTER, THE INSURER'S LOSSES FROM COVERED EVENTS
FOR THE YEAR. THE CONTRACT SHALL REQUIRE THE AUTHORITY TO DETERMINE  AND
PAY,  AS  SOON AS PRACTICABLE AFTER RECEIVING THESE REPORTS, THE INITIAL
AMOUNT OF REIMBURSEMENT DUE ON A PAID  BASIS  AND  ADJUSTMENTS  TO  THIS
AMOUNT BASED ON LATER LOSS INFORMATION. THE ADJUSTMENTS TO REIMBURSEMENT
AMOUNTS  SHALL  REQUIRE  THE AUTHORITY TO PAY, OR THE INSURER TO RETURN,
AMOUNTS REFLECTING THE MOST RECENT CALCULATION OF LOSSES.
  (2) IF THE AUTHORITY DETERMINES THAT THE PROJECTED YEAR-END BALANCE OF
THE FUND, TOGETHER WITH THE AMOUNT THAT THE AUTHORITY DETERMINES THAT IT
IS POSSIBLE TO RAISE THROUGH REVENUE BONDS  ISSUED  UNDER  SECTION  NINE
THOUSAND  TWO  HUNDRED  FIVE  OF  THIS  ARTICLE, ARE INSUFFICIENT TO PAY
REIMBURSEMENT TO ALL INSURERS AT THE LEVEL PROMISED IN THE CONTRACT, THE
AUTHORITY SHALL:
  (A) PAY TO EACH INSURER THE AMOUNT OF REIMBURSEMENT IT IS OWED, UP  TO
AN  AMOUNT  EQUAL  TO THE INSURER'S SHARE OF THE ACTUAL PREMIUM PAID FOR
THAT CONTRACT YEAR, MULTIPLIED  BY  THE  ACTUAL  CLAIMS-PAYING  CAPACITY
AVAILABLE FOR THAT CONTRACT YEAR.
  (B)  THEREAFTER, ESTABLISH, BASED ON REIMBURSABLE LOSSES, THE PRORATED
REIMBURSEMENT LEVEL AT THE HIGHEST LEVEL FOR WHICH  ANY  REMAINING  FUND
BALANCE OR BOND PROCEEDS ARE SUFFICIENT.
  (E)  THE CONTRACT SHALL PROVIDE THAT IF AN INSURER DEMONSTRATES TO THE
AUTHORITY THAT IT IS LIKELY  TO  QUALIFY  FOR  REIMBURSEMENT  UNDER  THE
CONTRACT,  AND  DEMONSTRATES TO THE AUTHORITY THAT THE IMMEDIATE RECEIPT
OF MONEYS IS LIKELY TO PREVENT THE INSURER FROM BECOMING INSOLVENT,  THE
AUTHORITY  SHALL  ADVANCE  TO THE INSURER, AT MARKET INTEREST RATES, THE
AMOUNTS NECESSARY TO MAINTAIN THE SOLVENCY OF THE INSURER, UP  TO  FIFTY
PERCENT  OF THE AUTHORITY'S ESTIMATE OF THE REIMBURSEMENT DUE THE INSUR-

