S T A T E   O F   N E W   Y O R K
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                                 9337--A
                                                        Cal. No. 816

                          I N  A S S E M B L Y

                            February 23, 2016
                               ___________

Introduced  by M. of A. McDONALD, STECK, RAIA, FAHY, BRABENEC, PALMESANO
  -- Multi-Sponsored by -- M. of A.  CROUCH,  LOPEZ  --  read  once  and
  referred  to  the  Committee  on  Insurance  -- passed by Assembly and
  delivered to the Senate, recalled from the Senate, vote  reconsidered,
  bill  amended,  ordered reprinted, retaining its place on the order of
  third reading

AN ACT to amend the insurance law, in relation to authorizing the super-
  intendent of financial services to suspend crediting  of  underwriting
  earnings for a fiscal year for the purpose of accumulating a subscrib-
  er's operating reserve

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

  Section 1. Section 6109  of  the  insurance  law,  subsection  (a)  as
amended  by  chapter  138  of  the  laws  of 1987, is amended to read as
follows:
  S 6109. Subscriber's operating reserve. (a) (1) Every subscriber of an
authorized reciprocal  insurer  in  which  subscribers  are  subject  to
contingent liability shall accumulate a minimum operating reserve, to be
credited  to such subscriber on the books and records of such reciprocal
insurer, by authorizing the attorney-in-fact to credit to  such  account
at  the end of the fiscal year of such reciprocal insurer, an amount not
less than one quarter of such subscriber's underwriting earnings  during
such period.
  (2) Such accumulation shall be made so long as such subscriber's oper-
ating reserve is less than twice the amount of annual premiums in force.
  (3) Notwithstanding the foregoing, the superintendent may, upon appli-
cation from the attorney-in-fact[,]:
  (A) approve other methods for accumulating such subscriber's operating
reserve; OR
  (B) PERMIT THE SUSPENSION OF THE ACCUMULATION OF THE OPERATING RESERVE
FOR  A  FISCAL  YEAR  PROVIDED  THAT  THOSE EARNINGS ARE RETURNED TO THE
SUBSCRIBER IN ACCORDANCE WITH  SUBPARAGRAPH  (B)  OF  PARAGRAPH  TWO  OF
SUBSECTION (C) OF THIS SECTION.

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

                                                           LBD14124-02-6

A. 9337--A                          2

  (b)  Any  authorized  reciprocal insurer may, pursuant to the terms of
the subscriber's agreement and to any action of its  advisory  committee
authorized  thereunder,  require its subscribers to accumulate subscrib-
er's operating reserves in excess of the minimum specified in subsection
(a)  [hereof]  OF THIS SECTION and may require a longer period of notice
for the withdrawal of all or any part of such reserve than  that  herein
specified.
  (c)  (1) No subscriber shall have a secured or preferred claim against
any assets of the reciprocal  insurer  arising  out  of  such  operating
reserve,  but all assets held by such insurer shall be available for the
payment of claims of policyholders  and  creditors  of  such  reciprocal
insurer  in  preference  to  any claim for withdrawal by a subscriber as
such.
  (2) Any subscriber's operating reserve accumulated by any such  recip-
rocal insurer shall be maintained at all times, except that:
  (A) a subscriber may, upon withdrawal from membership and cancellation
of all insurance contracts held by [him] THE SUBSCRIBER in such insurer,
and after giving to the attorney-in-fact written notice of withdrawal at
least  sixty days in advance, withdraw the amount of [his] THE SUBSCRIB-
ER'S operating reserve less such surrender charges as  may  be  deducted
pursuant to the subscriber's agreement; OR
  (B) WHERE THE SUPERINTENDENT HAS DETERMINED THAT THE SUSPENSION OF THE
ACCUMULATION  OF  THE  OPERATING RESERVE WOULD NOT BE HARMFUL TO POLICY-
HOLDERS OR THE PEOPLE OF THIS STATE, THE ATTORNEY-IN-FACT  MAY,  IN  THE
FISCAL  YEAR  FOLLOWING THE YEAR FOR WHICH THE SUSPENSION OF THE ACCUMU-
LATION OF THE OPERATING RESERVE WAS AUTHORIZED, RETURN TO EACH SUBSCRIB-
ER AN AMOUNT EQUAL TO THE UNDERWRITING EARNINGS THAT WOULD  HAVE  OTHER-
WISE BEEN CREDITED TO THE SUBSCRIBER'S OPERATING RESERVE.
  (3)  No  [such] withdrawal shall be permitted after an order of liqui-
dation of, or the appointment of a receiver or liquidating trustee  for,
any  such  reciprocal insurer OR, NOTWITHSTANDING ANY OTHER PROVISION OF
LAW TO THE CONTRARY, WHERE THERE IS AN AUTHORIZED CONTROL LEVEL EVENT OR
A MANDATORY CONTROL LEVEL EVENT AS DEFINED IN SECTION  THIRTEEN  HUNDRED
TWENTY-FOUR OF THIS CHAPTER.
  S 2. This act shall take effect immediately.