Senate Bill S7168

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

                                  7168

                            I N  S E N A T E

                              April 5, 2016
                               ___________

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  establishing  the
  interstate insurance product regulation compact (Part A); to amend the
  insurance law, in relation to valuation of life insurance policies and
  contracts  (Part B); to amend the insurance law, in relation to insur-
  ance company corporate structure (Part C); to amend the insurance law,
  in relation to the replacement of individual life  insurance  policies
  or  annuity  contracts  (Part  D);  and to amend the insurance law, in
  relation to reports required by insurers (Part E)

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

  Section  1. This act shall be known and may be cited as the "insurance
uniformity and accreditation act".
  S 2. Legislative findings and intent.  The  regulatory  framework  for
providing  oversight  of  the insurance industry in the United States is
largely unique in comparison to the  other  segments  of  the  financial
service  industry  in  this nation and most insurers and the rest of the
financial services industry in foreign jurisdictions.  Insurers  in  the
United  States  are governed under a sometimes complex regulatory struc-
ture overseen by the states. This state-run insurance regulatory  system
has  essentially  functioned  well over recent history in ensuring that:
(1) the insurance industry remains solvent; (2) consumers  of  insurance
products  are  appropriately served with affordable, available insurance
products; and (3) the oversight of the insurance industry,  particularly
the  domestic  industry in each state, is balanced enough to provide the
industry with the ability to grow their businesses and their  market  in
the  state.  The  National Association of Insurance Commissioners (NAIC)
has been in existence since 1871 and is the U.S.   standard-setting  and
regulatory support organization created and governed by the chief insur-
ance regulators from the fifty states, the District of Columbia and five
U.S. territories. Through the NAIC, state insurance regulators establish
standards  and best practices, conduct peer review, and coordinate regu-
latory oversight. The NAIC also functions in  close  collaboration  with

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

                                                           LBD14718-01-6

S. 7168                             2

state  legislators  who represent and support the National Conference of
Insurance Legislators (NCOIL). The state-run insurance  marketplace  has
benefited  from  the  work  of the NAIC, which establishes uniform state
laws, regulations and guidance. This framework provides the basis for an
insurance  regulatory  environment  that is largely consistent among the
states, which supports the goals of a state-run  regulatory  system.  It
provides  states  with  a uniform structure for overseeing the state-run
insurance system, which benefits the entire insurance marketplace.    In
2013,  the Federal Insurance Office of the United States Treasury issued
a mandated study entitled "How to Modernize and Improve  the  System  of
Insurance  Regulation  in  the United States." That study recognized the
efforts of the NAIC by concluding  support  for  the  implementation  of
several  uniform  state  laws  and  regulations established by the NAIC,
including a recommendation that all non-participating states should join
the Interstate Insurance Product Regulation Compact (IIPRC). In 1989-90,
the NAIC adopted certain financial regulation standards  that  form  the
basis  for  a  formal accreditation program that relies on state certif-
ication by other regulators (i.e., peer review) and that requires  risk-
focused  financial surveillance, including on-site examinations, as well
as implementation of certain  solvency-related  model  laws,  rules  and
guidelines.  The New York Department of Financial Services is one of the
jurisdictions currently accredited by this NAIC program.
  The legislature therefore finds that it is in  the  interest  of  this
state  to  implement  into New York law several provisions of NAIC Model
Laws or Regulations, some of which are or may be necessary for New  York
to  maintain  their  NAIC  accreditation,  and  others of which serve to
further the public policy interest for insurance regulation in the State
of New York.
  S 3. This act enacts into law major components  of  legislation  which
are  necessary  to implement the "insurance uniformity and accreditation
act". Each component is wholly contained within  a  Part  identified  as
Parts  A  through  E.  The  effective date for each particular provision
contained within such Part is set forth in  the  last  section  of  such
Part.  Any  provision  in any section contained within a Part, including
the effective date of the Part, which makes a reference to  section  "of
this act", when used in connection with that particular component, shall
be  deemed to mean and refer to the corresponding section of the Part in
which it is found.   Section five of this act  sets  forth  the  general
effective date of this act.

                                 PART A

  Section 1. Legislative findings and intent. An interstate compact is a
contract between the states that allows them to cooperate on multi-state
or  national  issues  while  still  retaining  state control. Interstate
compacts are specifically mentioned in the U.S.   Constitution and  have
been  historically used to address border disputes and water rights. The
use of interstate compacts has expanded significantly in recent  decades
to  cover tax, motor vehicle licensing, environmental, emergency manage-
ment and other issues. Over 200 interstate compacts currently exist, and
on average every state belongs to at least 25 compacts.  The  Interstate
Insurance  Product Regulation Compact, which to date has been adopted by
44 member states, representing approximately two-thirds of  the  premium
volume  in  the  nation,  created the Interstate Insurance Product Regu-
lation Commission (IIPRC). The IIPRC provides the States with a  vehicle
to  (1)  develop  uniform  national product standards that will afford a

S. 7168                             3

high level of protection to  consumers  of  life  insurance,  annuities,
disability income and long-term care insurance products; (2) establish a
central point of filing for these insurance products; and (3) thoroughly
review  product  filings  and make regulatory decisions according to the
uniform product standards.  The  IIPRC  is  an  important  modernization
initiative  that benefits state insurance regulators, consumers, and the
insurance industry. The Compact enhances the efficiency  and  effective-
ness  of  the  way  insurance products are filed, reviewed, and approved
allowing insurance customers to have faster access to competitive insur-
ance products  in  an  ever-changing  global  marketplace.  The  Compact
promotes  uniformity  through  application  of uniform product standards
embedded with strong consumer protections.  The state of New York  seeks
to  join with other states as a member of the Interstate Insurance Prod-
uct Regulation Compact and Commission.
  S 2. The insurance law is amended by adding a new article 82  to  read
as follows:

                               ARTICLE 82
             INTERSTATE INSURANCE PRODUCT REGULATION COMPACT

SECTION 8201. SHORT TITLE.
        8202. PURPOSE.
        8203. DEFINITIONS.
        8204. ESTABLISHMENT OF THE COMMISSION AND VENUE.
        8205. POWERS OF THE COMMISSION.
        8206. ORGANIZATION OF THE COMMISSION.
        8207. MEETINGS AND ACTS OF THE COMMISSION.
        8208. RULES  AND  OPERATING PROCEDURES; RULE MAKING FUNCTIONS OF
                THE COMMISSION AND OPTING OUT OF UNIFORM STANDARDS.
        8209. COMMISSION RECORDS AND ENFORCEMENT.
        8210. DISPUTE RESOLUTION.
        8211. PRODUCT FILING AND APPROVAL.
        8212. REVIEW OF COMMISSION DECISIONS REGARDING FILINGS.
        8213. FINANCE.
        8214. COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT.
        8215. WITHDRAWAL, DEFAULT AND TERMINATION.
        8216. SEVERABILITY AND CONSTRUCTION.
        8217. BINDING EFFECT OF COMPACT AND OTHER LAWS.
  S 8201. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE  CITED  AS
THE "INTERSTATE INSURANCE PRODUCT REGULATION COMPACT".
  S  8202.  PURPOSE.  THE PURPOSES OF THIS COMPACT ARE, THROUGH MEANS OF
JOINT AND COOPERATIVE ACTION AMONG THE COMPACTING STATES:
  (A) TO PROMOTE AND PROTECT THE INTEREST OF CONSUMERS OF INDIVIDUAL AND
GROUP ANNUITY, LIFE INSURANCE,  DISABILITY  INCOME  AND  LONG-TERM  CARE
INSURANCE PRODUCTS;
  (B)  TO  DEVELOP  UNIFORM  STANDARDS  FOR  PRODUCTS  COVERED UNDER THE
COMPACT;
  (C) TO ESTABLISH A CENTRAL CLEARINGHOUSE TO RECEIVE AND PROVIDE PROMPT
REVIEW OF PRODUCTS COVERED UNDER THE  COMPACT  AND,  IN  CERTAIN  CASES,
ADVERTISEMENTS  RELATED  THERETO, SUBMITTED BY INSURERS AUTHORIZED TO DO
BUSINESS IN ONE OR MORE COMPACTING STATES;
  (D) TO GIVE APPROPRIATE REGULATORY APPROVAL TO THOSE  PRODUCT  FILINGS
AND ADVERTISEMENTS SATISFYING THE APPLICABLE UNIFORM STANDARD;
  (E)  TO  IMPROVE  COORDINATION  OF  REGULATORY RESOURCES AND EXPERTISE
BETWEEN STATE INSURANCE DEPARTMENTS REGARDING  THE  SETTING  OF  UNIFORM
STANDARDS AND REVIEW OF INSURANCE PRODUCTS COVERED UNDER THE COMPACT;

S. 7168                             4

  (F)  TO CREATE THE INTERSTATE INSURANCE PRODUCT REGULATION COMMISSION;
AND
  (G)  TO PERFORM SUCH OTHER RELATED FUNCTIONS AS MAY BE CONSISTENT WITH
THE STATE REGULATION OF THE BUSINESS OF INSURANCE.
  S 8203. DEFINITIONS. AS USED IN THIS ARTICLE:
  (A) "ADVERTISEMENT" MEANS  ANY  MATERIAL  DESIGNED  TO  CREATE  PUBLIC
INTEREST IN A PRODUCT, OR INDUCE THE PUBLIC TO PURCHASE, INCREASE, MODI-
FY, REINSTATE, BORROW ON, SURRENDER, REPLACE OR RETAIN A POLICY, AS MORE
SPECIFICALLY  DEFINED  IN  THE  RULES  AND  OPERATING  PROCEDURES OF THE
COMMISSION.
  (B) "BY-LAWS" MEAN THOSE BY-LAWS ESTABLISHED BY THE COMMISSION FOR ITS
GOVERNANCE OR FOR DIRECTING OR CONTROLLING THE COMMISSION'S  ACTIONS  OR
CONDUCT.
  (C)  "COMPACTING STATE" MEANS ANY STATE WHICH HAS ENACTED THIS COMPACT
LEGISLATION AND WHICH HAS NOT WITHDRAWN OR BEEN TERMINATED  PURSUANT  TO
SECTION EIGHT THOUSAND TWO HUNDRED FIFTEEN OF THIS ARTICLE.
  (D)  "COMMISSION"  MEANS  THE "INTERSTATE INSURANCE PRODUCT REGULATION
COMMISSION" ESTABLISHED BY THE COMPACT.
  (E) "COMMISSIONER" MEANS THE CHIEF INSURANCE REGULATORY OFFICIAL OF  A
STATE INCLUDING, BUT NOT LIMITED TO COMMISSIONER, SUPERINTENDENT, DIREC-
TOR OR ADMINISTRATOR.
  (F)  "DOMICILIARY STATE" MEANS THE STATE IN WHICH AN INSURER IS INCOR-
PORATED OR ORGANIZED OR, IN THE CASE OF AN ALIEN INSURER, ITS  STATE  OF
ENTRY.
  (G)  "INSURER" MEANS ANY ENTITY LICENSED BY A STATE TO ISSUE CONTRACTS
OF INSURANCE FOR ANY OF THE LINES OF INSURANCE COVERED BY THIS ARTICLE.
  (H) "MEMBER" MEANS THE PERSON, OR HIS OR HER  DESIGNEE,  CHOSEN  BY  A
COMPACTING STATE FOR SERVICE ON THE COMMISSION.
  (I)  "NON-COMPACTING STATE" MEANS ANY STATE WHICH IS NOT AT THE TIME A
COMPACTING STATE.
  (J) "OPERATING PROCEDURES" MEAN PROCEDURES PROMULGATED BY THE  COMMIS-
SION  IMPLEMENTING  A  RULE,  UNIFORM  STANDARD  OR  A PROVISION OF THIS
COMPACT.
  (K) "PRODUCT" MEANS THE FORM  OF  THE  CONTRACT,  POLICY  APPLICATION,
ENDORSEMENTS,  CERTIFICATE FORMS, EVIDENCE OF COVERAGE FORMS AND RELATED
FORMS FOR AN INDIVIDUAL OR GROUP  ANNUITY,  LIFE  INSURANCE,  DISABILITY
INCOME  OR LONG-TERM CARE INSURANCE PRODUCT, WHICH AN INSURER IS AUTHOR-
IZED TO ISSUE.
  (L) "RULE" MEANS A STATEMENT OF GENERAL  OR  PARTICULAR  APPLICABILITY
AND  FUTURE  EFFECT  PROMULGATED  BY THE COMMISSION, INCLUDING A UNIFORM
STANDARD DEVELOPED PURSUANT TO SECTION EIGHT THOUSAND TWO HUNDRED  EIGHT
OF  THIS  ARTICLE, DESIGNED TO IMPLEMENT, INTERPRET, OR PRESCRIBE LAW OR
POLICY OR DESCRIBING THE ORGANIZATION, PROCEDURE, OR  PRACTICE  REQUIRE-
MENTS OF THE COMMISSION, WHICH SHALL HAVE THE FORCE AND EFFECT OF LAW IN
THE COMPACTING STATES.
  (M)  "STATE"  MEANS  ANY  STATE,  DISTRICT  OR TERRITORY OF THE UNITED
STATES OF AMERICA.
  (N) "THIRD-PARTY FILER" MEANS AN ENTITY THAT SUBMITS A PRODUCT  FILING
TO THE COMMISSION ON BEHALF OF AN INSURER.
  (O)  "UNIFORM STANDARD" MEANS A STANDARD ADOPTED BY THE COMMISSION FOR
A PRODUCT LINE, PURSUANT TO SECTION EIGHT THOUSAND TWO HUNDRED EIGHT  OF
THIS ARTICLE AND SHALL INCLUDE ALL OF THE PRODUCT REQUIREMENTS IN AGGRE-
GATE;  PROVIDED,  THAT EACH UNIFORM STANDARD SHALL BE CONSTRUED, WHETHER
EXPRESS OR IMPLIED, TO PROHIBIT THE USE OF ANY INCONSISTENT,  MISLEADING
OR  AMBIGUOUS  PROVISIONS IN A PRODUCT AND THE FORM OF SUCH PRODUCT MADE

