NY State Senate Bill 2009-S4768

Senate Bill S4768

Signed By Governor

2009-2010 Legislative Session

Enacts the fraternal benefit society risk based capital act of 2009; establishing risk-based capital requirements applicable to fraternal benefit societies; repealer

download bill text pdf

Archive: Last Bill Status - Signed by Governor

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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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 28, 2009	signed chap.289
Jul 17, 2009	delivered to governor
Jun 16, 2009	returned to senate passed assembly ordered to third reading rules cal.355 substituted for a8463
May 26, 2009	referred to insurance delivered to assembly passed senate
May 13, 2009	advanced to third reading
May 12, 2009	2nd report cal.
May 11, 2009	1st report cal.289
Apr 27, 2009	referred to insurance

Votes

- May 26, 2009 - Floor Vote
  S4768
  
  61
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  1
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: May 26, 2009
      
      aye (61)
      
      Adams
      
      Addabbo Jr.
      
      Alesi
      
      Aubertine
      
      Bonacic
      
      Breslin
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Espada
      
      Farley
      
      Flanagan
      
      Foley
      
      Fuschillo
      
      Golden
      
      Hannon
      
      Hassell-Thompson
      
      Huntley
      
      Johnson
      
      Johnson
      
      Klein
      
      Krueger
      
      Kruger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Leibell
      
      Libous
      
      Little
      
      Marcellino
      
      Maziarz
      
      McDonald
      
      Monserrate
      
      Montgomery
      
      Morahan
      
      Nozzolio
      
      Onorato
      
      Oppenheimer
      
      Padavan
      
      Parker
      
      Perkins
      
      Ranzenhofer
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Schneiderman
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stachowski
      
      Stavisky
      
      Stewart-Cousins
      
      Thompson
      
      Valesky
      
      Volker
      
      Winner
      
      Young
      
      excused (1)
      
      Griffo

co-Sponsors

2009-S4768 (ACTIVE) - Details

See Assembly Version of this Bill:: A8463
Law Section:: Insurance Law
Laws Affected:: Amd §§4525 & 4527, rpld §4530 sub§ (b) ¶2, Ins L

2009-S4768 (ACTIVE) - Summary

Enacts the fraternal benefit society risk based capital act of 2009; establishing risk-based capital requirements applicable to fraternal benefit societies.

2009-S4768 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4768

 TITLE OF BILL :

An act to amend the insurance law, in relation to establishing
risk-based capital requirements applicable to fraternal benefit
societies and to repeal paragraph 2 of subsection (b) of section 4530
of such laws relating thereto


 PURPOSE OR GENERAL IDEA OF BILL :

This bill would amend the law to make all authorized fraternal benefit
societies subject to the risk-based capital ("RBC") requirements of
Insurance Law §1322. Currently, a fraternal benefit society must file
an RBC report only if it provides the benefits set forth in Insurance
Law §4527, or makes optional investments set forth in Insurance Law
§4530. Only four fraternal benefit societies are currently subject to
the RBC requirements set forth in Insurance Law §1322.

 SUMMARY OF PROVISIONS :

Section 1 of the bill would enact the "fraternal benefit risk-based
capital act of 2009".

Section 2 would amend subsection (c) of Insurance Law §4525 to make

the RBC reporting requirements in Insurance Law § 1322 applicable to
all authorized fraternal benefit societies.

Section 3 would amend subsection (b) of Insurance Law §4527 to delete
the current RBC requirement language for authorized fraternal benefit
societies that obligate these societies to provide the benefits set
forth in that statute.

Section 4 would amend paragraph (2) of subsection (b) of Insurance Law
§4530 to delete the current RBC requirement language for authorized
fraternal benefit societies with optimal additional investment
authority.

 JUSTIFICATION :

RBC is an important tool for evaluating whether an insurer's (or
fraternal benefit society's) capital is sufficient to support its
insurance business and operations. The RBC calculation takes into
account the entity's size and the types of operational risks that it
faces, including underwriting risk, credit risk and investment risk.
RBC reports are used by state insurance departments to evaluate the
financial condition of reporting entities and to respond to signs of
weakness or deterioration by instituting regulatory requirements and
corrective actions to address the specific problem.

At present, all accident and health insurers and life insurers
licensed to do business in New York State - and those fraternal
benefit societies that offer insurance products and have qualified for
expanded or additional authority under Article 45 of the Insurance Law
- are required to file RBC reports with the State Department of
Insurance. In turn, depending upon the level of risk-based capital
held by these companies, the Insurance Department may require them to
file a remedial plan or otherwise be subject to regulatory controls
over their activities to ensure their customers' policies are not at
risk.

However, many fraternal benefit societies are not subject to the RBC
filing requirement. The bill would amend the law to make all
authorized fraternal benefit societies subject to the risk-based
capital requirements of Insurance Law § 1322. This would facilitate
the Insurance Department's ability to assess their capitalization
levels as related to their insurance operations and to require
implementation of remedial actions, if appropriate. As is the case for
societies that are currently subject to the RBC reporting requirements
pursuant to Insurance Law §§ 4527 and 4530, filings would be made
using a form approved by the Superintendent, which may include the
form and instructions developed and approved by the National
Association of Insurance Commissioners specifically for fraternal
benefit societies.