S. 643                              8

ER. THE INSURER'S REIMBURSEMENT SHALL BE REDUCED BY AN AMOUNT  EQUAL  TO
THE AMOUNT OF THE ADVANCE AND INTEREST THEREON.
  (F)  THE CONTRACT SHALL PROVIDE THAT IN THE EVENT OF THE INSOLVENCY OF
AN INSURER, THE FUND SHALL PAY DIRECTLY TO THE PROPERTY/CASUALTY  INSUR-
ANCE  SECURITY  FUND  PROVIDED FOR IN SECTION SEVEN THOUSAND SIX HUNDRED
ONE OF THIS CHAPTER FOR THE BENEFIT OF THE  INSURER'S  POLICYHOLDERS  IN
THIS  STATE  THE NET AMOUNT OF REIMBURSEMENT MONEYS OWED TO THE INSURER.
AS USED IN THIS SUBSECTION, THE "NET AMOUNT OF ALL REIMBURSEMENT MONEYS"
MEANS THAT AMOUNT WHICH REMAINS AFTER REIMBURSEMENT FOR  PRELIMINARY  OR
DUPLICATE  PAYMENTS OWED TO PRIVATE REINSURERS OR OTHER INURING REINSUR-
ANCE PAYMENTS TO PRIVATE REINSURERS THAT SATISFY STATUTORY OR CONTRACTU-
AL OBLIGATIONS OF THE INSOLVENT INSURER ATTRIBUTABLE TO  COVERED  EVENTS
TO  SUCH  REINSURERS.  SUCH  PRIVATE  REINSURERS  SHALL BE REIMBURSED OR
OTHERWISE PAID PRIOR TO PAYMENT TO THE PROPERTY/CASUALTY INSURANCE SECU-
RITY FUND PROVIDED FOR IN SECTION SEVEN THOUSAND SIX HUNDRED ONE OF THIS
CHAPTER, NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY. THE
GUARANTY ASSOCIATION SHALL PAY ALL  CLAIMS  UP  TO  THE  MAXIMUM  AMOUNT
PERMITTED  BY  ARTICLE  SEVENTY-SIX  OF  THIS  CHAPTER;  THEREAFTER, ANY
REMAINING MONEYS SHALL BE PAID PRO RATA TO CLAIMS NOT FULLY SATISFIED.
  (G) THE AUTHORITY SHALL AFTER  CONSULTATION  WITH  THE  SUPERINTENDENT
ADOPT  THE INITIAL CONTRACT FORM NO LATER THAN DECEMBER FIRST, TWO THOU-
SAND NINE AND MUST ADOPT THE INITIAL PREMIUM FORMULA NO LATER THAN JANU-
ARY FIRST, TWO THOUSAND TEN.  INITIAL REIMBURSEMENT CONTRACTS UNDER THIS
ARTICLE MUST BE ENTERED INTO NO EARLIER THAN FEBRUARY FIRST,  TWO  THOU-
SAND TEN AND NO LATER THAN MAY FIRST, TWO THOUSAND TEN.
  S  9204. REIMBURSEMENT PREMIUMS. (A) EACH REIMBURSEMENT CONTRACT SHALL
REQUIRE THE INSURER TO ANNUALLY PAY TO THE FUND AN ACTUARIALLY INDICATED
PREMIUM FOR THE REIMBURSEMENT PROMISED.
  (B) THE AUTHORITY, IN  CONSULTATION  WITH  THE  SUPERINTENDENT,  SHALL
SELECT  AN  INDEPENDENT CONSULTANT TO DEVELOP A FORMULA TO DETERMINE THE
ACTUARIALLY INDICATED PREMIUM TO BE PAID TO THE FUND.  THE FORMULA SHALL
SPECIFY, FOR EACH ZIP CODE  OR  OTHER  LIMITED  GEOGRAPHICAL  AREA,  THE
AMOUNT TO BE PAID BY AN INSURER FOR EACH ONE THOUSAND DOLLARS OF INSURED
VALUE  UNDER  COVERED POLICIES IN THAT ZIP CODE OR OTHER AREA. IN ESTAB-
LISHING PREMIUMS, THE AUTHORITY, IN CONSULTATION  WITH  THE  SUPERINTEN-
DENT,  SHALL CONSIDER THE COVERAGE LEVEL ELECTED UNDER SUBSECTION (B) OF
SECTION NINE THOUSAND TWO HUNDRED THREE OF THIS ARTICLE AND ANY  FACTORS
THAT  TEND TO ENHANCE THE ACTUARIAL SOPHISTICATION OF RATEMAKING FOR THE
FUND, INCLUDING DEDUCTIBLES, TYPE  OF  CONSTRUCTION,  TYPE  OF  COVERAGE
PROVIDED, RELATIVE CONCENTRATION OF RISKS, AND OTHER SUCH FACTORS DEEMED
TO BE APPROPRIATE.  THE FORMULA MAY PROVIDE FOR A PROCEDURE TO DETERMINE
THE PREMIUMS TO BE PAID BY NEW INSURERS THAT BEGIN WRITING COVERED POLI-
CIES  AFTER  THE BEGINNING OF A CONTRACT YEAR, TAKING INTO CONSIDERATION
WHEN THE INSURER STARTS WRITING COVERED POLICIES, THE POTENTIAL EXPOSURE
OF THE INSURER, THE POTENTIAL EXPOSURE OF THE FUND,  THE  ADMINISTRATIVE
COSTS  TO  THE  INSURER  AND  TO  THE FUND, AND ANY OTHER FACTORS DEEMED
APPROPRIATE.  THE AUTHORITY, AFTER CONSULTATION WITH THE  SUPERINTENDENT
MAY,  AT ANY TIME, REVISE THE FORMULA PURSUANT TO THE PROCEDURE PROVIDED
IN THIS SUBSECTION.
  (C) NO LATER THAN AUGUST FIRST OF EACH YEAR, EACH INSURER SHALL NOTIFY
THE AUTHORITY AND THE SUPERINTENDENT OF ITS INSURED VALUES UNDER COVERED
POLICIES BY ZIP CODE OR OTHER LIMITED GEOGRAPHICAL AREA, AS OF MAY THIR-
TIETH OF THAT YEAR. ON THE BASIS OF THESE  REPORTS,  THE  AUTHORITY,  IN
CONSULTATION  WITH  THE  SUPERINTENDENT, SHALL CALCULATE THE PREMIUM DUE
FROM THE INSURER, BASED ON THE FORMULA ADOPTED UNDER SUBSECTION  (B)  OF
THIS SECTION. THE INSURER SHALL PAY THE REQUIRED ANNUAL PREMIUM PURSUANT