S. 7168                             5

AVAILABLE TO THE PUBLIC SHALL NOT  BE  UNFAIR,  INEQUITABLE  OR  AGAINST
PUBLIC POLICY AS DETERMINED BY THE COMMISSION.
  S  8204. ESTABLISHMENT OF THE COMMISSION AND VENUE. (A) THE COMPACTING
STATES HEREBY ESTABLISH A JOINT PUBLIC AGENCY KNOWN AS  THE  "INTERSTATE
INSURANCE  PRODUCT  REGULATION  COMMISSION".  PURSUANT  TO SECTION EIGHT
THOUSAND TWO HUNDRED EIGHT OF THIS ARTICLE, THE  COMMISSION  SHALL  HAVE
THE  POWER  TO  DEVELOP UNIFORM STANDARDS FOR PRODUCT LINES, RECEIVE AND
PROVIDE PROMPT REVIEW OF PRODUCTS FILED THEREWITH, AND GIVE APPROVAL  TO
THOSE PRODUCT FILINGS SATISFYING APPLICABLE UNIFORM STANDARDS; PROVIDED,
HOWEVER,  THAT IT IS NOT INTENDED FOR THE COMMISSION TO BE THE EXCLUSIVE
ENTITY FOR RECEIPT AND REVIEW OF INSURANCE PRODUCT FILINGS.  NOTHING  IN
THIS  SECTION  SHALL PROHIBIT ANY INSURER FROM FILING ITS PRODUCT IN ANY
STATE WHEREIN SUCH INSURER IS LICENSED TO CONDUCT THE BUSINESS OF INSUR-
ANCE AND SUCH FILING SHALL BE SUBJECT TO THE LAWS  OF  THE  STATE  WHERE
FILED.
  (B)  THE COMMISSION IS A BODY CORPORATE AND POLITIC, AND AN INSTRUMEN-
TALITY OF THE COMPACTING STATES.
  (C) THE COMMISSION IS A NOT-FOR-PROFIT ENTITY, SEPARATE  AND  DISTINCT
FROM THE INDIVIDUAL COMPACTING STATES.
  (D)  THE  COMMISSION  IS SOLELY RESPONSIBLE FOR ITS LIABILITIES UNLESS
OTHERWISE SPECIFICALLY PROVIDED IN THIS  COMPACT,  EXCEPT  THAT,  IN  NO
EVENT  SHALL  THE OBLIGATIONS OF THE COMMISSION BE THE DEBT OF THE STATE
OF NEW YORK NOR SHALL ANY REVENUES OR PROPERTY OF THE STATE OF NEW  YORK
BE LIABLE THEREFOR.
  (E) VENUE IN PROPER AND JUDICIAL PROCEEDINGS BY OR AGAINST THE COMMIS-
SION  SHALL  BE  BROUGHT  SOLELY AND EXCLUSIVELY IN A COURT OF COMPETENT
JURISDICTION WHERE THE PRINCIPAL OFFICE OF THE COMMISSION IS LOCATED.
  S 8205. POWERS OF THE COMMISSION. (A) THE COMMISSION  SHALL  HAVE  THE
FOLLOWING POWERS:
  (1)  TO  PROMULGATE  RULES,  PURSUANT  TO  SECTION  EIGHT THOUSAND TWO
HUNDRED EIGHT OF THIS ARTICLE, WHICH SHALL HAVE THE FORCE AND EFFECT  OF
LAW  AND  SHALL BE BINDING IN THE COMPACTING STATES TO THE EXTENT AND IN
THE MANNER PROVIDED IN THIS ARTICLE;
  (2) TO EXERCISE ITS RULE MAKING  AUTHORITY  AND  ESTABLISH  REASONABLE
UNIFORM STANDARDS FOR PRODUCTS COVERED UNDER THE COMPACT, AND ADVERTISE-
MENT  RELATED  THERETO, WHICH SHALL HAVE THE FORCE AND EFFECT OF LAW AND
SHALL BE BINDING IN THE COMPACTING STATES, BUT ONLY  FOR  SUCH  PRODUCTS
FILED  WITH  THE  COMMISSION; PROVIDED, HOWEVER, THAT A COMPACTING STATE
SHALL HAVE THE RIGHT TO OPT OUT OF SUCH  UNIFORM  STANDARD  PURSUANT  TO
SECTION  EIGHT  THOUSAND TWO HUNDRED EIGHT OF THIS ARTICLE TO THE EXTENT
AND IN THE MANNER PROVIDED IN THIS ARTICLE, AND  PROVIDED  FURTHER  THAT
ANY  UNIFORM STANDARD ESTABLISHED BY THE COMMISSIONER FOR LONG-TERM CARE
INSURANCE PRODUCTS MAY PROVIDE  THE  SAME  OR  GREATER  PROTECTIONS  FOR
CONSUMERS  AS,  BUT  SHALL  NOT PROVIDE LESS THAN, THOSE PROTECTIONS SET
FORTH IN THE NATIONAL ASSOCIATION OF INSURANCE  COMMISSIONERS'  (HEREIN-
AFTER  REFERRED TO AS THE "NAIC") LONG-TERM CARE INSURANCE MODEL ACT AND
LONG-TERM CARE INSURANCE MODEL REGULATION, RESPECTIVELY, ADOPTED  AS  OF
2001. THE COMMISSION SHALL CONSIDER WHETHER ANY SUBSEQUENT AMENDMENTS TO
THE  NAIC LONG-TERM CARE INSURANCE MODEL ACT OR LONG-TERM CARE INSURANCE
MODEL REGULATION ADOPTED BY THE NAIC REQUIRE  AMENDING  OF  THE  UNIFORM
STANDARDS   ESTABLISHED   BY  THE  COMMISSION  FOR  LONG-TERM  INSURANCE
PRODUCTS;
  (3) TO RECEIVE AND REVIEW IN AN EXPEDITIOUS MANNER PRODUCTS FILED WITH
THE  COMMISSION,  INCLUDING  RATE  FILINGS  FOR  DISABILITY  INCOME  AND
LONG-TERM  CARE  INSURANCE PRODUCTS, AND GIVE APPROVAL OF THOSE PRODUCTS
AND RATE FILINGS THAT SATISFY THE  APPLICABLE  UNIFORM  STANDARD,  WHERE

S. 7168                             6

SUCH  APPROVAL  SHALL HAVE THE FORCE AND EFFECT OF LAW AND BE BINDING ON
THE COMPACTING STATES TO THE EXTENT AND IN THE MANNER  PROVIDED  IN  THE
COMPACT;
  (4)  TO  RECEIVE  AND  REVIEW  IN  AN EXPEDITIOUS MANNER ADVERTISEMENT
RELATING TO LONG-TERM CARE INSURANCE PRODUCTS FOR WHICH  UNIFORM  STAND-
ARDS  HAVE  BEEN  ADOPTED  BY  THE COMMISSION, AND GIVE APPROVAL OF SUCH
ADVERTISEMENT THAT SATISFIES THE APPLICABLE UNIFORM  STANDARD.  FOR  ANY
PRODUCT  COVERED UNDER THIS ARTICLE, OTHER THAN LONG-TERM CARE INSURANCE
PRODUCTS, THE COMMISSION SHALL HAVE THE AUTHORITY TO REQUIRE AN  INSURER
TO  SUBMIT  ALL  OR  ANY  PART OF ITS ADVERTISEMENT WITH RESPECT TO THAT
PRODUCT FOR REVIEW OR APPROVAL PRIOR TO USE IF THE COMMISSION DETERMINES
THAT THE NATURE OF THE PRODUCT IS SUCH  THAT  AN  ADVERTISEMENT  OF  THE
PRODUCT  COULD  HAVE THE CAPACITY OR TENDENCY TO MISLEAD THE PUBLIC. THE
ACTIONS OF THE COMMISSION AS PROVIDED IN THIS  SECTION  SHALL  HAVE  THE
FORCE AND EFFECT OF LAW AND SHALL BE BINDING IN THE COMPACTING STATES TO
THE EXTENT AND IN THE MANNER PROVIDED IN THE COMPACT;
  (5)  TO  EXERCISE  RULE  MAKING  AUTHORITY  AND DESIGNATE PRODUCTS AND
ADVERTISEMENT THAT MAY BE SUBJECT TO A SELF-CERTIFICATION PROCESS  WITH-
OUT THE NEED FOR PRIOR APPROVAL BY THE COMMISSION;
  (6)  TO  PROMULGATE  OPERATING  PROCEDURES,  PURSUANT TO SECTION EIGHT
THOUSAND TWO HUNDRED EIGHT OF THIS ARTICLE, WHICH SHALL  BE  BINDING  IN
THE  COMPACTING  STATES  TO THE EXTENT AND IN THE MANNER PROVIDED IN THE
COMPACT;
  (7) TO BRING AND PROSECUTE LEGAL PROCEEDINGS OR ACTIONS IN ITS NAME AS
THE COMMISSION; PROVIDED, THAT  THE  STANDING  OF  ANY  STATE  INSURANCE
DEPARTMENT TO SUE OR BE SUED UNDER APPLICABLE LAW SHALL NOT BE AFFECTED;
  (8)  TO  ISSUE  SUBPOENAS  REQUIRING  THE  ATTENDANCE AND TESTIMONY OF
WITNESSES AND THE PRODUCTION OF EVIDENCE;
  (9) TO ESTABLISH AND MAINTAIN OFFICES;
  (10) TO PURCHASE AND MAINTAIN INSURANCE AND BONDS;
  (11) TO BORROW, ACCEPT OR CONTRACT FOR SERVICES OF PERSONNEL,  INCLUD-
ING, BUT NOT LIMITED TO, EMPLOYEES OF A COMPACTING STATE;
  (12) TO HIRE EMPLOYEES AND ELECT OR APPOINT OFFICERS, AND TO FIX THEIR
COMPENSATION, DEFINE THEIR DUTIES AND GIVE THEM APPROPRIATE AUTHORITY TO
CARRY  OUT  THE  PURPOSES OF THE COMPACT, AND DETERMINE THEIR QUALIFICA-
TIONS; AND TO ESTABLISH THE COMMISSION'S PERSONNEL POLICIES AND PROGRAMS
RELATING TO, AMONG OTHER THINGS, CONFLICTS OF INTEREST, RATES OF COMPEN-
SATION AND QUALIFICATIONS OF PERSONNEL;
  (13) TO ACCEPT ANY AND ALL APPROPRIATE DONATIONS AND GRANTS OF  MONEY,
EQUIPMENT, SUPPLIES, MATERIALS AND SERVICES, AND TO RECEIVE, UTILIZE AND
DISPOSE  OF  THE  SAME;  PROVIDED THAT AT ALL TIMES THE COMMISSION SHALL
STRIVE TO AVOID ANY APPEARANCE OF IMPROPRIETY;
  (14) TO LEASE, PURCHASE, ACCEPT APPROPRIATE GIFTS OR DONATIONS OF,  OR
OTHERWISE  TO OWN, HOLD, IMPROVE OR USE, ANY PROPERTY, REAL, PERSONAL OR
MIXED; PROVIDED THAT AT ALL TIMES THE COMMISSION SHALL STRIVE  TO  AVOID
ANY APPEARANCE OF IMPROPRIETY;
  (15)  TO  SELL,  CONVEY, MORTGAGE, PLEDGE, LEASE, EXCHANGE, ABANDON OR
OTHERWISE DISPOSE OF ANY PROPERTY, REAL, PERSONAL OR MIXED;
  (16) TO REMIT FILING FEES TO COMPACTING STATES AS MAY BE SET FORTH  IN
THE BY-LAWS, RULES OR OPERATING PROCEDURES;
  (17)  TO  ENFORCE  COMPLIANCE BY COMPACTING STATES WITH RULES, UNIFORM
STANDARDS, OPERATING PROCEDURES AND BY-LAWS;
  (18) TO PROVIDE FOR DISPUTE RESOLUTION AMONG COMPACTING STATES;
  (19) TO ADVISE COMPACTING STATES ON ISSUES RELATING TO INSURERS  DOMI-
CILED OR DOING BUSINESS IN NON-COMPACTING JURISDICTIONS, CONSISTENT WITH
THE PURPOSES OF THE COMPACT;

