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

                                  3968

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            January 31, 2011
                               ___________

Introduced  by M. of A. MORELLE -- read once and referred to the Commit-
  tee on Insurance

AN ACT to amend the insurance  law,  in  relation  to  incorporation  of
  resolution facilities

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

  Section 1. The insurance law is amended by adding a new  section  7719
to read as follows:
  S  7719.    RESOLUTION  FACILITY. (A) THE CORPORATION MAY FROM TIME TO
TIME INCORPORATE ONE OR MORE NOT-FOR-PROFIT CORPORATIONS, EACH KNOWN  AS
A  RESOLUTION  FACILITY, IN CONNECTION WITH THE REHABILITATION OR LIQUI-
DATION OF AN IMPAIRED OR INSOLVENT DOMESTIC LIFE INSURANCE COMPANY UNDER
ARTICLE SEVENTY-FOUR OF THIS CHAPTER, AND FOR THE PURPOSE OF ADMINISTER-
ING AND DISPOSING OF THE BUSINESS OF AN IMPAIRED OR  INSOLVENT  DOMESTIC
LIFE  INSURANCE COMPANY ASSUMED BY OR ASSIGNED TO THE RESOLUTION FACILI-
TY.
  (B) FUNDING FOR A RESOLUTION FACILITY MAY BE PROVIDED BY (I) THE REHA-
BILITATOR OR LIQUIDATOR OF THE IMPAIRED OR INSOLVENT INSURER WHOSE BUSI-
NESS IS ASSUMED BY OR ASSIGNED TO  THE  RESOLUTION  FACILITY,  (II)  THE
CORPORATION,  (III)  THE  LIFE  INSURANCE GUARANTY CORPORATION CONTINUED
UNDER ARTICLE SEVENTY-FIVE OF THIS  CHAPTER,  (IV)  ANY  OTHER  GUARANTY
CORPORATIONS  OR  ASSOCIATIONS OF OTHER JURISDICTIONS HAVING OBLIGATIONS
IN CONNECTION WITH INSURANCE  POLICIES,  ANNUITY  CONTRACTS  OR  FUNDING
AGREEMENTS  OF  THE  IMPAIRED  OR  INSOLVENT  INSURER  WHOSE BUSINESS IS
ASSUMED BY OR ASSIGNED TO THE RESOLUTION  FACILITY,  OR  (V)  ANY  OTHER
PERSON.
  (C)  EACH  RESOLUTION FACILITY SHALL BE A TYPE C NOT-FOR-PROFIT CORPO-
RATION PURSUANT TO THE NOT-FOR-PROFIT CORPORATION  LAW.    A  RESOLUTION
FACILITY  SHALL  HAVE  ONE  OR  MORE CLASSES OF MEMBERS. THE CORPORATION
SHALL BE A MEMBER  OF  EACH  RESOLUTION  FACILITY,  AND  OTHER  PERSONS,
INCLUDING,  WITHOUT  LIMITATION, THE LIFE INSURANCE GUARANTY CORPORATION

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05166-01-1
              

A. 3968                             2

CONTINUED UNDER ARTICLE SEVENTY-FIVE OF THIS CHAPTER AND GUARANTY CORPO-
RATIONS OR ASSOCIATIONS OF OTHER JURISDICTIONS, MAY BECOME MEMBERS OF  A
RESOLUTION FACILITY IN ACCORDANCE WITH THE CERTIFICATE OF INCORPORATION,
BY-LAWS AND PLAN OF OPERATION OF THE RESOLUTION FACILITY.
  (D)  IN  ACCORDANCE  WITH ITS PLAN OF OPERATION, A RESOLUTION FACILITY
MAY (I) GUARANTEE, ASSUME  OR  REINSURE,  OR  CAUSE  TO  BE  GUARANTEED,
ASSUMED  OR  REINSURED,  THE  INSURANCE  POLICIES, FUNDING AGREEMENTS OR
ANNUITY CONTRACTS OF THE IMPAIRED OR INSOLVENT INSURER WHOSE BUSINESS IS
ASSUMED BY OR ASSIGNED TO THE RESOLUTION  FACILITY  (AS  SUCH  INSURANCE
POLICIES, FUNDING AGREEMENTS OR ANNUITY CONTRACTS MAY HAVE BEEN AMENDED,
MODIFIED  OR  RESTRUCTURED  WITH  THE  APPROVAL  OF A COURT OF COMPETENT
JURISDICTION), OR ARRANGE FOR REPLACEMENT BY INSURANCE POLICIES, FUNDING
AGREEMENTS OR ANNUITY CONTRACTS FOUND BY THE REHABILITATOR OR LIQUIDATOR
OF SUCH IMPAIRED OR INSOLVENT INSURER TO  BE  SUBSTANTIALLY  SIMILAR  TO
SUCH INSURANCE POLICIES, FUNDING AGREEMENTS OR ANNUITY CONTRACTS OF SUCH
IMPAIRED  OR  INSOLVENT  INSURER  OR  REPLACEMENT BY INSURANCE POLICIES,
FUNDING AGREEMENTS OR ANNUITY CONTRACTS APPROVED BY A COURT OF COMPETENT
JURISDICTION, AND (II) OTHERWISE EXERCISE THE POWERS OF A DOMESTIC  LIFE
INSURANCE COMPANY, BUT IN NO CASE MAY A RESOLUTION FACILITY ISSUE INSUR-
ANCE  POLICIES, FUNDING AGREEMENTS OR ANNUITY CONTRACTS OTHER THAN THOSE
ISSUED IN RESPECT OF THE CONTRACTUAL  OBLIGATIONS  OF  THE  IMPAIRED  OR
INSOLVENT INSURER.
  (E)  SECTION  SEVEN THOUSAND SEVEN HUNDRED FIFTEEN OF THIS ARTICLE AND
THE FIRST TWO SENTENCES OF SECTION SEVEN THOUSAND SEVEN HUNDRED  SIXTEEN
OF THIS ARTICLE SHALL APPLY TO EACH RESOLUTION FACILITY AS THEY APPLY TO
THE  CORPORATION;  NO OTHER PROVISIONS OF THIS CHAPTER, OTHER THAN THOSE
CONTAINED IN THIS SECTION, SHALL APPLY TO A RESOLUTION FACILITY.
  (F) IN ADDITION TO ITS CERTIFICATE OF INCORPORATION AND BY-LAWS,  EACH
RESOLUTION  FACILITY  SHALL ADOPT A PLAN OF OPERATION NECESSARY OR SUIT-
ABLE TO ASSURE THE FAIR, REASONABLE AND EQUITABLE ADMINISTRATION OF SUCH
RESOLUTION FACILITY'S BUSINESS. THE PLAN OF OPERATION SHALL BE SUBMITTED
TO THE REHABILITATOR OR LIQUIDATOR OF THE IMPAIRED OR INSOLVENT  INSURER
WHOSE BUSINESS IS TO BE ASSUMED BY OR ASSIGNED TO THE RESOLUTION FACILI-
TY  AND SHALL BE EFFECTIVE UPON THE WRITTEN APPROVAL OF SUCH REHABILITA-
TOR OR LIQUIDATOR.
  (G) THE PLAN OF OPERATION SHALL SET FORTH (I) THE OVERSIGHT  AUTHORITY
FOR  THE  RESOLUTION  FACILITY,  AND  (II)  PROCEDURES FOR AMENDMENTS OR
MODIFICATIONS TO THE PLAN OF OPERATION.
  S 2. This act shall take effect immediately.