S. 643                              9

TO  A  PERIODIC  PAYMENT  PLAN  SPECIFIED IN THE CONTRACT. THE AUTHORITY
SHALL PROVIDE FOR PAYMENT OF REIMBURSEMENT PREMIUM IN PERIODIC  INSTALL-
MENTS  AND  FOR  THE  ADJUSTMENT  OF  PROVISIONAL  PREMIUM  INSTALLMENTS
COLLECTED  PRIOR TO SUBMISSION OF THE EXPOSURE REPORT TO REFLECT DATA IN
THE EXPOSURE REPORT.
  (D) ALL PREMIUMS PAID TO THE FUND UNDER REIMBURSEMENT CONTRACTS  SHALL
BE  TREATED  AS  PREMIUM FOR APPROVED REINSURANCE FOR ALL ACCOUNTING AND
REGULATORY PURPOSES.
  (E) IN ORDER TO PROVIDE START-UP MONEYS FOR THE ADMINISTRATION OF  THE
FUND,  EACH  INSURER  SUBJECT  TO  THIS SECTION SHALL PAY TO THE FUND AN
ADVANCE PREMIUM PAYMENT OF ONE THOUSAND DOLLARS NO LATER  THAN  NOVEMBER
THIRTIETH,  TWO  THOUSAND  NINE. THE AUTHORITY SHALL COLLECT THE ADVANCE
PREMIUM PAYMENTS REQUIRED BY THIS SUBSECTION.  THE INSURER SHALL RECEIVE
A CREDIT AGAINST FUTURE PREMIUMS FOR THE ADVANCE PAYMENT.
  S 9205. REVENUE BONDS.  (A) UPON THE OCCURRENCE OF A COVERED EVENT AND
A DETERMINATION THAT THE MONEYS IN THE FUND ARE OR WILL BE  INSUFFICIENT
TO  PAY  REIMBURSEMENT  AT  THE  LEVELS  PROMISED  IN  THE REIMBURSEMENT
CONTRACTS, THE AUTHORITY MAY ENTER INTO AGREEMENTS  WITH  LOCAL  GOVERN-
MENTS  FOR  THE ISSUANCE OF REVENUE BONDS FOR THE BENEFIT OF THE FUND OR
ISSUE REVENUE BONDS IN THE AUTHORITY'S OWN RIGHT. THE TERM OF THE  BONDS
SHALL  NOT  EXCEED  THIRTY  YEARS. THE AUTHORITY SHALL PLEDGE ALL FUTURE
REVENUES UNDER SECTION NINE THOUSAND TWO HUNDRED FOUR  OF  THIS  ARTICLE
AND  UNDER  SUBSECTION  (C) OF THIS SECTION, OR A LESSER PORTION OF SUCH
REVENUES  SUFFICIENT  TO  RAISE  MONEYS  IN  AN  AMOUNT  THAT  WILL  PAY
REIMBURSEMENT  AT THE LEVELS PROMISED IN THE REIMBURSEMENT CONTRACTS, TO
THE RETIREMENT OF SUCH BONDS. THE AUTHORITY MAY  ALSO  ENTER  INTO  SUCH
AGREEMENTS  IN  THE ABSENCE OF A COVERED EVENT UPON A DETERMINATION THAT
SUCH ACTION WOULD MAXIMIZE THE ABILITY OF THE FUND TO MEET FUTURE  OBLI-
GATIONS.
  (B)  ANY  LOCAL  GOVERNMENT MAY ISSUE BONDS PURSUANT TO THE APPLICABLE
PROVISIONS OF THE STATE FINANCE LAW FROM TIME TO TIME TO FUND AN ASSIST-
ANCE PROGRAM, IN CONJUNCTION WITH THE FUND, FOR THE PURPOSE  OF  MEETING
THE REIMBURSEMENT OBLIGATIONS OF THE FUND. THE ISSUANCE OF SUCH BONDS IS
FOR THE PUBLIC PURPOSE OF ENSURING THAT POLICYHOLDERS LOCATED WITHIN THE
LOCAL  GOVERNMENT  ARE  ABLE TO RECOVER UNDER RESIDENTIAL AND COMMERCIAL
PROPERTY/CASUALTY INSURANCE POLICIES  AFTER  A  COVERED  EVENT.  REVENUE
BONDS  SHALL  NOT  BE  ISSUED UNTIL VALIDATED PURSUANT TO THE APPLICABLE
PROVISIONS OF THE STATE FINANCE LAW. THE LOCAL  GOVERNMENT  SHALL  ENTER
INTO  SUCH  CONTRACTS  WITH  THE  FUND AS ARE NECESSARY TO CARRY OUT THE
PROVISIONS OF THIS SECTION.  ANY BONDS ISSUED UNDER THIS  SECTION  SHALL
BE PAYABLE FROM AND SECURED BY MONEYS RECEIVED BY THE FUND UNDER SECTION
NINE THOUSAND TWO HUNDRED FOUR OF THIS ARTICLE, AND ASSIGNED AND PLEDGED
TO  OR  ON BEHALF OF THE LOCAL GOVERNMENT FOR THE BENEFIT OF THE HOLDERS
OF SUCH BONDS.  THE FUNDS, CREDIT, PROPERTY, AND  TAXING  POWER  OF  THE
STATE OR OF THE LOCAL GOVERNMENT SHALL NOT BE PLEDGED FOR THE PAYMENT OF
SUCH BONDS.
  (C)  IF  THE  AUTHORITY,  AFTER  CONSULTATION WITH THE SUPERINTENDENT,
DETERMINES THAT THE AMOUNT OF REVENUE PRODUCED UNDER SUBSECTION  (A)  OF
THIS  SECTION  IS  INSUFFICIENT  TO  FUND  THE  OBLIGATIONS,  COSTS, AND
EXPENSES OF THE FUND, INCLUDING REPAYMENT OF REVENUE BONDS, THE AUTHORI-
TY MAY LEVY AN EMERGENCY ASSESSMENT ON EACH INSURER WRITING PROPERTY AND
CASUALTY BUSINESS IN THIS STATE OR A PORTION OF THIS STATE FOR  RESIDEN-
TIAL  AND  COMMERCIAL PROPERTIES.  PURSUANT TO THE EMERGENCY ASSESSMENT,
EACH SUCH INSURER SHALL PAY TO THE FUND BY JULY FIRST OF  EACH  YEAR  AN
AMOUNT  SET  BY  THE  AUTHORITY  NOT  EXCEEDING TWO PERCENT OF ITS GROSS
DIRECT WRITTEN PREMIUM FOR THE PRIOR YEAR FROM ALL PROPERTY AND CASUALTY