S. 7168                             7

  (20) TO PROVIDE ADVICE AND TRAINING TO THOSE PERSONNEL IN STATE INSUR-
ANCE  DEPARTMENTS  RESPONSIBLE  FOR PRODUCT REVIEW, AND TO BE A RESOURCE
FOR STATE INSURANCE DEPARTMENTS;
  (21) TO ESTABLISH A BUDGET AND MAKE EXPENDITURES;
  (22) TO BORROW MONEY;
  (23)  TO  APPOINT COMMITTEES, INCLUDING ADVISORY COMMITTEES COMPRISING
MEMBERS, STATE INSURANCE REGULATORS, STATE LEGISLATORS OR  THEIR  REPRE-
SENTATIVES,  INSURANCE  INDUSTRY  AND CONSUMER REPRESENTATIVES, AND SUCH
OTHER INTERESTED PERSONS AS MAY BE DESIGNATED IN THE BY-LAWS;
  (24) TO PROVIDE AND RECEIVE INFORMATION FROM, AND  TO  COOPERATE  WITH
LAW ENFORCEMENT AGENCIES;
  (25) TO ADOPT AND USE A CORPORATE SEAL; AND
  (26)  TO PERFORM SUCH OTHER FUNCTIONS AS MAY BE NECESSARY OR APPROPRI-
ATE TO ACHIEVE THE PURPOSES OF THIS COMPACT CONSISTENT  WITH  THE  STATE
REGULATION OF THE BUSINESS OF INSURANCE.
  (B)  ALL DONATIONS, GRANTS OF MONEY, EQUIPMENT, SUPPLIES, MATERIALS OR
SERVICES, PURCHASES, GIFTS, DONATIONS, CONVEYANCES, MORTGAGES,  PLEDGES,
LEASES  AND  EXCHANGES, AS AUTHORIZED BY SUBSECTION (A) OF THIS SECTION,
RECEIVED BY OR ON BEHALF OF THE  COMMISSION  SHALL  BE  LIMITED  TO  THE
DIRECT  FUNDING  OF  THE LAWFUL AND AUTHORIZED OPERATIONS OF THE COMMIS-
SION.
  S 8206. ORGANIZATION OF THE  COMMISSION.  (A)  EACH  COMPACTING  STATE
SHALL  HAVE  AND BE LIMITED TO ONE MEMBER. THE SUPERINTENDENT, OR HIS OR
HER DESIGNATED REPRESENTATIVE,  SHALL  BE  NEW  YORK'S  MEMBER  OF  SUCH
COMMISSION.  EACH  MEMBER  SHALL  BE QUALIFIED TO SERVE IN SUCH CAPACITY
PURSUANT TO APPLICABLE LAW OF THE COMPACTING STATE. ANY  MEMBER  MAY  BE
REMOVED  OR  SUSPENDED  FROM  OFFICE AS PROVIDED BY THE LAW OF THE STATE
FROM WHICH HE OR SHE SHALL BE APPOINTED. ANY VACANCY  OCCURRING  IN  THE
COMMISSION SHALL BE FILLED IN ACCORDANCE WITH THE LAWS OF THE COMPACTING
STATE  WHEREIN SUCH VACANCY EXISTS. NOTHING HEREIN SHALL BE CONSTRUED TO
AFFECT THE MANNER IN WHICH A COMPACTING STATE DETERMINES THE ELECTION OR
APPOINTMENT AND QUALIFICATION OF ITS OWN SUPERINTENDENT.
  (B) EACH MEMBER SHALL BE ENTITLED TO ONE VOTE AND SHALL HAVE AN OPPOR-
TUNITY TO PARTICIPATE IN THE GOVERNANCE OF THE COMMISSION IN  ACCORDANCE
WITH  THE  BY-LAWS. NOTWITHSTANDING ANY PROVISION OF THIS ARTICLE TO THE
CONTRARY, NO ACTION OF THE COMMISSION WITH RESPECT TO  THE  PROMULGATION
OF  A  UNIFORM  STANDARD  SHALL  BE  EFFECTIVE  UNLESS TWO-THIRDS OF THE
MEMBERS VOTE IN FAVOR THEREOF.
  (C) THE COMMISSION SHALL, BY A  MAJORITY  OF  THE  MEMBERS,  PRESCRIBE
BY-LAWS  TO  GOVERN  ITS  CONDUCT  AS MAY BE NECESSARY OR APPROPRIATE TO
CARRY OUT THE PURPOSES, AND EXERCISE THE POWERS, OF THE COMPACT, INCLUD-
ING, BUT NOT LIMITED TO:
  (1) ESTABLISHING THE FISCAL YEAR OF THE COMMISSION;
  (2) PROVIDING  REASONABLE  PROCEDURES  FOR  HOLDING  MEETINGS  OF  THE
MANAGEMENT COMMITTEE;
  (3)  PROVIDING  REASONABLE STANDARDS AND PROCEDURES FOR THE ESTABLISH-
MENT OF OTHER COMMITTEES, AND GOVERNING ANY GENERAL OR  SPECIFIC  DELEG-
ATION OF ANY AUTHORITY OR FUNCTION OF THE COMMISSION;
  (4)  PROVIDING  REASONABLE PROCEDURES FOR CALLING AND CONDUCTING MEET-
INGS OF THE COMMISSION THAT CONSIST OF A MAJORITY OF COMMISSION MEMBERS,
ENSURING REASONABLE ADVANCE NOTICE OF EACH SUCH MEETING,  AND  PROVIDING
FOR  THE  RIGHT  OF CITIZENS TO ATTEND EACH SUCH MEETING WITH ENUMERATED
EXCEPTIONS DESIGNED TO PROTECT THE PUBLIC'S  INTEREST,  THE  PRIVACY  OF
INDIVIDUALS  AND  INSURERS'  PROPRIETARY  INFORMATION,  INCLUDING  TRADE
SECRETS. THE COMMISSION MAY MEET IN CAMERA ONLY AFTER A MAJORITY OF  THE
ENTIRE  MEMBERSHIP  VOTES TO CLOSE A MEETING IN TOTO OR IN PART. AS SOON

S. 7168                             8

AS PRACTICABLE, THE COMMISSION MUST MAKE PUBLIC A COPY OF  THE  VOTE  TO
CLOSE  THE MEETING REVEALING THE VOTE OF EACH MEMBER WITH NO PROXY VOTES
ALLOWED, AND VOTES TAKEN DURING SUCH MEETING;
  (5)  ESTABLISHING  THE  TITLES,  DUTIES  AND  AUTHORITY AND REASONABLE
PROCEDURES FOR THE ELECTION OF THE OFFICERS OF THE COMMISSION;
  (6) PROVIDING REASONABLE STANDARDS AND PROCEDURES FOR  THE  ESTABLISH-
MENT OF THE PERSONNEL POLICIES AND PROGRAMS OF THE COMMISSION.  NOTWITH-
STANDING  ANY  CIVIL  SERVICE  OR  OTHER  SIMILAR LAWS OF ANY COMPACTING
STATE, THE BY-LAWS SHALL EXCLUSIVELY GOVERN THE PERSONNEL  POLICIES  AND
PROGRAMS OF THE COMMISSION;
  (7) PROMULGATING A CODE OF ETHICS TO ADDRESS PERMISSIBLE AND PROHIBIT-
ED ACTIVITIES OF COMMISSION MEMBERS AND EMPLOYEES; AND
  (8) PROVIDING A MECHANISM FOR WINDING UP THE OPERATIONS OF THE COMMIS-
SION  AND  THE EQUITABLE DISPOSITION OF ANY SURPLUS FUNDS THAT MAY EXIST
AFTER THE TERMINATION OF THE COMPACT AFTER THE PAYMENT AND/OR  RESERVING
OF ALL OF ITS DEBTS AND OBLIGATIONS.
  (D)  THE COMMISSION SHALL PUBLISH ITS BY-LAWS IN A CONVENIENT FORM AND
FILE A COPY THEREOF AND A COPY OF ANY AMENDMENT THERETO, WITH THE APPRO-
PRIATE AGENCY OR OFFICER IN EACH OF THE COMPACTING STATES.
  (E) A MANAGEMENT COMMITTEE COMPRISING NO MORE  THAN  FOURTEEN  MEMBERS
SHALL BE ESTABLISHED AS FOLLOWS:
  (1) ONE MEMBER FROM EACH OF THE SIX COMPACTING STATES WITH THE LARGEST
PREMIUM  VOLUME  FOR  INDIVIDUAL  AND  GROUP ANNUITIES, LIFE, DISABILITY
INCOME AND  LONG-TERM  CARE  INSURANCE  PRODUCTS,  DETERMINED  FROM  THE
RECORDS OF THE NAIC AS OF DECEMBER THIRTY-FIRST OF THE PRIOR YEAR;
  (2)  FOUR  MEMBERS  FROM  THOSE  COMPACTING  STATES  WITH AT LEAST TWO
PERCENT OF THE MARKET BASED ON THE PREMIUM VOLUME DESCRIBED IN PARAGRAPH
ONE OF THIS SUBSECTION, OTHER THAN SIX COMPACTING STATES WITH THE  LARG-
EST  PREMIUM  VOLUME,  SELECTED  ON  A ROTATING BASIS AS PROVIDED IN THE
BY-LAWS; AND
  (3) FOUR MEMBERS FROM THOSE  COMPACTING  STATES  WITH  LESS  THAN  TWO
PERCENT  OF  THE  MARKET, BASED ON THE PREMIUM VOLUME DESCRIBED IN PARA-
GRAPH ONE OF THIS SUBSECTION, WITH ONE SELECTED FROM EACH  OF  THE  FOUR
ZONE REGIONS OF THE NAIC AS PROVIDED IN THE BY-LAWS.
  (F)  THE  MANAGEMENT COMMITTEE SHALL HAVE SUCH AUTHORITY AND DUTIES AS
MAY BE SET FORTH IN THE BY-LAWS, INCLUDING BUT NOT LIMITED TO:
  (1) MANAGING THE AFFAIRS OF THE COMMISSION IN A MANNER CONSISTENT WITH
THE BY-LAWS AND PURPOSES OF THE COMMISSION;
  (2) ESTABLISHING AND OVERSEEING AN  ORGANIZATIONAL  STRUCTURE  WITHIN,
AND  APPROPRIATE  PROCEDURES  FOR,  THE  COMMISSION  TO  PROVIDE FOR THE
CREATION OF UNIFORM STANDARDS AND OTHER RULES,  RECEIPT  AND  REVIEW  OF
PRODUCT  FILINGS, ADMINISTRATIVE AND TECHNICAL SUPPORT FUNCTIONS, REVIEW
OF DECISIONS REGARDING THE DISAPPROVAL OF  A  PRODUCT  FILING,  AND  THE
REVIEW  OF  ELECTIONS MADE BY A COMPACTING STATE TO OPT OUT OF A UNIFORM
STANDARD; PROVIDED THAT A UNIFORM STANDARD SHALL NOT BE SUBMITTED TO THE
COMPACTING STATES FOR ADOPTION UNLESS  APPROVED  BY  TWO-THIRDS  OF  THE
MEMBERS OF THE MANAGEMENT COMMITTEE;
  (3) OVERSEEING THE OFFICES OF THE COMMISSION; AND
  (4) PLANNING, IMPLEMENTING, AND COORDINATING COMMUNICATIONS AND ACTIV-
ITIES  WITH  OTHER  STATE, FEDERAL AND LOCAL GOVERNMENT ORGANIZATIONS IN
ORDER TO ADVANCE THE GOALS OF THE COMMISSION.
  (G) THE COMMISSION SHALL ELECT ANNUALLY OFFICERS FROM  THE  MANAGEMENT
COMMITTEE,  WITH EACH HAVING SUCH AUTHORITY AND DUTIES, AS MAY BE SPECI-
FIED IN THE BY-LAWS.
  (H) THE MANAGEMENT COMMITTEE MAY,  SUBJECT  TO  THE  APPROVAL  OF  THE
COMMISSION,  APPOINT  OR  RETAIN  AN EXECUTIVE DIRECTOR FOR SUCH PERIOD,

