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

                                  1007

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced by M. of A. WEPRIN -- read once and referred to the Committee
  on Insurance

AN  ACT  to  amend  the  insurance  law,  in relation to an exemption to
  certain  provisions  of  law  relating  to  risk-based   capital   for
  property/casualty  insurance  companies; and in relation to the finan-
  cial regulation of medical malpractice liability insurance  companies;
  and to repeal certain provisions of such law relating thereto

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

  Section 1. Subsection (a) of section 1301  of  the  insurance  law  is
amended by adding two new paragraphs 19 and 20 to read as follows:
  (19) FOR THOSE STOCK AND NON-STOCK COMPANIES TO WHICH SUBPARAGRAPH (B)
OF PARAGRAPH TWO OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED
TWENTY-FOUR OF THIS ARTICLE APPLY, THE AMOUNT OF THE SURCHARGE ON PREMI-
UMS TO SATISFY A PROJECTED DEFICIENCY THAT IS ATTRIBUTABLE TO THE PREMI-
UM  LEVELS  ESTABLISHED PURSUANT TO SECTION FORTY OF CHAPTER TWO HUNDRED
SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED EIGHTY-SIX, AS SUCH  SURCHARGE
IS  PROVIDED  IN SUCH CHAPTER, WHETHER OR NOT SUCH SURCHARGE IS ACTUALLY
IMPOSED BY THE SUPERINTENDENT; PROVIDED, HOWEVER, THAT SUCH  SURCHARGES,
IF  IMPOSED,  WILL  BE  SUBJECT  TO THE LIMITATIONS PROVIDED FOR IN THIS
CHAPTER RELATING TO THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.
  (20) FOR RECIPROCAL INSURERS ORGANIZED AND LICENSED PURSUANT TO  ARTI-
CLE  SIXTY-ONE OF THIS CHAPTER TO WRITE MEDICAL MALPRACTICE INSURANCE AS
THAT TERM IS DEFINED IN SUBSECTION (B) OF  SECTION  FIVE  THOUSAND  FIVE
HUNDRED  ONE OF THIS CHAPTER, THE AMOUNT OF ANY ASSESSMENT AUTHORIZED BY
SUBSECTIONS (A) AND (B) OF SECTION SIX THOUSAND  ONE  HUNDRED  EIGHT  OF
THIS CHAPTER; PROVIDED, HOWEVER, THAT SUCH ASSESSMENTS, IF IMPOSED, WILL
BE  SUBJECT  TO THE LIMITATIONS PROVIDED FOR IN THIS CHAPTER RELATING TO
THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03816-02-3
              