S. 643                             10

BUSINESS IN THIS STATE OR FOR A DESIGNATED REGION OF THIS  STATE  EXCEPT
FOR  WORKERS'  COMPENSATION, EXCEPT THAT, IF THE GOVERNOR HAS DECLARED A
STATE OF EMERGENCY UNDER THIS ARTICLE DUE TO THE OCCURRENCE OF A COVERED
EVENT,  THE  AMOUNT  OF THE ASSESSMENT MAY BE INCREASED TO AN AMOUNT NOT
EXCEEDING FOUR PERCENT OF SUCH  PREMIUM  PER  COVERED  EVENT.  UNDER  NO
CIRCUMSTANCE  SHALL THE AGGREGATE ASSESSMENT FOR MORE THAN THREE COVERED
EVENTS IN ONE  YEAR  BE  MORE  THAN  TEN  PERCENT.    AS  USED  IN  THIS
SUBSECTION, THE TERM "PROPERTY AND CASUALTY BUSINESS" INCLUDES ALL LINES
OF  BUSINESS  IDENTIFIED  ON THE FORM PROVIDED BY THE SUPERINTENDENT, IN
THE ANNUAL STATEMENT REQUIRED BY THIS  ARTICLE  AND  ANY  RULES  ADOPTED
UNDER  THIS ARTICLE.  THE ANNUAL ASSESSMENTS UNDER THIS SUBSECTION SHALL
CONTINUE AS LONG AS THE REVENUE BONDS ISSUED WITH RESPECT TO  WHICH  THE
ASSESSMENT  WAS  IMPOSED  ARE OUTSTANDING, UNLESS ADEQUATE PROVISION HAS
BEEN MADE FOR THE PAYMENT  OF  SUCH  BONDS  PURSUANT  TO  THE  DOCUMENTS
AUTHORIZING  ISSUANCE  OF THE BONDS. AN INSURER SHALL NOT AT ANY TIME BE
SUBJECT TO AGGREGATE ANNUAL ASSESSMENTS UNDER THIS  SUBSECTION  OF  MORE
THAN TWO PERCENT OF PREMIUM, EXCEPT THAT IN THE CASE OF A DECLARED EMER-
GENCY,  AN  INSURER SHALL NOT AT ANY TIME BE SUBJECT TO AGGREGATE ANNUAL
ASSESSMENTS UNDER THIS SUBSECTION OF MORE  THAN  FOUR  PERCENT  FOR  ONE
COVERED  EVENT,  NOR  MORE THAN TEN PERCENT OF PREMIUM FOR THREE OR MORE
COVERED EVENTS THAT OCCUR IN ONE YEAR.  ANY RATE FILING OR PORTION OF  A
RATE  FILING  REFLECTING  A  RATE  CHANGE  ATTRIBUTABLE  ENTIRELY TO THE
ASSESSMENT LEVIED UNDER THIS SUBSECTION SHALL BE  DEEMED  APPROVED  WHEN
MADE,  SUBJECT  TO  THE AUTHORITY OF THE DEPARTMENT TO REQUIRE ACTUARIAL
JUSTIFICATION AS TO THE ADEQUACY OF ANY RATE AT ANY TIME.  IF  THE  RATE
FILING  REFLECTS ONLY A RATE CHANGE ATTRIBUTABLE TO THE ASSESSMENT UNDER
THIS SUBSECTION, THE FILING MAY CONSIST OF A CERTIFICATION SO STATING.
  S 9206. ADDITIONAL POWERS AND DUTIES. (A) THE AUTHORITY, AFTER CONSUL-
TATION  WITH  THE  SUPERINTENDENT  MAY  PROCURE:  (1)  REINSURANCE  FROM
REINSURERS  FOR  THE PURPOSE OF MAXIMIZING THE CAPACITY OF THE FUND, AND
(2) CATASTROPHE NOTES, BONDS, OPTIONS,  SWAPS,  RISK  FUTURES  OR  OTHER
FINANCIAL INSTRUMENTS TO MAXIMIZE THE CAPACITY OF THE FUND.
  (B)  IN  ADDITION  TO  BORROWING UNDER THIS ARTICLE, THE AUTHORITY MAY
ALSO BORROW FROM, OR ENTER INTO OTHER FINANCING ARRANGEMENTS  WITH,  ANY
MARKET SOURCES AT PREVAILING INTEREST RATES.
  (C)  THE  AUTHORITY, AFTER CONSULTATION WITH THE SUPERINTENDENT, SHALL
DEVELOP NEW FINANCING MECHANISMS OR INSTRUMENTS TO MAXIMIZE THE CAPACITY
OF THE FUND. SUCH  MECHANISMS  OR  INSTRUMENTS  SHOULD  ATTRACT  PRIVATE
INVESTMENT  FROM INSURERS AND REINSURERS THAT WISH TO FULLY OR PARTIALLY
SHELTER THEIR CAPITAL FROM INCOME TAXATION AND INCREASE THE  ABILITY  OF
INSURERS,  BANKS,  REINSURERS  AND OTHER FINANCIAL INSTITUTIONS TO PLACE
CAPITAL WITH THE FUND AND RECEIVE COMMENSURATE FEDERAL AND STATE  INCOME
AND FRANCHISE TAX DEDUCTIONS, CREDITS OR DEFERRALS FOR ITS CONTRIBUTORS.
  (D)  IN EACH FISCAL YEAR AFTER APRIL FIRST, TWO THOUSAND THIRTEEN, THE
AUTHORITY SHALL APPROPRIATE FROM THE INVESTMENT INCOME OF THE  FUND  THE
SUM  OF  TEN  MILLION  DOLLARS  FOR THE PURPOSE OF PROVIDING FUNDING FOR
STATE AGENCIES, LOCAL GOVERNMENTS, OTHER MUNICIPAL CORPORATIONS,  PUBLIC
AND  PRIVATE  EDUCATIONAL  INSTITUTIONS,  AND NONPROFIT ORGANIZATIONS TO
SUPPORT PROGRAMS INTENDED  TO  IMPROVE  NATURAL  DISASTER  PREPAREDNESS,
REDUCE POTENTIAL LOSSES FROM COVERED EVENTS, PROVIDE RESEARCH INTO MEANS
TO  REDUCE  SUCH  LOSSES,  EDUCATE  OR  INFORM THE PUBLIC AS TO MEANS TO
REDUCE LOSSES FROM COVERED EVENTS, ASSIST THE PUBLIC IN DETERMINING  THE
APPROPRIATENESS OF PARTICULAR UPGRADES TO STRUCTURES OR IN THE FINANCING
OF  SUCH  UPGRADES, INCREASE COMMUNICATIONS CAPABILITIES AMONG LOCAL LAW
ENFORCEMENT, STATE MILITIA, THE ARMED FORCES OF THE UNITED STATES, FIRST
RESPONDERS, INSURANCE CARRIERS AND ADJUSTERS AND COMMON CARRIERS SO THAT