S. 7168                             9

UPON SUCH TERMS AND CONDITIONS AND FOR SUCH COMPENSATION AS THE  COMMIS-
SION  MAY DEEM APPROPRIATE. THE EXECUTIVE DIRECTOR SHALL SERVE AS SECRE-
TARY TO THE COMMISSION, BUT SHALL NOT BE A MEMBER OF THE COMMISSION. THE
EXECUTIVE  DIRECTOR  SHALL HIRE AND SUPERVISE SUCH OTHER STAFF AS MAY BE
AUTHORIZED BY THE COMMISSION.
  (I) A LEGISLATIVE COMMITTEE  COMPRISING  STATE  LEGISLATORS  OR  THEIR
DESIGNEES  SHALL  BE  ESTABLISHED TO MONITOR THE OPERATIONS OF, AND MAKE
RECOMMENDATIONS  TO,  THE  COMMISSION;  PROVIDED  THAT  THE  MANNER   OF
SELECTION  AND  TERM OF ANY LEGISLATIVE COMMITTEE MEMBER SHALL BE AS SET
FORTH IN THE BY-LAWS. PRIOR TO THE ADOPTION BY  THE  COMMISSION  OF  ANY
UNIFORM  STANDARD,  REVISION  TO  THE  BY-LAWS,  ANNUAL  BUDGET OR OTHER
SIGNIFICANT MATTER AS MAY BE PROVIDED IN  THE  BY-LAWS,  THE  MANAGEMENT
COMMITTEE SHALL CONSULT WITH AND REPORT TO THE LEGISLATIVE COMMITTEE.
  (J)  THE  COMMISSION  SHALL  ESTABLISH TWO ADVISORY COMMITTEES, ONE OF
WHICH SHALL COMPRISE CONSUMER REPRESENTATIVES INDEPENDENT OF THE  INSUR-
ANCE  INDUSTRY  AND  THE  OTHER  COMPRISING INSURANCE INDUSTRY REPRESEN-
TATIVES.
  (K) THE COMMISSION MAY ESTABLISH ADDITIONAL ADVISORY COMMITTEES AS ITS
BY-LAWS MAY PROVIDE FOR THE CARRYING OUT OF ITS FUNCTIONS.
  (L) THE COMMISSION SHALL MAINTAIN ITS CORPORATE BOOKS AND  RECORDS  IN
ACCORDANCE WITH THE BY-LAWS.
  (M) THE MEMBERS, OFFICERS, EXECUTIVE DIRECTOR, EMPLOYEES AND REPRESEN-
TATIVES  OF  THE  COMMISSION  SHALL  BE  IMMUNE FROM SUIT AND LIABILITY,
EITHER PERSONALLY OR IN THEIR OFFICIAL CAPACITY, FOR  ANY  ACTION  TAKEN
REASONABLY  AND  IN GOOD FAITH WHICH RESULTS IN A CLAIM FOR DAMAGE TO OR
LOSS OF PROPERTY OR PERSONAL INJURY OR OTHER CIVIL LIABILITY  CAUSED  BY
OR  ARISING  OUT  OF  ANY  ACTUAL OR ALLEGED ACT, ERROR OR OMISSION THAT
OCCURRED, OR THAT SUCH PERSON  HAD  A  REASONABLE  BASIS  FOR  BELIEVING
OCCURRED  WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR RESPONSI-
BILITIES; PROVIDED, THAT NOTHING IN THIS SECTION SHALL BE  CONSTRUED  TO
PROTECT ANY SUCH PERSON FROM SUIT AND/OR LIABILITY FOR ANY DAMAGE, LOSS,
INJURY  OR  LIABILITY  CAUSED  BY  THE INTENTIONAL OR WILLFUL AND WANTON
MISCONDUCT OF THAT PERSON.
  (N) THE COMMISSION SHALL DEFEND ANY MEMBER, OFFICER, EXECUTIVE  DIREC-
TOR,  EMPLOYEE  OR  REPRESENTATIVE OF THE COMMISSION IN ANY CIVIL ACTION
SEEKING TO IMPOSE LIABILITY ARISING OUT OF ANY ACTUAL  OR  ALLEGED  ACT,
ERROR  OR  OMISSION THAT OCCURRED WITHIN THE SCOPE OF COMMISSION EMPLOY-
MENT, DUTIES OR RESPONSIBILITIES, OR THAT THE DEFENDANT HAD A REASONABLE
BASIS FOR BELIEVING OCCURRED WITHIN THE SCOPE OF COMMISSION  EMPLOYMENT,
DUTIES OR RESPONSIBILITIES; PROVIDED, THAT NOTHING IN THIS SECTION SHALL
BE CONSTRUED TO PROHIBIT THAT PERSON FROM RETAINING HIS OR HER OWN COUN-
SEL;  AND  PROVIDED  FURTHER,  THAT  THE ACTUAL OR ALLEGED ACT, ERROR OR
OMISSION DID NOT RESULT FROM THAT PERSON'S INTENTIONAL  OR  WILLFUL  AND
WANTON MISCONDUCT.
  (O) THE COMMISSION SHALL INDEMNIFY AND HOLD HARMLESS ANY MEMBER, OFFI-
CER,  EXECUTIVE  DIRECTOR,  EMPLOYEE OR REPRESENTATIVE OF THE COMMISSION
FOR THE AMOUNT OF ANY  SETTLEMENT  OR  JUDGMENT  OBTAINED  AGAINST  SUCH
PERSONS ARISING OUT OF ANY ACTUAL OR ALLEGED ACT, ERROR OR OMISSION THAT
OCCURRED  WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR RESPONSI-
BILITIES, OR THAT SUCH PERSON  HAD  A  REASONABLE  BASIS  FOR  BELIEVING
OCCURRED  WITHIN THE SCOPE OF COMMISSION EMPLOYMENT, DUTIES OR RESPONSI-
BILITIES, PROVIDED, THAT THE ACTUAL OR ALLEGED ACT,  ERROR  OR  OMISSION
DID  NOT RESULT FROM THE INTENTIONAL OR WILLFUL AND WANTON MISCONDUCT OF
ANY SUCH PERSON.

S. 7168                            10

  S 8207. MEETINGS AND ACTS OF THE COMMISSION. (A) THE COMMISSION  SHALL
MEET AND TAKE SUCH ACTIONS AS ARE CONSISTENT WITH THE PROVISIONS OF THIS
COMPACT AND THE BY-LAWS.
  (B)  EACH  MEMBER  OF THE COMMISSION SHALL HAVE THE RIGHT AND POWER TO
CAST A VOTE TO WHICH THAT COMPACTING STATE IS ENTITLED  AND  TO  PARTIC-
IPATE IN THE BUSINESS AND AFFAIRS OF THE COMMISSION. A MEMBER SHALL VOTE
IN PERSON OR BY SUCH OTHER MEANS AS PROVIDED IN THE BY-LAWS. THE BY-LAWS
MAY PROVIDE FOR MEMBERS' PARTICIPATION IN MEETINGS BY TELEPHONE OR OTHER
MEANS OF COMMUNICATION.
  (C) THE COMMISSION SHALL MEET AT LEAST ONCE DURING EACH CALENDAR YEAR.
ADDITIONAL MEETINGS SHALL BE HELD AS SET FORTH IN THE BY-LAWS.
  S  8208.  RULES AND OPERATING PROCEDURES; RULE MAKING FUNCTIONS OF THE
COMMISSION AND OPTING OUT OF UNIFORM STANDARDS. (A) THE COMMISSION SHALL
PROMULGATE REASONABLE RULES, INCLUDING UNIFORM STANDARDS  AND  OPERATING
PROCEDURES, IN ORDER TO EFFECTIVELY AND EFFICIENTLY ACHIEVE THE PURPOSES
OF  THE COMPACT. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THE COMMIS-
SION EXERCISES ITS RULE MAKING AUTHORITY IN A MANNER THAT IS BEYOND  THE
SCOPE  OF  THE  PURPOSES  OF THIS ARTICLE, OR THE POWERS GRANTED IN THIS
SECTION, THEN SUCH ACTION BY THE COMMISSION SHALL BE INVALID AND HAVE NO
FORCE AND EFFECT.
  (B) RULES AND OPERATING PROCEDURES SHALL BE MADE PURSUANT  TO  A  RULE
MAKING  PROCESS  THAT CONFORMS TO THE STATE ADMINISTRATIVE PROCEDURE ACT
OF 1981 AS AMENDED, AS MAY BE  APPROPRIATE  TO  THE  OPERATIONS  OF  THE
COMMISSION. BEFORE THE COMMISSION ADOPTS A UNIFORM STANDARD, THE COMMIS-
SION SHALL GIVE WRITTEN NOTICE TO THE RELEVANT STATE LEGISLATIVE COMMIT-
TEE  IN  EACH  COMPACTING  STATE RESPONSIBLE FOR INSURANCE ISSUES OF ITS
INTENTION TO ADOPT SUCH UNIFORM STANDARD. THE COMMISSION IN  ADOPTING  A
UNIFORM  STANDARD SHALL CONSIDER FULLY ALL SUBMITTED MATERIALS AND ISSUE
A CONCISE EXPLANATION OF ITS DECISION.
  (C) A UNIFORM STANDARD SHALL BECOME EFFECTIVE NINETY  DAYS  AFTER  ITS
PROMULGATION  BY THE COMMISSION OR SUCH LATER DATE AS THE COMMISSION MAY
DETERMINE; PROVIDED, HOWEVER, THAT A COMPACTING STATE MAY OPT OUT  OF  A
UNIFORM STANDARD AS PROVIDED IN THIS ARTICLE. "OPT OUT" SHALL BE DEFINED
AS  ANY  ACTION BY A COMPACTING STATE TO DECLINE TO ADOPT OR PARTICIPATE
IN A PROMULGATED UNIFORM STANDARD. ALL OTHER RULES AND OPERATING  PROCE-
DURES,  AND  AMENDMENTS  THERETO,  SHALL BECOME EFFECTIVE AS OF THE DATE
SPECIFIED IN EACH RULE, OPERATING PROCEDURE OR AMENDMENT.
  (D) A COMPACTING STATE MAY OPT OUT OF A UNIFORM  STANDARD,  EITHER  BY
LEGISLATION  OR  REGULATION DULY PROMULGATED BY THE SUPERINTENDENT UNDER
THE STATE ADMINISTRATIVE PROCEDURE ACT. IF A COMPACTING STATE ELECTS  TO
OPT OUT OF A UNIFORM STANDARD BY REGULATION, IT MUST GIVE WRITTEN NOTICE
TO  THE  COMMISSION  NO  LATER  THAN TEN BUSINESS DAYS AFTER THE UNIFORM
STANDARD IS PROMULGATED OR AT THE TIME THE STATE  BECOMES  A  COMPACTING
STATE,  AND  FIND  THAT THE UNIFORM STANDARD DOES NOT PROVIDE REASONABLE
PROTECTIONS TO THE CITIZENS OF THE STATE GIVEN  THE  CONDITIONS  IN  THE
STATE.  THE  SUPERINTENDENT  SHALL  MAKE  SPECIFIC  FINDINGS OF FACT AND
CONCLUSIONS OF LAW, BASED ON A PREPONDERANCE OF THE EVIDENCE,  DETAILING
THE  CONDITIONS  IN THE STATE WHICH WARRANT A DEPARTURE FROM THE UNIFORM
STANDARD AND DETERMINING THAT THE UNIFORM STANDARD WOULD NOT  REASONABLY
PROTECT  THE CITIZENS OF THE STATE. THE SUPERINTENDENT MUST CONSIDER AND
BALANCE THE FOLLOWING FACTORS AND FIND THAT THE CONDITIONS IN THE  STATE
AND NEEDS OF THE CITIZENS OF THE STATE OUTWEIGH:
  (1)  THE INTENT OF THE LEGISLATURE TO PARTICIPATE IN, AND THE BENEFITS
OF, AN INTERSTATE  AGREEMENT  TO  ESTABLISH  NATIONAL  UNIFORM  CONSUMER
PROTECTIONS FOR THE PRODUCTS SUBJECT TO THIS ARTICLE; AND