 PRIOR LEGISLATIVE HISTORY :

None.

 FISCAL IMPLICATIONS :

There are no known costs to the State associated with this bill.

 EFFECTIVE DATE :
This act shall take effect immediately.

2009-S4768 (ACTIVE) - Bill Text download pdf

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

                                  4768

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 27, 2009
                               ___________

Introduced  by  Sen. BRESLIN -- 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  establishing  risk-
  based  capital  requirements applicable to fraternal benefit societies
  and to repeal paragraph 2 of subsection (b) of section  4530  of  such
  laws relating thereto

  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 "fraternal benefit society risk-based capital act of 2009".
  S  2.  Subsection (c) of section 4525 of the insurance law, as amended
by chapter 22 of the laws of 2008, is amended to read as follows:
  (c) section one thousand one hundred one, subsections (a) and  (g)  of
section  one thousand one hundred two, sections one thousand one hundred
three, one thousand one hundred five, one thousand one hundred six,  one
thousand  one hundred eight, one thousand one hundred twelve, paragraphs
one, two and three of subsection (a) of section one thousand one hundred
thirteen, sections one thousand  two  hundred  five,  one  thousand  two
hundred  twelve [and], one thousand two hundred seventeen, AND ONE THOU-
SAND THREE HUNDRED TWENTY-TWO, subsections (a),  (b),  (d)  and  (e)  of
section  two  thousand  one  hundred  one, subsection (a) of section two
thousand one hundred two, subsection (a) and subsections (c) through (m)
of section two thousand one hundred three, subsections (a)  through  (e)
of  section  two thousand one hundred nine, subsections (a), (b) and (d)
through (f) of section two thousand one hundred ten, sections two  thou-
sand one hundred twelve, two thousand one hundred fourteen and two thou-
sand  one hundred sixteen, subsections (a), (b), (c) and (e) through (h)
of section two thousand one hundred seventeen, subsections (a)  and  (c)
of  section  two  thousand one hundred twenty, sections two thousand one
hundred twenty-two, two thousand one hundred twenty-three, and two thou-
sand one hundred twenty-four, subsection (b)  of  section  two  thousand

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11434-01-9

S. 4768                             2

three  hundred  seven,  sections three thousand one hundred three, three
thousand one hundred five, three thousand one hundred six,  three  thou-
sand one hundred ten, three thousand two hundred one, three thousand two
hundred two, three thousand two hundred five, three thousand two hundred
seven,  three  thousand  two  hundred  nine  through  three thousand two
hundred twelve, three thousand two hundred fourteen, four  thousand  two
hundred  thirteen,  four  thousand two hundred twenty-six, four thousand
two hundred forty-one, seven thousand three hundred one, seven  thousand
three hundred three and seven thousand three hundred four; and
  S  3. Subsection (b) of section 4527 of the insurance law, as added by
chapter 446 of the laws of 1996, is amended to read as follows:
  (b) In addition to other requirements of this article,  an  authorized
fraternal  benefit society obligating itself for the payment of benefits
described in this section shall [meet the following requirements:
  (1) The society shall be subject to  the  provisions  of  section  one
thousand  three  hundred  twenty-two  of this chapter establishing risk-
based capital (RBC) requirements for life  insurance  and  accident  and
health  insurance  companies,  provided the superintendent shall by rule
establish a separate set of RBC instructions and a separate RBC  formula
for fraternal benefit societies that adjusts the instructions and formu-
la otherwise determined under paragraph two of subsection (c) of section
one  thousand  three  hundred twenty-two of this chapter for the special
structural and organizational characteristics  of  a  fraternal  benefit
society.
  (2)  Notwithstanding],  NOTWITHSTANDING  section  four  thousand  five
hundred twenty-five of this article or subsection  (g)  of  section  two
thousand  one  hundred  three and subsection (b) of section two thousand
one hundred thirty-two of this chapter, [the society shall] only  retain
as  agents persons who are licensed pursuant to section two thousand one
hundred three of this chapter and who:
  [(A)] (1) take the personal written examination required by subsection
(f) of section two thousand one hundred three of this chapter if seeking
the original issuance of  a  license  under  section  two  thousand  one
hundred  three  of  this  chapter  on  or  after January first, nineteen
hundred ninety-seven; and
  [(B)] (2) comply with the  provisions  of  section  two  thousand  one
hundred thirty-two of this chapter regarding agents continuing education
for  the  biennial licensing period beginning on or after January first,
nineteen hundred ninety-eight.
  S 4. Paragraph 2 of subsection (b) of section 4530  of  the  insurance
law  is  REPEALED and paragraphs 3 and 4 are renumbered paragraphs 2 and
3.
  S 5. This act shall take effect immediately.

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Senate Bill S4768

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Sponsored By

Neil D. Breslin