S. 643                             11

SUCH INDIVIDUALS CAN EASILY COMMUNICATE  WITHIN  EACH  ORGANIZATION  AND
WITH  OTHER  ORGANIZATIONS  DURING  AND  IMMEDIATELY FOLLOWING A COVERED
EVENT, OR PROTECT LOCAL INFRASTRUCTURE  FROM  POTENTIAL  DAMAGE  FROM  A
COVERED EVENT.  IN ADDITION, SUCH MONIES MAY BE USED TO INCREASE PARTIC-
IPATING  INSURER  ABILITY TO SHARE AND RAPIDLY SHIFT CLAIMS ADJUSTERS TO
NATURAL DISASTER RAVAGED AREAS SO THAT ACCURATE CLAIMS LOSS  INFORMATION
CAN BE GATHERED AND INDIVIDUAL LOSS CLAIMS PROCESSED AND PAID AS SOON AS
PRACTICABLE.    MONEYS  SHALL FIRST BE AVAILABLE FOR APPROPRIATION UNDER
THIS SUBSECTION IN FISCAL YEAR TWO THOUSAND THIRTEEN.  THE MONEYS SPECI-
FIED IN THIS SUBSECTION SHALL NOT BE AVAILABLE FOR  APPROPRIATION  UNDER
THIS  SUBSECTION IF THE AUTHORITY FINDS THAT AN APPROPRIATION OF INVEST-
MENT INCOME FROM THE FUND WOULD JEOPARDIZE THE  ACTUARIAL  SOUNDNESS  OF
THE FUND.
  (E) THE AUTHORITY MAY ALLOW INSURERS TO COMPLY WITH REPORTING REQUIRE-
MENTS  AND  REPORTING  FORMAT  REQUIREMENTS USING ALTERNATIVE METHODS OF
REPORTING IF THE PROPER  ADMINISTRATION  OF  THE  FUND  IS  NOT  THEREBY
IMPAIRED AND IF THE ALTERNATIVE METHODS PRODUCE DATA WHICH IS CONSISTENT
FOR THE PURPOSES OF THIS ARTICLE.
  (F)  IN  ORDER  TO  ASSURE  THE  EQUITABLE  OPERATION OF THE FUND, THE
AUTHORITY MAY IMPOSE A REASONABLE FEE ON AN  INSURER  TO  RECOVER  COSTS
INVOLVED  IN  REPROCESSING  INACCURATE, INCOMPLETE, OR UNTIMELY EXPOSURE
DATA SUBMITTED BY THE INSURER.
  S 9206-A. NOTES AND BONDS OF THE  AUTHORITY.  (A)  (1)  THE  AUTHORITY
SHALL HAVE POWER AND IS HEREBY AUTHORIZED FROM TIME TO TIME TO ISSUE ITS
NEGOTIABLE  BONDS  AND NOTES IN SUCH PRINCIPAL AMOUNT AS, IN THE OPINION
OF THE AUTHORITY, SHALL BE NECESSARY TO  PROVIDE  SUFFICIENT  FUNDS  FOR
ACHIEVING  ITS  PURPOSES, INCLUDING THE PAYMENT OF INTEREST ON BONDS AND
NOTES OF THE AUTHORITY AND THE ESTABLISHMENT OF RESERVES TO SECURE  SUCH
BONDS AND NOTES.
  (2)  THE  AUTHORITY  SHALL  HAVE  POWER,  FROM  TIME TO TIME, TO ISSUE
RENEWAL NOTES, TO ISSUE BONDS TO PAY NOTES AND WHENEVER IT DEEMS REFUND-
ING EXPEDIENT, TO REFUND ANY BONDS BY THE ISSUANCE OF NEW BONDS, WHETHER
THE BONDS TO BE REFUNDED HAVE OR HAVE NOT MATURED, AND  TO  ISSUE  BONDS
PARTLY  TO  REFUND  BONDS  THEN  OUTSTANDING  AND  PARTLY  FOR ANY OTHER
PURPOSE. THE REFUNDING BONDS SHALL BE SOLD AND THE PROCEEDS  APPLIED  TO
THE PURCHASE, REDEMPTION OR PAYMENT OF THE BONDS TO BE REFUNDED.
  (3)  EXCEPT  AS  MAY OTHERWISE BE EXPRESSLY PROVIDED BY THE AUTHORITY,
EVERY ISSUE OF ITS NOTES OR BONDS SHALL BE GENERAL  OBLIGATIONS  OF  THE
AUTHORITY  PAYABLE  OUT  OF  ANY  REVENUES  OR  MONEYS OF THE AUTHORITY,
SUBJECT ONLY TO ANY AGREEMENTS WITH THE HOLDERS OF PARTICULAR  NOTES  OR
BONDS PLEDGING ANY PARTICULAR RECEIPTS OR REVENUES.
  (B)  THE NOTES AND BONDS SHALL BE AUTHORIZED BY RESOLUTION APPROVED BY
NOT LESS THAN A TWO-THIRDS MAJORITY VOTE OF THE WHOLE NUMBER OF  MEMBERS
OF  THE AUTHORITY THEN IN OFFICE, EXCEPT THAT IN THE EVENT OF A TIE VOTE
THE CHAIR SHALL CAST ONE ADDITIONAL VOTE.   THE NOTES  AND  BONDS  SHALL
BEAR  INTEREST  AT  SUCH  RATE OR RATES, BE IN SUCH DENOMINATIONS, BE IN
SUCH FORM, EITHER COUPON OR REGISTERED, CARRY SUCH  REGISTRATION  PRIVI-
LEGES, BE EXECUTED IN SUCH MANNER, BE PAYABLE IN SUCH MEDIUM OF PAYMENT,
AT  SUCH  PLACE  OR PLACES AND BE SUBJECT TO SUCH TERMS OF REDEMPTION AS
SUCH RESOLUTION OR RESOLUTIONS MAY PROVIDE. THE NOTES AND BONDS  OF  THE
AUTHORITY  MAY  BE  SOLD BY THE AUTHORITY, AT PUBLIC OR PRIVATE SALE, AT
SUCH PRICE OR PRICES AS THE AUTHORITY SHALL DETERMINE. NO NOTES OR BONDS
OF THE AUTHORITY SHALL BE SOLD BY THE AUTHORITY AT PRIVATE SALE,  HOWEV-
ER, UNLESS SUCH SALE AND THE TERMS THEREOF HAVE BEEN APPROVED IN WRITING
BY  (1)  THE  COMPTROLLER, WHERE SUCH SALE IS NOT TO THE COMPTROLLER, OR
(2) THE DIRECTOR OF THE BUDGET, WHERE SUCH SALE IS TO THE COMPTROLLER.