S. 7168                            11

  (2)  THE PRESUMPTION THAT A UNIFORM STANDARD ADOPTED BY THE COMMISSION
PROVIDES REASONABLE PROTECTIONS TO CONSUMERS OF THE RELEVANT PRODUCT.
  NOTWITHSTANDING  THE FOREGOING, A COMPACTING STATE MAY, AT THE TIME OF
ITS ENACTMENT OF THE COMPACT, PROSPECTIVELY OPT OUT OF ALL UNIFORM STAN-
DARDS INVOLVING THE  LONG-TERM  CARE  INSURANCE  PRODUCTS  BY  EXPRESSLY
PROVIDING  FOR  SUCH  OPT  OUT  IN THE ENACTED COMPACT, AND SUCH OPT OUT
SHALL NOT BE TREATED AS A MATERIAL VARIANCE IN THE OFFER  OR  ACCEPTANCE
OF  ANY  STATE  TO  PARTICIPATE IN THE COMPACT. SUCH AN OPT OUT SHALL BE
EFFECTIVE AT THE TIME OF ENACTMENT OF  THE  COMPACT  BY  THE  COMPACTING
STATE  AND SHALL APPLY TO ALL EXISTING UNIFORM STANDARDS INVOLVING LONG-
TERM CARE INSURANCE PRODUCTS AND THOSE SUBSEQUENTLY PROMULGATED.
  (E) IF A COMPACTING STATE ELECTS TO OPT OUT OF A UNIFORM STANDARD, THE
UNIFORM STANDARD SHALL REMAIN APPLICABLE IN THE COMPACTING STATE  ELECT-
ING  TO  OPT OUT UNTIL SUCH TIME THE OPT OUT LEGISLATION IS ENACTED INTO
LAW OR THE REGULATION IS PROMULGATED.
  (F) ONCE THE OPT OUT OF A  UNIFORM  STANDARD  BY  A  COMPACTING  STATE
BECOMES  EFFECTIVE AS PROVIDED UNDER THE LAWS OF THAT STATE, THE UNIFORM
STANDARD SHALL HAVE NO FURTHER FORCE AND EFFECT IN THAT STATE UNLESS AND
UNTIL THE LEGISLATION OR REGULATION IMPLEMENTING THE OPT OUT IS REPEALED
OR OTHERWISE BECOMES INEFFECTIVE UNDER THE  LAWS  OF  THE  STATE.  IF  A
COMPACTING STATE OPTS OUT OF A UNIFORM STANDARD AFTER THE UNIFORM STAND-
ARD  HAS  BEEN  MADE EFFECTIVE IN THAT STATE, THE OPT OUT SHALL HAVE THE
SAME PROSPECTIVE EFFECT AS PROVIDED UNDER  SECTION  EIGHT  THOUSAND  TWO
HUNDRED FIFTEEN OF THIS ARTICLE FOR WITHDRAWALS.
  (G) IF A COMPACTING STATE HAS FORMALLY INITIATED THE PROCESS OF OPTING
OUT  OF  A  UNIFORM STANDARD BY REGULATION, AND WHILE THE REGULATORY OPT
OUT IS PENDING, THE COMPACTING STATE MAY  PETITION  THE  COMMISSION,  AT
LEAST FIFTEEN DAYS BEFORE THE EFFECTIVE DATE OF THE UNIFORM STANDARD, TO
STAY  THE  EFFECTIVENESS  OF  THE  UNIFORM  STANDARD  IN THAT STATE. THE
COMMISSION MAY GRANT A STAY IF IT DETERMINES THE REGULATORY OPT  OUT  IS
BEING  PURSUED  IN  A  REASONABLE  MANNER  AND  THERE IS A LIKELIHOOD OF
SUCCESS. IF A STAY IS GRANTED OR EXTENDED BY THE COMMISSION, THE STAY OR
EXTENSION THEREOF MAY POSTPONE THE EFFECTIVE DATE BY UP TO NINETY  DAYS,
UNLESS  AFFIRMATIVELY  EXTENDED  BY  THE COMMISSION; PROVIDED HOWEVER, A
STAY MAY NOT BE PERMITTED TO REMAIN IN EFFECT FOR  MORE  THAN  ONE  YEAR
UNLESS  THE  COMPACTING STATE CAN SHOW EXTRAORDINARY CIRCUMSTANCES WHICH
WARRANT A CONTINUANCE OF THE STAY INCLUDING, BUT  NOT  LIMITED  TO,  THE
EXISTENCE  OF A LEGAL CHALLENGE WHICH PREVENTS THE COMPACTING STATE FROM
OPTING OUT. A STAY MAY BE TERMINATED BY THE COMMISSION UPON NOTICE  THAT
THE RULE MAKING PROCESS HAS BEEN TERMINATED.
  (H)  NOT LATER THAN THIRTY DAYS AFTER A RULE OR OPERATING PROCEDURE IS
PROMULGATED, ANY PERSON MAY FILE A PETITION FOR JUDICIAL REVIEW  OF  THE
RULE  OR OPERATING PROCEDURE; PROVIDED, HOWEVER, THAT THE FILING OF SUCH
A PETITION SHALL NOT STAY OR OTHERWISE PREVENT  THE  RULE  OR  OPERATING
PROCEDURE  FROM BECOMING EFFECTIVE UNLESS THE COURT FINDS THAT THE PETI-
TIONER HAS A SUBSTANTIAL LIKELIHOOD OF SUCCESS.  THE  COURT  SHALL  GIVE
DEFERENCE  TO  THE  ACTIONS OF THE COMMISSION CONSISTENT WITH APPLICABLE
LAW AND SHALL NOT FIND THE RULE OR OPERATING PROCEDURE TO BE UNLAWFUL IF
THE RULE OR OPERATING PROCEDURE REPRESENTS A REASONABLE EXERCISE OF  THE
COMMISSION'S AUTHORITY.
  S  8209.  COMMISSION RECORDS AND ENFORCEMENT. (A) THE COMMISSION SHALL
PROMULGATE RULES  ESTABLISHING  CONDITIONS  AND  PROCEDURES  FOR  PUBLIC
INSPECTION  AND  COPYING OF ITS INFORMATION AND OFFICIAL RECORDS, EXCEPT
SUCH INFORMATION AND RECORDS INVOLVING THE PRIVACY  OF  INDIVIDUALS  AND
INSURERS'  TRADE SECRETS. THE COMMISSION MAY PROMULGATE ADDITIONAL RULES
UNDER WHICH IT MAY MAKE AVAILABLE TO FEDERAL AND STATE AGENCIES, INCLUD-

S. 7168                            12

ING LAW ENFORCEMENT AGENCIES, RECORDS AND INFORMATION  OTHERWISE  EXEMPT
FROM  DISCLOSURE,  AND  MAY  ENTER INTO AGREEMENTS WITH SUCH AGENCIES TO
RECEIVE OR EXCHANGE INFORMATION OR RECORDS SUBJECT TO NONDISCLOSURE  AND
CONFIDENTIALITY PROVISIONS.
  (B) EXCEPT AS TO PRIVILEGED RECORDS, DATA AND INFORMATION, THE LAWS OF
ANY  COMPACTING  STATE  PERTAINING  TO  CONFIDENTIALITY OR NONDISCLOSURE
SHALL NOT RELIEVE ANY COMPACTING  STATE  COMMISSIONER  OF  THE  DUTY  TO
DISCLOSE  ANY  RELEVANT  RECORDS, DATA OR INFORMATION TO THE COMMISSION;
PROVIDED HOWEVER, THAT DISCLOSURE TO THE COMMISSION SHALL NOT BE  DEEMED
TO  WAIVE  OR  OTHERWISE  AFFECT  ANY  CONFIDENTIALITY  REQUIREMENT; AND
PROVIDED FURTHER THAT, EXCEPT AS OTHERWISE EXPRESSLY  PROVIDED  IN  THIS
ARTICLE, THE COMMISSION SHALL NOT BE SUBJECT TO THE LAWS OF ANY COMPACT-
ING  STATE  PERTAINING TO CONFIDENTIALITY AND NONDISCLOSURE WITH RESPECT
TO RECORDS, DATA AND INFORMATION IN ITS POSSESSION. CONFIDENTIAL  INFOR-
MATION  OF  THE COMMISSION SHALL REMAIN CONFIDENTIAL AFTER SUCH INFORMA-
TION IS PROVIDED TO ANY COMMISSIONER.
  (C) THE COMMISSION SHALL MONITOR COMPACTING STATES FOR COMPLIANCE WITH
DULY ADOPTED BY-LAWS, RULES, INCLUDING UNIFORM STANDARDS, AND  OPERATING
PROCEDURES.  THE  COMMISSION  SHALL  NOTIFY SUCH NONCOMPLYING COMPACTING
STATE IN WRITING OF ITS NONCOMPLIANCE WITH COMMISSION BY-LAWS, RULES  OR
OPERATING  PROCEDURES.  IF  THE  NONCOMPLYING  COMPACTING STATE FAILS TO
REMEDY SUCH NONCOMPLIANCE WITHIN THE TIME SPECIFIED  IN  THE  NOTICE  OF
NONCOMPLIANCE,  THE COMPACTING STATE SHALL BE DEEMED TO BE IN DEFAULT AS
SET FORTH IN SECTION EIGHT THOUSAND TWO HUNDRED FIFTEEN OF THIS ARTICLE.
  (D) THE COMMISSIONER OF ANY STATE IN WHICH AN INSURER IS AUTHORIZED TO
DO BUSINESS, OR IS CONDUCTING THE BUSINESS OF INSURANCE, SHALL  CONTINUE
TO EXERCISE HIS OR HER AUTHORITY TO OVERSEE THE MARKET REGULATION OF THE
ACTIVITIES  OF  THE  INSURER  IN  ACCORDANCE  WITH THE PROVISIONS OF THE
STATE'S LAW. THE  COMMISSIONER'S  ENFORCEMENT  OF  COMPLIANCE  WITH  THE
COMPACT IS GOVERNED BY THE FOLLOWING PROVISIONS:
  (1)  WITH RESPECT TO THE COMMISSIONER'S MARKET REGULATION OF A PRODUCT
OR ADVERTISEMENT THAT IS APPROVED OR CERTIFIED BY  THE  COMMISSION,  THE
CONTENT OF THE PRODUCT OR ADVERTISEMENT SHALL NOT CONSTITUTE A VIOLATION
OF  THE PROVISIONS, STANDARDS OR REQUIREMENTS OF THE COMPACT EXCEPT UPON
A FINAL ORDER OF THE COMMISSION, ISSUED AT THE REQUEST OF A COMMISSIONER
AFTER PRIOR NOTICE TO THE INSURER AND AN OPPORTUNITY FOR HEARING  BEFORE
THE COMMISSION.
  (2)  BEFORE  A  COMMISSIONER  MAY BRING AN ACTION FOR VIOLATION OF ANY
PROVISION, STANDARD OR  REQUIREMENT  OF  THE  COMPACT  RELATING  TO  THE
CONTENT OF AN ADVERTISEMENT NOT APPROVED OR CERTIFIED BY THE COMMISSION,
THE  COMMISSION  OR  AN  AUTHORIZED COMMISSION OFFICER OR EMPLOYEE, MUST
AUTHORIZE THE ACTION. HOWEVER, AUTHORIZATION PURSUANT TO THIS  PARAGRAPH
DOES  NOT  REQUIRE  NOTICE  TO  THE  INSURER, OPPORTUNITY FOR HEARING OR
DISCLOSURE OF REQUESTS FOR AUTHORIZATION OR RECORDS OF THE  COMMISSION'S
ACTION ON SUCH REQUESTS.
  S  8210.  DISPUTE  RESOLUTION.  THE COMMISSION SHALL ATTEMPT, UPON THE
REQUEST OF A MEMBER, TO RESOLVE ANY DISPUTES OR OTHER  ISSUES  THAT  ARE
SUBJECT TO THIS COMPACT AND WHICH MAY ARISE BETWEEN TWO OR MORE COMPACT-
ING  STATES, OR BETWEEN COMPACTING STATES AND NON-COMPACTING STATES, AND
THE COMMISSION SHALL PROMULGATE AN  OPERATING  PROCEDURE  PROVIDING  FOR
RESOLUTION OF SUCH DISPUTES.
  S  8211.  PRODUCT  FILING  AND  APPROVAL. (A) INSURERS AND THIRD-PARTY
FILERS SEEKING TO HAVE A PRODUCT APPROVED BY THE COMMISSION  SHALL  FILE
SUCH  PRODUCT  WITH,  AND PAY APPLICABLE FILING FEES TO, THE COMMISSION.
NOTHING IN THIS ARTICLE SHALL BE  CONSTRUED  TO  RESTRICT  OR  OTHERWISE
PREVENT AN INSURER FROM FILING ITS PRODUCT WITH THE INSURANCE DEPARTMENT

