senate Bill S6507A

Signed By Governor
2011-2012 Legislative Session

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

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Archive: Last Bill Status - Signed by Governor


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

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Actions

view actions (15)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jul 18, 2012 signed chap.217
Jul 06, 2012 delivered to governor
May 21, 2012 returned to senate
passed assembly
ordered to third reading cal.600
substituted for a9607
Mar 30, 2012 referred to insurance
Mar 29, 2012 delivered to assembly
passed senate
ordered to third reading cal.479
reported and committed to rules
Mar 16, 2012 print number 6507a
amend (t) and recommit to finance
Mar 05, 2012 reported and committed to finance
Feb 17, 2012 referred to insurance

Votes

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Mar 29, 2012 - Rules committee Vote

S6507A
22
1
committee
22
Aye
1
Nay
2
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show Rules committee vote details

Mar 29, 2012 - Finance committee Vote

S6507A
30
2
committee
30
Aye
2
Nay
2
Aye with Reservations
0
Absent
1
Excused
0
Abstained
show Finance committee vote details

Mar 5, 2012 - Insurance committee Vote

S6507
16
0
committee
16
Aye
0
Nay
2
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show committee vote details

Bill Amendments

Original
A (Active)
Original
A (Active)

S6507 - Bill Details

See Assembly Version of this Bill:
A9607
Law Section:
Insurance Law
Laws Affected:
Amd §7709, Ins L; amd §1511, Tax L

S6507 - Bill Texts

view 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.

view 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.

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                    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

Co-Sponsors

S6507A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A9607
Law Section:
Insurance Law
Laws Affected:
Amd §7709, Ins L; amd §1511, Tax L

S6507A (ACTIVE) - Bill Texts

view 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.

view sponsor memo
BILL NUMBER:S6507A

TITLE OF BILL:
An act to amend the insurance law and the tax 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 $558
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 $558 million.

This bill further makes a technical amendment to paragraph 1 of
subdivision (f) of section 1511 of the tax law.

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 $58 million, thus making the new limit $558
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 full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 6507--A

                            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  --  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 and the tax 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 million dollars, EXCEPT THAT WITH  RESPECT
TO  A  MEMBER  INSURER  THAT  IS A DOMESTIC INSURER AND IS SUBJECT TO AN
ORDER OF REHABILITATION UNDER ARTICLE SEVENTY-FOUR OF THIS CHAPTER AS OF
MARCH FIRST TWO THOUSAND TWELVE, SUCH ASSESSMENT  LIMIT  SHALL  BE  FIVE
HUNDRED  FIFTY-EIGHT  MILLION DOLLARS; PROVIDED, HOWEVER, THAT SUCH FIVE
HUNDRED FIFTY-EIGHT MILLION DOLLAR LIMIT SHALL BE SUBJECT  TO  REDUCTION
IN  AN  AMOUNT,  IF ANY, DETERMINED BY THE SUPERINTENDENT, ON A DATE NOT
EARLIER THAN TWELVE MONTHS AFTER THE ENTRY OF AN  ORDER  OF  LIQUIDATION
WITH  RESPECT  TO SUCH DOMESTIC INSURER, TO BE NOT NEEDED FOR THE CORPO-
RATION TO BE ABLE TO PAY ITS  OBLIGATIONS  AND  REASONABLE  EXPENSES  IN
CONNECTION  WITH  THE  LIQUIDATION  OF  SUCH DOMESTIC INSURER, BUT IN NO
EVENT SHALL SUCH REDUCTION EXCEED FIFTY-EIGHT MILLION DOLLARS.
  S 2. Paragraph 1 of subdivision (f) of section 1511 of the tax law, as
amended by chapter 803 of the laws  of  1985,  is  amended  to  read  as
follows:
  (1)  The  maximum  authorized credit for each taxpayer shall be deter-
mined as provided in [subsection (a) of] section  seven  thousand  seven
hundred twelve of the insurance law.
  S 3. This act shall take effect immediately.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14723-03-2

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