A. 1007                             2

  S 2. Section 1311 of the insurance law is  amended  by  adding  a  new
subsection (e) to read as follows:
  (E)  IN DETERMINING THE TOTAL ADMITTED ASSETS OF AN INSURER THE SUPER-
INTENDENT SHALL INCLUDE IN SUCH  DETERMINATION  ALL  ASSETS  ALLOWED  AS
ADMITTED ASSETS PURSUANT TO SUBSECTION (A) OF SECTION ONE THOUSAND THREE
HUNDRED ONE OF THIS ARTICLE.
  S  3.  Section 1325 of the insurance law is REPEALED and a new section
1325 is added to read as follows:
  S 1325. EXEMPTION. (A) FOR THE PURPOSES OF EXEMPTING CERTAIN INSURANCE
COMPANIES FROM THE PROVISIONS OF  SECTION  ONE  THOUSAND  THREE  HUNDRED
TWENTY-FOUR OF THIS ARTICLE, THE SUPERINTENDENT SHALL EXEMPT THOSE STOCK
AND NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH
TWO OF SUBSECTION (B) OF SUCH SECTION APPLIES.
  (B)  THE  SUPERINTENDENT SHALL NO LATER THAN JUNE THIRTIETH, TWO THOU-
SAND FIFTEEN PROMULGATE, FOR  APPLICATION  DURING  THE  NEXT  SUCCEEDING
CALENDAR  YEAR,  AND AFTER  CONSULTATION WITH THE COMMISSIONER OF HEALTH
AND DOMESTIC MEDICAL MALPRACTICE INSURERS  WRITING  MEDICAL  MALPRACTICE
INSURANCE  IN  THIS STATE, A REGULATION WHICH PROVIDES A SEPARATE FINAN-
CIAL SECURITY STANDARD AND RATE APPROVAL PROCESS  FOR  THOSE  STOCK  AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF  SUBSECTION  (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF
THIS ARTICLE APPLY. SUCH STANDARD SHALL BE  SUFFICIENTLY  DISTINCT  FROM
THAT  PROVIDED  FOR IN THIS CHAPTER OR RELATED REGULATION OR UTILIZED BY
THE SUPERINTENDENT IN THE EXAMINATION OF PROPERTY AND CASUALTY  CARRIERS
SO  AS  TO  REFLECT  THE  UNIQUE MARKET, FINANCIAL AND LEGAL OBLIGATIONS
IMPOSED UPON MEDICAL MALPRACTICE INSURANCE CARRIERS. FURTHER, THE  REGU-
LATION  SHALL INCLUDE NEW STATUTORY FINANCIAL STATEMENT BLANKS AND EXAM-
INATION PROTOCOLS CONSISTENT WITH THE NEW STANDARD.
  (C) UNTIL SUCH TIME AS THE SUPERINTENDENT PROMULGATES  REGULATIONS  IN
ACCORDANCE  WITH  SUBSECTION  (B)  OF  THIS  SECTION,  THOSE  STOCK  AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED  TWENTY-FOUR  OF
THIS  ARTICLE APPLIED, AND NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO
THE CONTRARY, A CARRIER MAY FILE FOR AND USE  A  RATE  INCREASE  NOT  TO
EXCEED FIVE PERCENT OF THE CARRIER'S CURRENT RATE UPON A FILING WITH THE
SUPERINTENDENT FOR THE NEXT SUCCEEDING POLICY YEAR IF SUCH SUBMISSION IS
FILED  WITH  THE SUPERINTENDENT NO LATER THAN JULY FIFTEENTH OF THE YEAR
PRIOR TO WHICH IT IS TO BE APPLIED.   IF A CARRIER DOES  NOT  FILE  SUCH
RATE  ADJUSTMENT  WITHIN  SUCH  TIME  FRAME,  THEN SUCH INSURER SHALL BE
SUBJECT TO THE RATE APPROVAL PROCESS IN PLACE AT THE TIME  THIS  SECTION
SHALL TAKE EFFECT.
  S 4. The insurance law is amended by adding a new section 1326 to read
as follows:
  S  1326.  STATUTORY  ASSOCIATION  MEMBERSHIP.    FOR  THOSE  STOCK AND
NON-STOCK COMPANIES TO  WHICH  SUBPARAGRAPH  (B)  OF  PARAGRAPH  TWO  OF
SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF THIS
ARTICLE  APPLY, NO LIABILITIES ARISING FROM ANY MEMBERSHIP IN ANY STATU-
TORY ASSOCIATION SHALL BE DUE AND OWING FROM SUCH COMPANIES  UNLESS  AND
UNTIL  SUCH LIABILITIES CAN ONLY BE SATISFIED BY A CONTRIBUTION FROM THE
INSURER, AND THE INSURER IS NOTIFIED OF SAME  NOT  LESS  THAN  ONE  YEAR
PRIOR  TO  THE EXPECTED DATE THAT SUCH OBLIGATION WILL BE DUE AND OWING.
SUCH LIABILITIES SHALL NOT BE AGGREGATED AND SHALL NOT  INCLUDE  CONTIN-
GENT  LIABILITIES,  BUT REFLECT SPECIFIC CLAIMS LIABILITIES ACTUALLY DUE
AND OWING OR EXPECTED TO BE DUE AND OWING IN THAT YEAR FOR  WHICH  THERE
ARE  NO  OTHER  ASSOCIATION OR POOL RESOURCES, INCLUDING CURRENT PREMIUM
INCOME, TO SATISFY SUCH OBLIGATIONS; FURTHER, COMPANIES, UPON RECEIPT OF

A. 1007                             3

NOTICE OF SUCH OBLIGATION, SHALL HAVE THE RIGHT TO AUDIT ANY SUCH  ASSO-
CIATION AND ITS REQUEST FOR COVERAGE OF SUCH LIABILITIES.
  S  5.  Subsection (c) of section 2343 of the insurance law, as amended
by chapter 489 of the laws of 2012, is amended to read as follows:
  (c) Notwithstanding any other provision of this chapter,  no  applica-
tion for an order of rehabilitation or liquidation of a domestic insurer
whose  primary liability arises from the business of medical malpractice
insurance, as that term is defined in subsection  (b)  of  section  five
thousand  five hundred one of this chapter, shall be made on the grounds
specified in subsection (a)  or  (c)  of  section  seven  thousand  four
hundred two of this chapter at any time [prior to December thirty-first,
two thousand sixteen].
  S 6. Subsection (b) of section 6108 of the insurance law is amended to
read as follows:
  (b)  If the admitted assets of any such insurer are at any time insuf-
ficient for the payment of losses and expenses after providing  for  all
other liabilities of such insurer and the minimum surplus to policyhold-
ers required by this chapter, the advisory committee shall, within thir-
ty  days thereafter, order an assessment for the amount necessary to pay
such losses and expenses, and authorize the attorney-in-fact to  collect
from  each  subscriber liable therefor a pro rata share of the amount of
such assessment, subject to the limit specified in the contract of  such
subscriber  and to maintain an action therefor in the name of the attor-
ney-in-fact. FOR THE PURPOSES OF THIS SUBSECTION, ADMITTED ASSETS  SHALL
INCLUDE A PRESUMPTION OF A SURCHARGE OR ASSESSMENT, WHERE APPLICABLE, OR
BOTH,  HAVING BEEN AUTHORIZED BY THE ADVISORY COUNCIL OR DIRECTED BY THE
SUPERINTENDENT CONSISTENT WITH THE TERMS OF THE  SUBSCRIBERS'  CONTRACTS
AND COLLECTED BY AN INSURER.
  S 7. Subsection (c) of section 6111 of the insurance law is amended to
read as follows:
  (c) The contingent liability of subscribers for additional premiums or
assessments  shall [not] be included as an asset in the financial state-
ment of a reciprocal insurer.
  S 8. This act shall take effect immediately.