S. 7168                            13

IN ANY STATE WHEREIN SUCH INSURER IS LICENSED TO CONDUCT THE BUSINESS OF
INSURANCE,  AND  SUCH  FILING SHALL BE SUBJECT TO THE LAWS OF THE STATES
WHERE FILED.
  (B) THE COMMISSION SHALL ESTABLISH APPROPRIATE FILING AND REVIEW PROC-
ESSES  AND  PROCEDURES PURSUANT TO COMMISSION RULES AND OPERATING PROCE-
DURES. NOTWITHSTANDING ANY PROVISION IN THIS SECTION  TO  THE  CONTRARY,
THE COMMISSION SHALL PROMULGATE RULES TO ESTABLISH CONDITIONS AND PROCE-
DURES  UNDER  WHICH THE COMMISSION WILL PROVIDE PUBLIC ACCESS TO PRODUCT
FILING INFORMATION. IN ESTABLISHING SUCH  RULES,  THE  COMMISSION  SHALL
CONSIDER  THE  INTERESTS OF THE PUBLIC IN HAVING ACCESS TO SUCH INFORMA-
TION, AS WELL AS PROTECTION OF PERSONAL MEDICAL AND  FINANCIAL  INFORMA-
TION  AND  TRADE  SECRETS,  THAT MAY BE CONTAINED IN A PRODUCT FILING OR
SUPPORTING INFORMATION.
  (C) ANY PRODUCT APPROVED BY THE COMMISSION MAY BE  SOLD  OR  OTHERWISE
ISSUED  IN  THOSE  COMPACTING  STATES  IN  WHICH  THE INSURER IS LEGALLY
AUTHORIZED TO DO BUSINESS.
  S 8212. REVIEW OF COMMISSION  DECISIONS  REGARDING  FILINGS.  (A)  NOT
LATER THAN THIRTY DAYS AFTER THE COMMISSION HAS GIVEN NOTICE OF A DISAP-
PROVED  PRODUCT  OR ADVERTISEMENT FILED WITH THE COMMISSION, THE INSURER
OR THIRD PARTY FILER WHOSE FILING WAS DISAPPROVED MAY APPEAL THE  DETER-
MINATION  TO  A REVIEW PANEL APPOINTED BY THE COMMISSION. THE COMMISSION
SHALL PROMULGATE RULES  TO  ESTABLISH  PROCEDURES  FOR  APPOINTING  SUCH
REVIEW  PANEL AND PROVIDE FOR NOTICE AND HEARING. AN ALLEGATION THAT THE
COMMISSION, IN DISAPPROVING A PRODUCT OR ADVERTISEMENT  FILED  WITH  THE
COMMISSION,  ACTED  ARBITRARILY,  CAPRICIOUSLY OR IN A MANNER THAT IS AN
ABUSE OF DISCRETION OR OTHERWISE NOT IN ACCORDANCE WITH LAW, IS  SUBJECT
TO  JUDICIAL  REVIEW  IN ACCORDANCE WITH SUBSECTION (E) OF SECTION EIGHT
THOUSAND TWO HUNDRED FOUR OF THIS ARTICLE.
  (B) THE COMMISSION SHALL HAVE AUTHORITY TO MONITOR, REVIEW AND  RECON-
SIDER  PRODUCTS AND ADVERTISEMENT SUBSEQUENT TO THEIR FILING OR APPROVAL
UPON A FINDING THAT THE PRODUCT DOES NOT MEET THE RELEVANT UNIFORM STAN-
DARD. WHERE APPROPRIATE, THE  COMMISSION  MAY  WITHDRAW  OR  MODIFY  ITS
APPROVAL  AFTER PROPER NOTICE AND HEARING, SUBJECT TO THE APPEAL PROCESS
SET FORTH IN SUBSECTION (A) OF THIS SECTION.
  S 8213. FINANCE. (A) THE COMMISSION  SHALL  PAY  OR  PROVIDE  FOR  THE
PAYMENT  OF  THE  REASONABLE EXPENSES OF ITS ESTABLISHMENT AND ORGANIZA-
TION. TO FUND THE COST OF ITS INITIAL  OPERATIONS,  THE  COMMISSION  MAY
ACCEPT  CONTRIBUTIONS AND OTHER FORMS OF FUNDING FROM THE NAIC, COMPACT-
ING STATES AND OTHER SOURCES. CONTRIBUTIONS AND OTHER FORMS  OF  FUNDING
FROM  OTHER  SOURCES  SHALL BE OF SUCH A NATURE THAT THE INDEPENDENCE OF
THE COMMISSION CONCERNING THE PERFORMANCE OF ITS  DUTIES  SHALL  NOT  BE
COMPROMISED.
  (B)  THE  COMMISSION  SHALL COLLECT A FILING FEE FROM EACH INSURER AND
THIRD PARTY FILER FILING A PRODUCT WITH THE COMMISSION TO COVER THE COST
OF THE OPERATIONS AND ACTIVITIES OF THE COMMISSION AND ITS  STAFF  IN  A
TOTAL AMOUNT SUFFICIENT TO COVER THE COMMISSION'S ANNUAL BUDGET.
  (C)  THE  COMMISSION'S  BUDGET FOR A FISCAL YEAR SHALL NOT BE APPROVED
UNTIL IT HAS BEEN SUBJECT TO NOTICE AND COMMENT AS SET FORTH IN  SECTION
EIGHT THOUSAND TWO HUNDRED EIGHT OF THIS ARTICLE.
  (D)  THE  COMMISSION  SHALL  BE EXEMPT FROM ALL TAXATION IN AND BY THE
COMPACTING STATES.
  (E) THE COMMISSION SHALL NOT  PLEDGE  THE  CREDIT  OF  ANY  COMPACTING
STATE,  EXCEPT  BY  AND  WITH  THE  APPROPRIATE  LEGAL AUTHORITY OF THAT
COMPACTING STATE.
  (F) THE COMMISSION SHALL KEEP COMPLETE AND ACCURATE  ACCOUNTS  OF  ALL
ITS  INTERNAL RECEIPTS, INCLUDING GRANTS AND DONATIONS AND DISBURSEMENTS

S. 7168                            14

OF ALL FUNDS UNDER ITS CONTROL. THE INTERNAL FINANCIAL ACCOUNTS  OF  THE
COMMISSION  SHALL  BE  SUBJECT  TO THE ACCOUNTING PROCEDURES ESTABLISHED
UNDER ITS BY-LAWS. THE FINANCIAL  ACCOUNTS  AND  REPORTS  INCLUDING  THE
SYSTEM  OF  INTERNAL  CONTROLS AND PROCEDURES OF THE COMMISSION SHALL BE
AUDITED ANNUALLY BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. UPON THE
DETERMINATION OF THE COMMISSION, BUT NO LESS FREQUENTLY THAN EVERY THREE
YEARS, THE REVIEW OF SUCH INDEPENDENT AUDITOR SHALL INCLUDE A MANAGEMENT
AND PERFORMANCE AUDIT OF THE COMMISSION. THE COMMISSION  SHALL  MAKE  AN
ANNUAL  REPORT TO THE GOVERNOR AND LEGISLATURE OF THE COMPACTING STATES,
WHICH SHALL INCLUDE A REPORT OF SUCH INDEPENDENT AUDIT. THE COMMISSION'S
INTERNAL ACCOUNTS SHALL NOT BE CONFIDENTIAL AND SUCH  MATERIALS  MAY  BE
SHARED  WITH  THE  COMMISSIONER  OF  ANY  COMPACTING STATE UPON REQUEST,
PROVIDED, HOWEVER, THAT ANY WORK PAPERS RELATED TO ANY INTERNAL OR INDE-
PENDENT AUDIT AND ANY INFORMATION REGARDING THE PRIVACY  OF  INDIVIDUALS
AND  INSURERS'  PROPRIETARY  INFORMATION, INCLUDING TRADE SECRETS, SHALL
REMAIN CONFIDENTIAL.
  (G) NO COMPACTING STATE SHALL HAVE ANY CLAIM TO OR  OWNERSHIP  OF  ANY
PROPERTY  HELD BY OR VESTED IN THE COMMISSION OR TO ANY COMMISSION FUNDS
HELD PURSUANT TO THE PROVISIONS OF THIS COMPACT.
  S 8214. COMPACTING STATES, EFFECTIVE DATE AND AMENDMENT. (A) ANY STATE
IS ELIGIBLE TO BECOME A COMPACTING STATE.
  (B) THE COMPACT SHALL BECOME EFFECTIVE AND  BINDING  UPON  LEGISLATIVE
ENACTMENT  OF  THE  COMPACT  INTO LAW BY TWO COMPACTING STATES; PROVIDED
HOWEVER, THAT THE COMMISSION SHALL  BECOME  EFFECTIVE  FOR  PURPOSES  OF
ADOPTING  UNIFORM STANDARDS FOR REVIEWING, AND GIVING APPROVAL OR DISAP-
PROVAL OF, PRODUCTS FILED WITH THE COMMISSION  THAT  SATISFY  APPLICABLE
UNIFORM STANDARDS ONLY AFTER TWENTY-SIX STATES ARE COMPACTING STATES OR,
ALTERNATIVELY,  BY STATES REPRESENTING GREATER THAN FORTY PERCENT OF THE
PREMIUM VOLUME FOR LIFE INSURANCE, ANNUITY, DISABILITY INCOME AND  LONG-
TERM CARE INSURANCE PRODUCTS, BASED ON RECORDS OF THE NAIC FOR THE PRIOR
YEAR.  THEREAFTER, IT SHALL BECOME EFFECTIVE AND BINDING AS TO ANY OTHER
COMPACTING STATE UPON ENACTMENT OF THE COMPACT INTO LAW BY THAT STATE.
  (C) AMENDMENTS TO THE COMPACT MAY BE PROPOSED BY  THE  COMMISSION  FOR
ENACTMENT  BY THE COMPACTING STATES. NO AMENDMENT SHALL BECOME EFFECTIVE
AND BINDING UPON THE COMMISSION AND THE  COMPACTING  STATES  UNLESS  AND
UNTIL ALL COMPACTING STATES ENACT THE AMENDMENT INTO LAW.
  S  8215.  WITHDRAWAL,  DEFAULT AND TERMINATION. (A)(1) ONCE EFFECTIVE,
THE COMPACT SHALL CONTINUE IN FORCE AND REMAIN  BINDING  UPON  EACH  AND
EVERY  COMPACTING  STATE;  PROVIDED THAT A COMPACTING STATE MAY WITHDRAW
FROM THE COMPACT ("WITHDRAWING STATE") BY  ENACTING  A  STATUTE  SPECIF-
ICALLY REPEALING THE STATUTE WHICH ENACTED THE COMPACT INTO LAW.
  (2)  THE  EFFECTIVE  DATE  OF  WITHDRAWAL IS THE EFFECTIVE DATE OF THE
REPEALING STATUTE.  HOWEVER, THE WITHDRAWAL SHALL NOT APPLY TO ANY PROD-
UCT FILINGS APPROVED OR SELF-CERTIFIED, OR  ANY  ADVERTISEMENT  OF  SUCH
PRODUCTS, ON THE DATE THE REPEALING STATUTE BECOMES EFFECTIVE, EXCEPT BY
MUTUAL  AGREEMENT OF THE COMMISSION AND THE WITHDRAWING STATE UNLESS THE
APPROVAL IS RESCINDED BY THE WITHDRAWING STATE AS PROVIDED IN  PARAGRAPH
FIVE OF THIS SUBSECTION.
  (3) THE COMMISSIONER OF THE WITHDRAWING STATE SHALL IMMEDIATELY NOTIFY
THE MANAGEMENT COMMITTEE IN WRITING UPON THE INTRODUCTION OF LEGISLATION
REPEALING THIS COMPACT IN THE WITHDRAWING STATE.
  (4)  THE  COMMISSION  SHALL  NOTIFY THE OTHER COMPACTING STATES OF THE
INTRODUCTION OF SUCH LEGISLATION WITHIN TEN DAYS AFTER  ITS  RECEIPT  OF
NOTICE THEREOF.
  (5)  THE  WITHDRAWING STATE IS RESPONSIBLE FOR ALL OBLIGATIONS, DUTIES
AND LIABILITIES INCURRED  THROUGH  THE  EFFECTIVE  DATE  OF  WITHDRAWAL,