S. 643                             12

  (C) ANY RESOLUTION OR RESOLUTIONS AUTHORIZING ANY NOTES  OR  BONDS  OR
ANY  ISSUE  THEREOF MAY CONTAIN PROVISIONS, WHICH SHALL BE A PART OF THE
CONTRACT WITH THE HOLDERS THEREOF, AS TO:
  (1)  PLEDGING  ALL OR ANY PART OF THE PREMIUMS, CHARGES AND OTHER FEES
MADE OR RECEIVED BY THE AUTHORITY, AND OTHER MONEY  RECEIVED  OR  TO  BE
RECEIVED,  TO  SECURE  THE PAYMENT OF THE NOTES OR BONDS OR OF ANY ISSUE
THEREOF, SUBJECT TO SUCH AGREEMENTS WITH BONDHOLDERS OR  NOTEHOLDERS  AS
MAY THEN EXIST;
  (2)  PLEDGING ALL OR ANY PART OF THE ASSETS OF THE AUTHORITY TO SECURE
THE PAYMENT OF THE NOTES OR BONDS OR OF ANY ISSUE  OF  NOTES  OR  BONDS,
SUBJECT  TO  SUCH AGREEMENTS WITH NOTEHOLDERS OR BONDHOLDERS AS MAY THEN
EXIST;
  (3) THE SETTING ASIDE OF RESERVES OR SINKING FUNDS AND THE  REGULATION
AND DISPOSITION THEREOF; AND
  (4)  ANY  OTHER  MATTERS, OF LIKE OR DIFFERENT CHARACTER, WHICH IN ANY
WAY AFFECT THE SECURITY OR PROTECTION OF THE NOTES OR BONDS.
  S 9206-B.  AGREEMENT OF THE STATE. THE STATE DOES HEREBY PLEDGE TO AND
AGREE WITH THE HOLDERS OF ANY NOTES OR BONDS OR LEASE OBLIGATIONS ISSUED
OR INCURRED UNDER THIS ARTICLE, THAT THE STATE WILL NOT LIMIT  OR  ALTER
THE  DENIAL OF AUTHORITY UNDER THIS ARTICLE, OR THE RIGHTS HEREBY VESTED
IN THE AUTHORITY TO FULFILL THE TERMS OF ANY AGREEMENTS  MADE  WITH  THE
HOLDERS  THEREOF,  OR  IN ANY WAY IMPAIR THE RIGHTS AND REMEDIES OF SUCH
HOLDERS UNTIL SUCH NOTES OR BONDS OR LEASE  OBLIGATIONS,  TOGETHER  WITH
THE INTEREST THEREON, WITH INTEREST ON ANY UNPAID INSTALLMENTS OF INTER-
EST,  AND  ALL  COSTS  AND EXPENSES FOR WHICH THE AUTHORITY IS LIABLE IN
CONNECTION WITH ANY ACTION OR PROCEEDING BY OR ON BEHALF OF  SUCH  HOLD-
ERS,  ARE  FULLY  MET  AND  DISCHARGED. THE AUTHORITY SHALL INCLUDE THIS
PLEDGE AND AGREEMENT OF THE STATE IN ANY AGREEMENT WITH THE  HOLDERS  OF
SUCH NOTES OR BONDS OR LEASE OBLIGATIONS.
  S 9206-C.  NOTES AND BONDS AS LEGAL INVESTMENT. THE NOTES AND BONDS OF
THE  AUTHORITY  ARE  HEREBY MADE SECURITIES IN WHICH ALL PUBLIC OFFICERS
AND BODIES OF THE STATE AND ALL MUNICIPALITIES  AND  POLITICAL  SUBDIVI-
SIONS, ALL INSURANCE COMPANIES AND ASSOCIATIONS AND OTHER PERSONS CARRY-
ING  ON  AN  INSURANCE  BUSINESS,  ALL  BANKS, BANKERS, TRUST COMPANIES,
SAVINGS BANKS AND SAVINGS ASSOCIATIONS, INCLUDING SAVINGS AND LOAN ASSO-
CIATIONS, BUILDING AND LOAN ASSOCIATIONS, INVESTMENT COMPANIES AND OTHER
PERSONS CARRYING ON A BANKING BUSINESS, ALL  ADMINISTRATORS,  GUARDIANS,
EXECUTORS, TRUSTEES AND OTHER FIDUCIARIES, AND ALL OTHER PERSONS WHATSO-
EVER  WHO  ARE NOW OR WHO MAY HEREAFTER BE AUTHORIZED TO INVEST IN BONDS
OR OTHER OBLIGATIONS OF THE STATE, MAY PROPERLY AND LEGALLY INVEST FUNDS
INCLUDING CAPITAL IN THEIR CONTROL OR BELONGING TO THEM.   NOTWITHSTAND-
ING  ANY  OTHER  PROVISIONS  OF LAW, THE BONDS OF THE AUTHORITY ARE ALSO
HEREBY MADE SECURITIES WHICH MAY BE DEPOSITED WITH AND SHALL BE RECEIVED
BY ALL PUBLIC OFFICERS AND BODIES OF THIS STATE AND  ALL  MUNICIPALITIES
AND  POLITICAL  SUBDIVISIONS  FOR  ANY  PURPOSE FOR WHICH THE DEPOSIT OF
BONDS OR OTHER OBLIGATIONS OF THE STATE  IS  NOW  OR  MAY  HEREAFTER  BE
AUTHORIZED.
  S 9207. ADVISORY COUNCIL. (A) AN ADVISORY COUNCIL CONSISTING OF TWENTY
MEMBERS  SHALL  BE ESTABLISHED TO PROVIDE THE AUTHORITY WITH INFORMATION
AND ADVICE IN CONNECTION WITH ITS DUTIES.  THE MEMBERS SHALL BE SELECTED
FROM THE FOLLOWING CATEGORIES:  REPRESENTATIVES WITH EXPERTISE IN  ACTU-
ARIAL,  METEOROLOGY,  LAND-USE PLANNING AND ENGINEERING; AND A REPRESEN-
TATIVE OF INSURERS, INSURANCE AGENTS, REINSURERS, LAW ENFORCEMENT, FIRE-
FIGHTERS, THE STATE EMERGENCY MANAGEMENT OFFICE, THE  DIVISION  OF  CODE
ENFORCEMENT  OF THE DEPARTMENT OF STATE, THE SUPERINTENDENT, THE DEPART-
MENT OF TRANSPORTATION, THE DEPARTMENT  OF  TAXATION  AND  FINANCE,  THE

