S T A T E O F N E W Y O R K
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1116
2015-2016 Regular Sessions
I N A S S E M B L Y
January 8, 2015
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Introduced by M. of A. LAVINE -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to authorizing the issu-
ance of certain annuity contracts
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subparagraph (H) of paragraph 1 of subsection (b) of
section 4223 of the insurance law is relettered subparagraph (I) and a
new subparagraph (H) is added to read as follows:
(H) GROUP OR INDIVIDUAL ANNUITY CONTRACT OR CERTIFICATE AUTHORIZED BY
SUBSECTION (G) OF SECTION FOUR THOUSAND TWO HUNDRED FORTY OF THIS ARTI-
CLE.
S 2. Section 4240 of the insurance law is amended by adding a new
subsection (g) to read as follows:
(G) A DOMESTIC OR AUTHORIZED LIFE INSURER MAY ISSUE GROUP OR INDIVID-
UAL ANNUITY CONTRACTS AND CERTIFICATES THAT PROVIDE BENEFITS BASED UPON
THE VALUE OR DECLINE IN VALUE OF ASSETS HELD IN OR RELATING TO AN ALTER-
NATIVE ACCOUNT AT ANY TIME THE CONTRACT OR CERTIFICATE IS OUTSTANDING.
FOR PURPOSES OF THIS ARTICLE, "ALTERNATIVE ACCOUNT" MEANS A TRUST
ACCOUNT, CUSTODIAL ACCOUNT, SECURITIES BROKERAGE ACCOUNT, MANAGED
ACCOUNT, ACTUAL OR SYNTHETIC INVESTMENT PORTFOLIO, OR, IF APPROVED BY
THE SUPERINTENDENT, ANY OTHER ACCOUNT OR INVESTMENT ARRANGEMENT, THE
INVESTMENTS IN OR RELATED TO WHICH SHALL BE AS AUTHORIZED OR APPROVED BY
THE DOMESTIC OR AUTHORIZED LIFE INSURER ISSUING SUCH CONTRACT OR CERTIF-
ICATE. FOR PURPOSES OF THIS SUBSECTION, "ACTUAL OR SYNTHETIC INVESTMENT
PORTFOLIO" SHALL MEAN A PORTFOLIO OF INVESTED ASSETS LEGALLY OR BENEFI-
CIALLY OWNED BY THE OWNER OR BENEFICIARY OF SUCH CONTRACT OR CERTIF-
ICATE, OR A NOTIONAL PORTFOLIO OF INVESTED ASSETS THAT NEED NOT BE OWNED
BY THE OWNER OR BENEFICIARY OF SUCH CONTRACT OR CERTIFICATE BUT THE
ADDITION OR REMOVAL OF ASSETS FROM SUCH NOTIONAL PORTFOLIO ARE SUBJECT
TO THE CONTROL OF THE OWNER OR BENEFICIARY OF SUCH CONTRACT OR CERTIF-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03309-01-5
A. 1116 2
ICATE. ALTERNATIVE ACCOUNTS SHALL NOT BE DEEMED SEPARATE ACCOUNTS OR
SUBJECT TO REGULATIONS APPLYING TO SEPARATE ACCOUNTS AND THE GROUP AND
INDIVIDUAL ANNUITY CONTRACTS AND CERTIFICATES DESCRIBED IN THIS
SUBSECTION SHALL NOT BE SUBJECT TO REGULATIONS CONCERNING SEPARATE
ACCOUNT PRODUCTS.
THE SUPERINTENDENT MAY PROMULGATE REGULATIONS TO:
(1) DEFINE TERMS USED IN THIS SUBSECTION THAT ARE NOT OTHERWISE
DEFINED;
(2) REQUIRE THAT THE DOMESTIC OR AUTHORIZED LIFE INSURER ESTABLISH
ADEQUATE SYSTEMS OF CONTROL AND REPORTING TO ENSURE THAT THE ASSETS HELD
IN OR RELATED TO AN ALTERNATIVE ACCOUNT ARE AUTHORIZED OR APPROVED BY
SUCH INSURER, AND THAT A SUMMARY OF SUCH SYSTEMS BE FILED WITH THE
SUPERINTENDENT, AND UPON FILING SHALL BE DEEMED APPROVED UNLESS WITHIN
THIRTY CALENDAR DAYS AFTER FILING THE SUPERINTENDENT DISAPPROVES SUCH
SUMMARY AND PROVIDES TO THE FILING INSURER A DETAILED EXPLANATION OF THE
BASIS FOR SUCH DISAPPROVAL; AND
(3) THE PROVISIONS OF THIS SUBSECTION SHALL NOT BE DEEMED TO AUTHORIZE
THE SUPERINTENDENT TO PROMULGATE ANY RULE OR REGULATION, CIRCULAR LETTER
OR DIRECTIVE, THAT IN ANY WAY EXPANDS THE SUPERINTENDENT'S AUTHORITY TO
(I) APPROVE OR REGULATE THE INSURER'S ENTIRE INVESTMENT PORTFOLIO OR
INVESTMENT STRATEGY OR THE ASSETS HELD IN OR RELATED TO THE ALTERNATIVE
ACCOUNT, OR (II) IMPOSE STANDARDS ON CORPORATE GOVERNANCE THAT ARE
EITHER STRICTER OR CONTRARY TO THE PROVISIONS CONTAINED IN THIS ARTICLE
OR THE BUSINESS CORPORATION LAW.
S 3. Clause (V) of item (ii) of subparagraph (J) of paragraph 2 of
subsection (a) of section 6901 of the insurance law, as added by chapter
605 of the laws of 2004, is amended to read as follows:
(V) the financial guaranty insurance policies provide that if, prior
to payment by the insurer under the financial guaranty insurance poli-
cies, the guaranty fund has paid a claim under such contracts for an
amount that, when added to the amount payable under the financial guar-
anty insurance policies, would exceed the amount owed under such
contracts, then the financial guaranty insurer shall pay the portion of
the amount payable in excess of the contract amounts to the guaranty
fund instead of to the beneficiary under such contracts; [or]
S 4. Subparagraph (K) of paragraph 2 of subsection (a) of section 6901
of the insurance law, as relettered by chapter 605 of the laws of 2004,
is relettered subparagraph (L) and a new subparagraph (K) is added to
read as follows:
(K) GROUP OR INDIVIDUAL ANNUITY CONTRACTS OR CERTIFICATES AUTHORIZED
BY SUBSECTION (G) OF SECTION FOUR THOUSAND TWO HUNDRED FORTY OF THIS
CHAPTER; OR
S 5. This act shall take effect immediately.