S. 7168                            15

INCLUDING  ANY  OBLIGATIONS,  THE PERFORMANCE OF WHICH EXTEND BEYOND THE
EFFECTIVE DATE OF WITHDRAWAL, EXCEPT TO THE EXTENT THOSE OBLIGATIONS MAY
HAVE BEEN RELEASED OR RELINQUISHED BY MUTUAL AGREEMENT OF THE COMMISSION
AND  THE  WITHDRAWING  STATE.  THE COMMISSION'S APPROVAL OF PRODUCTS AND
ADVERTISEMENT PRIOR TO THE EFFECTIVE DATE OF WITHDRAWAL  SHALL  CONTINUE
TO  BE  EFFECTIVE  AND BE GIVEN FULL FORCE AND EFFECT IN THE WITHDRAWING
STATE, UNLESS FORMALLY RESCINDED BY THE WITHDRAWING STATE  IN  THE  SAME
MANNER AS PROVIDED BY THE LAWS OF THE WITHDRAWING STATE FOR THE PROSPEC-
TIVE  DISAPPROVAL OF PRODUCTS OR ADVERTISEMENT PREVIOUSLY APPROVED UNDER
STATE LAW.
  (6) REINSTATEMENT FOLLOWING WITHDRAWAL OF ANY COMPACTING  STATE  SHALL
OCCUR  UPON  THE  EFFECTIVE  DATE OF THE WITHDRAWING STATE'S LEGISLATION
REENACTING THE COMPACT.
  (B) (1) IF THE COMMISSION DETERMINES THAT ANY COMPACTING STATE HAS  AT
ANY TIME DEFAULTED ("DEFAULTING STATE") IN THE PERFORMANCE OF ANY OF ITS
OBLIGATIONS  OR RESPONSIBILITIES UNDER THIS COMPACT, THE BY-LAWS OR DULY
PROMULGATED RULES OR OPERATING PROCEDURES, THEN, AFTER NOTICE AND  HEAR-
ING  AS  SET  FORTH  IN THE BY-LAWS, ALL RIGHTS, PRIVILEGES AND BENEFITS
CONFERRED BY THE COMPACT ON THE DEFAULTING STATE SHALL BE SUSPENDED FROM
THE EFFECTIVE DATE OF DEFAULT AS FIXED BY THE  COMMISSION.  THE  GROUNDS
FOR  DEFAULT  INCLUDE,  BUT  ARE NOT LIMITED TO, FAILURE OF A COMPACTING
STATE TO PERFORM ITS OBLIGATIONS  OR  RESPONSIBILITIES,  AND  ANY  OTHER
GROUNDS DESIGNATED IN COMMISSION RULES. THE COMMISSION SHALL IMMEDIATELY
NOTIFY THE DEFAULTING STATE IN WRITING OF THE DEFAULTING STATE'S SUSPEN-
SION  PENDING  A CURE OF THE DEFAULT. THE COMMISSION SHALL STIPULATE THE
CONDITIONS AND THE TIME PERIOD WITHIN WHICH THE  DEFAULTING  STATE  MUST
CURE  ITS  DEFAULT.  IF  THE  DEFAULTING STATE FAILS TO CURE THE DEFAULT
WITHIN THE TIME PERIOD SPECIFIED BY THE COMMISSION, THE DEFAULTING STATE
SHALL BE TERMINATED FROM THE COMPACT  AND  ALL  RIGHTS,  PRIVILEGES  AND
BENEFITS CONFERRED BY THE COMPACT SHALL BE TERMINATED FROM THE EFFECTIVE
DATE OF TERMINATION.
  (2)  PRODUCT  APPROVALS  BY  THE COMMISSION OR PRODUCT SELF-CERTIFICA-
TIONS, OR ANY ADVERTISEMENT IN CONNECTION WITH SUCH PRODUCT, THAT ARE IN
FORCE ON THE EFFECTIVE DATE OF TERMINATION SHALL REMAIN IN FORCE IN  THE
DEFAULTING STATE IN THE SAME MANNER AS IF THE DEFAULTING STATE HAD WITH-
DRAWN VOLUNTARILY UNDER THIS SECTION.
  (3)  REINSTATEMENT  FOLLOWING  TERMINATION  OF  ANY  COMPACTING  STATE
REQUIRES A REENACTMENT OF THE COMPACT BY THAT STATE.
  (C)(1) THE COMPACT DISSOLVES EFFECTIVE UPON THE DATE OF THE WITHDRAWAL
OR DEFAULT OF THE COMPACTING  STATE  WHICH  REDUCES  MEMBERSHIP  IN  THE
COMPACT TO ONE COMPACTING STATE.
  (2)  UPON THE DISSOLUTION OF THE COMPACT, THE COMPACT BECOMES NULL AND
VOID AND SHALL BE OF NO FURTHER FORCE OR EFFECT, AND  THE  BUSINESS  AND
AFFAIRS  OF THE COMMISSION SHALL BE WOUND UP AND ANY SURPLUS FUNDS SHALL
BE DISTRIBUTED IN ACCORDANCE WITH THE BY-LAWS.
  S 8216. SEVERABILITY AND  CONSTRUCTION.  (A)  THE  PROVISIONS  OF  THE
COMPACT  SHALL  BE  SEVERABLE;  AND  IF  ANY PHRASE, CLAUSE, SENTENCE OR
PROVISION IS DEEMED  UNENFORCEABLE,  THE  REMAINING  PROVISIONS  OF  THE
COMPACT SHALL BE ENFORCEABLE.
  (B)  THE  PROVISIONS  OF  THE  COMPACT SHALL BE LIBERALLY CONSTRUED TO
EFFECTUATE ITS PURPOSES.
  S 8217. BINDING EFFECT OF COMPACT AND OTHER LAWS. (A) NOTHING IN  THIS
SECTION PREVENTS THE ENFORCEMENT OF ANY OTHER LAW OF A COMPACTING STATE,
EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION.
  (B)  FOR  ANY  PRODUCT  APPROVED  OR  CERTIFIED TO THE COMMISSION, THE
RULES, UNIFORM STANDARDS AND ANY OTHER REQUIREMENTS  OF  THE  COMMISSION

S. 7168                            16

SHALL  CONSTITUTE  THE  EXCLUSIVE  PROVISIONS APPLICABLE TO THE CONTENT,
APPROVAL AND CERTIFICATION OF SUCH PRODUCTS. FOR ADVERTISEMENT  THAT  IS
SUBJECT  TO  THE  COMMISSION'S  AUTHORITY, ANY RULE, UNIFORM STANDARD OR
OTHER  REQUIREMENT  OF  THE  COMMISSION WHICH GOVERNS THE CONTENT OF THE
ADVERTISEMENT SHALL CONSTITUTE THE EXCLUSIVE PROVISION  THAT  A  COMMIS-
SIONER  MAY  APPLY  TO THE CONTENT OF THE ADVERTISEMENT. NOTWITHSTANDING
THE FOREGOING, NO ACTION TAKEN  BY  THE  COMMISSION  SHALL  ABROGATE  OR
RESTRICT:
  (1) THE ACCESS OF ANY PERSON TO STATE COURTS;
  (2)  REMEDIES AVAILABLE UNDER STATE LAW RELATED TO BREACH OF CONTRACT,
TORT OR OTHER LAWS NOT SPECIFICALLY DIRECTED TO THE CONTENT OF THE PROD-
UCT;
  (3) STATE LAW RELATING TO THE CONSTRUCTION OF INSURANCE CONTRACTS; OR
  (4) THE AUTHORITY OF THE ATTORNEY GENERAL OF THE STATE INCLUDING,  BUT
NOT  LIMITED TO, MAINTAINING ANY ACTIONS OR PROCEEDINGS AS AUTHORIZED BY
LAW.
  (C) ALL INSURANCE PRODUCTS  FILED  WITH  INDIVIDUAL  STATES  SHALL  BE
SUBJECT TO THE LAWS OF THOSE STATES.
  (D)  ALL  LAWFUL  ACTIONS  OF  THE COMMISSION, INCLUDING ALL RULES AND
OPERATING PROCEDURES PROMULGATED BY THE COMMISSION, ARE BINDING UPON THE
COMPACTING STATES.
  (E) ALL AGREEMENTS BETWEEN THE COMMISSION AND  THE  COMPACTING  STATES
ARE BINDING IN ACCORDANCE WITH THEIR TERMS.
  (F)  UPON  THE  REQUEST  OF  A PARTY TO A CONFLICT OVER THE MEANING OR
INTERPRETATION OF COMMISSION ACTIONS, AND UPON A MAJORITY  VOTE  OF  THE
COMPACTING  STATES, THE COMMISSION MAY ISSUE ADVISORY OPINIONS REGARDING
THE DISPUTED MEANING OR INTERPRETATION.
  (G) IN THE EVENT ANY PROVISION OF THIS ARTICLE EXCEEDS  THE  CONSTITU-
TIONAL  LIMITS  IMPOSED  ON THE LEGISLATURE OF ANY COMPACTING STATE, THE
OBLIGATIONS, DUTIES, POWERS OR JURISDICTION SOUGHT TO  BE  CONFERRED  BY
THAT  PROVISION  UPON  THE  COMMISSION  SHALL  BE INEFFECTIVE AS TO SUCH
COMPACTING STATE, AND SUCH OBLIGATIONS, DUTIES, POWERS  OR  JURISDICTION
SHALL REMAIN IN THE COMPACTING STATE AND SHALL BE EXERCISED BY THE AGEN-
CY THEREOF TO WHICH SUCH OBLIGATIONS, DUTIES, POWERS OR JURISDICTION ARE
DELEGATED BY LAW IN EFFECT AT THE TIME THE COMPACT BECOMES EFFECTIVE.
  S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

                                 PART B

  Section  1. Subsection (a) of section 4217 of the insurance law, para-
graphs 1 and 4 as amended by chapter 22 of the laws of 1994, is  amended
to read as follows:
  (a)  (1)  FOR  THE  PURPOSES OF THIS SECTION THE FOLLOWING DEFINITIONS
SHALL APPLY ON OR AFTER THE OPERATIVE DATE OF THE VALUATION MANUAL:
  (A) THE TERM "ACCIDENT AND  HEALTH  INSURANCE"  MEANS  CONTRACTS  THAT
INCORPORATE  MORBIDITY RISK AND PROVIDE PROTECTION AGAINST ECONOMIC LOSS
RESULTING FROM ACCIDENT, SICKNESS, OR MEDICAL CONDITIONS AND AS  MAY  BE
SPECIFIED IN THE VALUATION MANUAL.
  (B)  THE  TERM  "APPOINTED  ACTUARY"  MEANS A QUALIFIED ACTUARY WHO IS
APPOINTED IN ACCORDANCE WITH THE VALUATION MANUAL TO PREPARE THE ACTUAR-
IAL OPINION REQUIRED IN PARAGRAPH TWO OF SUBSECTION (E) OF THIS SECTION.
  (C) THE TERM "COMPANY" MEANS AN ENTITY, WHICH (I) HAS WRITTEN, ISSUED,
OR REINSURED LIFE INSURANCE CONTRACTS,  ACCIDENT  AND  HEALTH  INSURANCE
CONTRACTS,  OR DEPOSIT-TYPE CONTRACTS IN THIS STATE AND HAS AT LEAST ONE
SUCH POLICY IN FORCE OR ON CLAIM OR (II) HAS WRITTEN, ISSUED,  OR  REIN-

S. 7168                            17

SURED LIFE INSURANCE CONTRACTS, ACCIDENT AND HEALTH INSURANCE CONTRACTS,
OR DEPOSIT-TYPE CONTRACTS IN ANY STATE AND IS REQUIRED TO HOLD A CERTIF-
ICATE  OF  AUTHORITY TO WRITE LIFE INSURANCE, ACCIDENT AND HEALTH INSUR-
ANCE, OR DEPOSIT-TYPE CONTRACTS IN THIS STATE.
  (D)  THE  TERM  "DEPOSIT-TYPE  CONTRACT"  MEANS  CONTRACTS THAT DO NOT
INCORPORATE MORTALITY OR MORBIDITY RISKS AND AS MAY BE SPECIFIED IN  THE
VALUATION MANUAL.
  (E) THE TERM "LIFE INSURANCE" MEANS CONTRACTS THAT INCORPORATE MORTAL-
ITY  RISK, INCLUDING ANNUITY AND PURE ENDOWMENT CONTRACTS, AND AS MAY BE
SPECIFIED IN THE VALUATION MANUAL.
  (F) THE TERM  "NAIC"  MEANS  THE  NATIONAL  ASSOCIATION  OF  INSURANCE
COMMISSIONERS.
  (G)  THE TERM "POLICYHOLDER BEHAVIOR" MEANS ANY ACTION A POLICYHOLDER,
CONTRACT HOLDER OR ANY OTHER PERSON WITH THE  RIGHT  TO  ELECT  OPTIONS,
SUCH  AS  A  CERTIFICATE  HOLDER,  MAY  TAKE  UNDER A POLICY OR CONTRACT
SUBJECT TO THIS ACT INCLUDING, BUT NOT LIMITED  TO,  LAPSE,  WITHDRAWAL,
TRANSFER,  DEPOSIT,  PREMIUM  PAYMENT,  LOAN,  ANNUITIZATION, OR BENEFIT
ELECTIONS PRESCRIBED BY THE POLICY OR CONTRACT BUT EXCLUDING  EVENTS  OF
MORTALITY  OR  MORBIDITY  THAT  RESULT  IN  BENEFITS PRESCRIBED IN THEIR
ESSENTIAL ASPECTS BY THE TERMS OF THE POLICY OR CONTRACT.
  (H) THE TERM "PRINCIPLE-BASED VALUATION"  MEANS  A  RESERVE  VALUATION
THAT  USES  ONE OR MORE METHODS OR ONE OR MORE ASSUMPTIONS DETERMINED BY
THE INSURER AND IS REQUIRED  TO  COMPLY  WITH  SUBSECTION  (H)  OF  THIS
SECTION AS SPECIFIED IN THE VALUATION MANUAL.
  (I)  THE TERM "QUALIFIED ACTUARY" MEANS AN INDIVIDUAL WHO IS QUALIFIED
TO SIGN THE APPLICABLE STATEMENT OF ACTUARIAL OPINION IN ACCORDANCE WITH
THE AMERICAN ACADEMY OF ACTUARIES QUALIFICATION STANDARDS FOR  ACTUARIES
SIGNING  SUCH STATEMENTS AND WHO MEETS THE REQUIREMENTS SPECIFIED IN THE
VALUATION MANUAL.
  (J) THE TERM "TAIL RISK" MEANS A RISK THAT  OCCURS  EITHER  WHERE  THE
FREQUENCY  OF  LOW  PROBABILITY  EVENTS  IS HIGHER THAN EXPECTED UNDER A
NORMAL PROBABILITY DISTRIBUTION OR WHERE THERE ARE  OBSERVED  EVENTS  OF
VERY SIGNIFICANT SIZE OR MAGNITUDE.
  (K)  THE  TERM  "VALUATION  MANUAL"  MEANS  THE  MANUAL  OF  VALUATION
INSTRUCTIONS ADOPTED BY THE NAIC AS SPECIFIED  IN  THIS  SECTION  OR  AS
SUBSEQUENTLY AMENDED.
  (2)(A)  FOR  POLICIES AND CONTRACTS ISSUED PRIOR TO THE OPERATIVE DATE
OF THE VALUATION MANUAL:
  (I) The superintendent shall annually value, or cause  to  be  valued,
the  reserve liabilities (hereinafter called reserves) for all outstand-
ing insurance policies and contracts of  every  life  insurance  company
doing  business  in  this state ISSUED ON OR AFTER THE EFFECTIVE DATE OF
SECTION FOUR THOUSAND TWO HUNDRED TWENTY-ONE OF THIS ARTICLE  AND  PRIOR
TO  THE OPERATIVE DATE OF THE VALUATION MANUAL, except that, in the case
of an alien company, such valuation  shall  be  limited  to  its  United
States business[, and may certify the amount of any such reserves, spec-
ifying  the  mortality  table  or  tables, rate or rates of interest and
methods (net level premium method or other) used in the  calculation  of
such reserves]. In calculating such reserves, the superintendent may use
group methods and approximate averages for fractions of a year or other-
wise.
  [(2)] (II) In lieu of the valuation of the reserves herein required of
any  foreign  or  alien company, the superintendent may accept any valu-
ation made, or caused to be made, by the insurance supervisory  official
of any state or other jurisdiction when such valuation complies with the
minimum standard [herein] provided [and if the official of such state or