S. 643                             13

DEPARTMENT  OF  AUDIT AND CONTROL AND CONSUMERS WHO SHALL ALSO BE REPRE-
SENTATIVES OF OTHER AFFECTED PROFESSIONS  AND  INDUSTRIES.  TEN  MEMBERS
SHALL  BE  APPOINTED BY THE GOVERNOR, FOUR BY THE TEMPORARY PRESIDENT OF
THE  SENATE,  FOUR  BY  THE SPEAKER OF THE ASSEMBLY, AND ONE EACH BY THE
MINORITY LEADER OF THE SENATE AND THE MINORITY LEADER OF THE ASSEMBLY.
  (B) THE ADVISORY COUNCIL SHALL, IN  COOPERATION  WITH  STATE  AGENCIES
SUCH  AS  THE DEPARTMENT OF STATE, THE DEPARTMENT OF TRANSPORTATION, THE
DEPARTMENT OF HEALTH, THE DEPARTMENT, AND THE STATE EMERGENCY MANAGEMENT
OFFICE, DEVELOP PREVENTION AND MITIGATION STANDARDS TO  MINIMIZE  POTEN-
TIAL  DAMAGE  THAT  MAY  OCCUR  FROM A NATURAL DISASTER BEFORE A COVERED
EVENT AND MINIMIZE ACTUAL DAMAGE THAT MAY OCCUR DURING A  COVERED  EVENT
AND  IMMEDIATELY  AFTER  SUCH  AN  EVENT. SUCH PREVENTION AND MITIGATION
STANDARDS SHALL INCLUDE:
  (1) A REVIEW AND UPDATE OF THE STATE BUILDING AND FIRE PREVENTION CODE
AND MUNICIPAL LAND-USE PLANS  TO  ENSURE  THAT  BUILDING  STANDARDS  AND
MUNICIPAL  ZONING  AND SUBDIVISION REGULATIONS ARE SATISFACTORY TO MITI-
GATE DAMAGE FROM A  CATASTROPHIC  EVENT.  FURTHER,  SUCH  STANDARDS  MAY
CONTEMPLATE  THE  USE OF APPROPRIATE BUILDING MATERIALS AND CONSTRUCTION
METHODS TO MITIGATE POTENTIAL DAMAGE;
  (2) SUGGESTED CHANGES IN PROCEDURES TO ENSURE THAT ALL BUILDING  CODES
AND MUNICIPAL LAND-USE PLANS ARE ENFORCED;
  (3)  SUGGESTIONS TO MINIMIZE THE LOSS OF LIFE VIA EXPEDITED EVACUATION
PROCEDURES FOR  ALL  AFFECTED  RESIDENTS,  PARTICULARLY  THOSE  WHO  ARE
ECONOMICALLY, PHYSICALLY OR MENTALLY  UNABLE TO GET OUT OF HARMS WAY;
  (4) SUGGESTIONS AND PROCEDURES TO ACCELERATE THE RECOVERY AND REBUILD-
ING PROCESS;
  (5) SUGGESTIONS AND PROCEDURES TO ASSIST ADVERSELY AFFECTED BUSINESSES
SO  THAT  SUCH  BUSINESSES  CAN QUICKLY COMMENCE OPERATIONS AND MINIMIZE
SHORT AND LONG TERM JOB LOSSES; AND
  (6) A STUDY OF AND SUGGESTIONS ON THE DEVELOPMENT OF ADDITIONAL  ACTU-
ARIALLY  APPROPRIATE  INSURANCE  PREMIUM  DISCOUNTS  TO  BE  OFFERED  TO
INSUREDS TO ENCOURAGE RESIDENTS, BUSINESSES AND MUNICIPALITIES TO  BUILD
OR RETROFIT THEIR HOMES, BUSINESSES AND MUNICIPAL FACILITIES IN A WAY TO
MINIMIZE DAMAGE.
  THE ADVISORY COUNCIL SHALL REPORT ITS INITIAL FINDINGS TO THE CHAIR OF
THE AUTHORITY, THE GOVERNOR, THE SUPERINTENDENT, THE TEMPORARY PRESIDENT
OF  THE  SENATE, THE SPEAKER OF THE ASSEMBLY, THE MINORITY LEADER OF THE
SENATE AND THE MINORITY LEADER OF THE ASSEMBLY ON OR BEFORE JUNE  FIRST,
TWO THOUSAND TEN, AND SHALL THEREAFTER ISSUE AND SUBMIT REPORTS ANNUALLY
ON OR BEFORE JUNE FIRST.
  S  9208.  VIOLATIONS.  ANY  VIOLATION  OF THIS ARTICLE OR OF THE RULES
ADOPTED UNDER THIS ARTICLE SHALL CONSTITUTE A VIOLATION OF THIS CHAPTER.
  S 9209. INTERNATIONAL, FEDERAL, STATE, REGIONAL OR  MULTISTATE  CATAS-
TROPHE  FUNDS.  THE AUTHORITY, IN THE CONDUCT OF ITS BUSINESS AND OPERA-
TION, SHALL ACTIVELY ATTEMPT TO INTEGRATE AND COORDINATE ITS  ACTIVITIES
AND  OPERATIONS  WITH OTHER EXISTING OR NEWLY ESTABLISHED INTERNATIONAL,
FEDERAL, STATE, REGIONAL OR MULTISTATE CATASTROPHE FUNDS OR PROGRAMS, OR
OTHER REINSURANCE PROGRAMS THAT SERVE PURPOSES THAT ARE SIMILAR  TO  ALL
OR  SOME  OF THE GOALS TO BE CARRIED OUT BY THE FUND ESTABLISHED BY THIS
ARTICLE. THE SUPERINTENDENT SHALL PROMPTLY MAKE RECOMMENDATIONS  TO  THE
AUTHORITY,  THE  GOVERNOR  AND  LEGISLATURE  ON METHODS TO ENCOURAGE THE
INTEGRATION, CONSOLIDATION OR COORDINATION OF ACTIVITIES AND  OPERATIONS
OF THE VARIOUS EXISTING OR NEWLY ESTABLISHED FEDERAL, STATE, REGIONAL OR
MULTISTATE CATASTROPHE FUNDS OR OTHER REINSURANCE PROGRAMS. THE AUTHORI-
TY,  UPON  THE APPROVAL OF THE LEGISLATURE, MAY INTEGRATE, COORDINATE OR
TERMINATE THE FUND AND CONSOLIDATE SUCH FUND WITH OTHER OPERATING CATAS-

S. 643                             14

TROPHE OR REINSURANCE FUNDS OR MERGE, TAKE OVER OR ACQUIRE OTHER ALREADY
OPERATING CATASTROPHE OR REINSURANCE FUNDS TO CREATE A LARGER  AND  MORE
DIVERSE CATASTROPHE FUND.
  THE  AUTHORITY  SHALL  INVESTIGATE THE INTEGRATION AND COORDINATION OF
THE PAYMENT OF PREMIUMS  FOR  THE  COVERAGE  FROM  CATASTROPHIC  COVERED
EVENTS  AND THE TIMELY PAYMENT OF CLAIMS WITH OTHER EXISTING FEDERAL AND
STATE INSURANCE PROGRAMS SUCH AS THE NATIONAL FLOOD  INSURANCE  PROGRAM,
PAYMENTS  TO  BE  MADE  BY  THE FEDERAL EMERGENCY MANAGEMENT AGENCY, AND
STATE SPONSORED FAIR PLANS SUCH  AS  THE  NEW  YORK  PROPERTY  INSURANCE
UNDERWRITING ASSOCIATION, AND STATE SPONSORED INSURANCE GUARANTEE FUNDS.
  S  9210.  FUND ASSETS UPON TERMINATION. THE FUND AND THE DUTIES OF THE
AUTHORITY UNDER THIS ARTICLE MAY BE TERMINATED ONLY  BY  LAW.  UPON  THE
FULL  OR  PARTIAL  TERMINATION  OF  THE  OPERATION OF THE FUND, ALL OR A
PORTION OF SUCH ASSETS OF THE FUND SHALL BE TRANSFERRED TO ANY SUCCESSOR
FEDERAL OR MULTISTATE CATASTROPHE FUND OR THE  PROPERTY/CASUALTY  INSUR-
ANCE SECURITY FUND.
  S 4.  The sum of ten million dollars ($10,000,000), or so much thereof
as may be necessary, is hereby appropriated to the New York state catas-
trophe  fund out of any moneys in the state treasury in the general fund
to the credit of the state purposes account not  otherwise  appropriated
for  its  expenses,  including personal services, maintenance and opera-
tion, in carrying out the provisions of this act.
  S 5. This act shall take effect immediately.

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