S. 7168                            18

jurisdiction  accepts as sufficient and valid for all legal purposes the
certificate of valuation of the  superintendent  when  such  certificate
states  the  valuation to have been made in a specified manner according
to  which  the  aggregate reserves would be at least as large as if they
had been computed in the manner prescribed by the law of that  state  or
jurisdiction] IN THIS SECTION.
  (III) THE PROVISIONS SET FORTH IN SUBSECTIONS (C), (D) AND (F) OF THIS
SECTION  AND  SECTION FOUR THOUSAND TWO HUNDRED EIGHTEEN OF THIS ARTICLE
SHALL APPLY TO ALL POLICIES AND CONTRACTS, AS  APPROPRIATE,  SUBJECT  TO
THIS  SECTION,  ISSUED  ON  OR  AFTER THE EFFECTIVE DATE OF SECTION FOUR
THOUSAND TWO HUNDRED TWENTY-ONE OF THIS ARTICLE AND PRIOR TO THE  OPERA-
TIVE  DATE  OF  THE  VALUATION  MANUAL,  AND THE PROVISIONS SET FORTH IN
SUBSECTIONS (G) AND (H) OF THIS SECTION SHALL  NOT  APPLY  TO  ANY  SUCH
POLICIES AND CONTRACTS.
  (IV)  THE MINIMUM STANDARD FOR THE VALUATION OF POLICIES AND CONTRACTS
ISSUED PRIOR TO THE EFFECTIVE DATE OF SECTION FOUR THOUSAND TWO  HUNDRED
TWENTY-ONE  OF  THIS ARTICLE SHALL BE THAT PROVIDED IN SUBSECTION (B) OF
THIS SECTION.
  (B) FOR POLICIES AND CONTRACTS ISSUED ON OR AFTER THE  OPERATIVE  DATE
OF THE VALUATION MANUAL:
  (I)  THE SUPERINTENDENT SHALL ANNUALLY VALUE OR CAUSE TO BE VALUED THE
RESERVE LIABILITIES (HEREINAFTER CALLED RESERVES) FOR ALL ITS  OUTSTAND-
ING  LIFE  INSURANCE  CONTRACTS,  ANNUITY  AND PURE ENDOWMENT CONTRACTS,
ACCIDENT AND HEALTH  CONTRACTS,  AND  DEPOSIT-TYPE  CONTRACTS  OF  EVERY
COMPANY  ISSUED  ON OR AFTER THE OPERATIVE DATE OF THE VALUATION MANUAL.
IN LIEU OF THE VALUATION OF THE RESERVES REQUIRED OF A FOREIGN OR  ALIEN
COMPANY, THE SUPERINTENDENT MAY ACCEPT A VALUATION MADE, OR CAUSED TO BE
MADE, BY THE INSURANCE SUPERVISORY OFFICIAL OF ANY STATE OR OTHER JURIS-
DICTION  WHEN  THE VALUATION COMPLIES WITH THE MINIMUM STANDARD PROVIDED
IN THIS SECTION.
  (II) THE PROVISIONS SET FORTH IN  SUBSECTIONS  (G)  AND  (H)  OF  THIS
SECTION SHALL APPLY TO ALL POLICIES AND CONTRACTS ISSUED ON OR AFTER THE
OPERATIVE DATE OF THE VALUATION MANUAL.
  (3)  (A) The superintendent may, in his discretion, vary the standards
of mortality applicable to policies of insurance  on  substandard  lives
and  other  extra-hazardous  lives  issued by any life insurance company
doing business in this state.
  (B) He may also, in his discretion, vary the standards of interest and
mortality applicable to contracts issued by an alien  insurer  in  coun-
tries  other than the United States, if such alien insurer maintains the
trusteed surplus prescribed by section one thousand three hundred twelve
of this chapter.
  (4) (A) Any life insurance company doing business in this state  which
has  adopted  as a basis for the valuation of its insurance policies and
contracts standards producing greater reserves in the aggregate than the
minimum standards herein prescribed may  continue  to  use  such  higher
standards as a basis of valuation.
  (B)  After  January  first, nineteen hundred forty, any life insurance
company doing business in this state may, subject to the  provisions  of
paragraph  eight  of  subsection (c) of this section, adopt as the basis
for the valuation of its  insurance  policies  and  contracts  standards
producing  greater  reserves in the aggregate than the minimum standards
herein prescribed; and any such company which shall  have  at  any  time
adopted such higher standards of valuation may, with the approval of the
superintendent, adopt lower standards of valuation, but in no case lower
than  the  minimum standards herein prescribed, provided, however, that,

S. 7168                            19

for the purposes of this paragraph, the holding of  additional  reserves
determined  by [a] THE qualified OR APPOINTED actuary to be necessary to
render the opinion required by subsection (e) of this section shall  not
be deemed to be the adoption of a higher standard of valuation.
  (C)  The  superintendent  may approve any such change if he finds that
the proposed standards are for the best interests of the holders of  the
policies and contracts and annuitants of such company.
  (D) Nothing contained herein shall be deemed to affect the contractual
rights or obligations of the holder of any such policy or contract.
  S  2.  The  opening  paragraph  and subparagraph (A) of paragraph 2 of
subsection (c) of section 4217 of the insurance law, the  opening  para-
graph as amended by chapter 365 of the laws of 1986, are amended to read
as follows:
  Except  as  [otherwise]  provided in paragraphs three, four and ten of
this subsection, the minimum standard for  the  valuation  of  all  such
policies  and  contracts  shall  be  the commissioners reserve valuation
method defined in paragraph six of this subsection and in  section  four
thousand  two  hundred  eighteen of this article, three percent interest
for all life insurance policies issued prior to January first,  nineteen
hundred  sixty-six  and  for  all  individual annuity and pure endowment
contracts issued prior to January  first,  nineteen  hundred  sixty,  or
three  and  one-half  percent  interest  for all life insurance policies
issued on or after January first, nineteen hundred sixty-six  and  prior
to June thirteenth, nineteen hundred seventy-four and for all individual
annuity  and  pure endowment contracts issued on or after January first,
nineteen hundred sixty, and prior to the  operative  date  of  paragraph
three  of  this subsection, or four percent interest for all life insur-
ance policies issued on  or  after  June  thirteenth,  nineteen  hundred
seventy-four  and prior to January first, nineteen hundred seventy-nine,
or four and one-half percent interest for all life  insurance  policies,
issued on or after January first, nineteen hundred seventy-nine, or five
percent  interest  for  all annuities purchased or to be purchased under
group annuity contracts, and the following tables:
  (A) For [all] ordinary policies of life insurance issued on the stand-
ard basis, excluding any disability and  accidental  death  benefits  in
such  policies, the Commissioners 1941 Standard Ordinary Mortality Table
for such policies issued prior to the operative date of  subsection  (h)
of  section  four  thousand  two hundred twenty-one of this article, the
Commissioners 1958 Standard Ordinary Mortality Table for  such  policies
issued  on  or after such operative date and prior to the operative date
of subsection (k) of such section; provided that  for  any  category  of
such policies issued on female risks all modified net premiums and pres-
ent values may be calculated according to an age not more than six years
younger than the actual age of the insured, and for such policies issued
on or after the operative date of such subsection, and, at the option of
the  company, for such policies not providing for nonforfeiture benefits
which are issued on or after nineteen hundred eighty-one  and  prior  to
the operative date of such subsection, (i) the Commissioners 1980 Stand-
ard Ordinary Mortality Table, or (ii) at the election of the company for
any  one  or  more  specified plans of life insurance, the Commissioners
1980 Standard Ordinary Mortality Table with  Ten-Year  Select  Mortality
Factors,  or  (iii) any ordinary mortality table, adopted after nineteen
hundred eighty by the National Association of  Insurance  Commissioners,
that  is approved by the superintendent for use in determining the mini-
mum standard of valuation for such policies, or (iv) any other  ordinary
mortality  table,  or  any  modification of any of the foregoing tables,

S. 7168                            20

approved by the superintendent for any specified  class  or  classes  of
risks.
  S  3. The opening paragraph and subparagraphs (C) and (D) of paragraph
3 of subsection (c) of section 4217 of the insurance law are amended  to
read as follows:
  Except as provided in paragraph four hereof, the minimum standard [for
the]  OF  valuation  [of  all] FOR individual annuity and pure endowment
contracts issued on or after the operative date of  this  paragraph,  as
defined herein, and for [all] annuities and pure endowments purchased or
to  be  purchased on or after the operative date under group annuity and
pure endowment contracts, shall be the commissioners  reserve  valuation
method  defined  in  paragraph  six  hereof and the following tables and
interest rates:
  (C) For [all]  annuities  and  pure  endowments  purchased  or  to  be
purchased  prior  to January first, nineteen hundred seventy-seven under
group annuity and pure endowment contracts, excluding any disability and
accidental death benefits  purchased  under  such  contracts,--the  1971
Group  Annuity  Mortality  Table,  or  any  modification  of  this table
approved by the superintendent, and six percent interest, or such higher
rate or rates of interest for any of such annuities and pure  endowments
as may be approved from time to time by the superintendent.
  (D)  For  [all]  annuities  and  pure  endowments  purchased  or to be
purchased on or after  January  first,  nineteen  hundred  seventy-seven
under group annuity and pure endowment contracts, excluding any disabil-
ity  and  accidental  death benefits purchased under such contracts--the
1971 Group Annuity Mortality  Table,  or  any  group  annuity  mortality
table, adopted after nineteen hundred eighty by the National Association
of  Insurance  Commissioners, that is approved by the superintendent for
use in determining the minimum standard of valuation for such  annuities
and  pure endowments, or any other group annuity mortality table, or any
modification of any of the foregoing tables, approved by the superinten-
dent, and seven and one-half percent interest, or such  higher  rate  or
rates  of  interest for any such annuities and pure endowments as may be
approved from time to time by the superintendent.
  S 4. Subparagraph (A) of paragraph 4 of subsection (c) of section 4217
of the insurance law is amended to read as follows:
  (A) The interest rates used in determining the  minimum  standard  for
the valuation of:
  (i)  [all]  life  insurance  policies  issued in a particular calendar
year, on or after January first, nineteen hundred eighty-two,
  (ii) [all] individual annuity and pure endowment contracts issued in a
particular calendar year on or after  January  first,  nineteen  hundred
eighty-two, and, at the option of the company, [all] annuities purchased
in  a  particular  calendar  year on or after such date under individual
deferred annuity contracts issued prior thereto,
  (iii) [all] annuities and pure endowments purchased  in  a  particular
calendar  year  on  or  after January first, nineteen hundred eighty-two
under group annuity and pure endowment contracts, and
  (iv) the net increase, if any, in a  particular  calendar  year  after
January  first, nineteen hundred eighty-two, in amounts held under guar-
anteed interest contracts,
shall be the calendar year statutory valuation interest rates as defined
in this subsection, or such higher rate or rates of interest for any  of
such  policies,  contracts  or annuities as may be approved from time to
time by the superintendent.

S. 7168                            21

  S 5. The opening paragraph of  subparagraph  (A)  of  paragraph  6  of
subsection  (c)  of section 4217 of the insurance law is amended to read
as follows:
  Except  as  otherwise  provided  in  section four thousand two hundred
eighteen of  this  article,  reserves  according  to  the  commissioners
reserve  valuation  method for the life insurance and endowment benefits
of policies providing for a uniform amount of  insurance  and  requiring
the  payment  of  uniform  premiums  shall be the excess, if any, of the
present value, at the date of valuation, of such future guaranteed bene-
fits provided for by such policies, over the then present value  of  any
future modified net premiums therefor. The modified net premiums for any
such  policy shall be such uniform percentage of the respective contract
premiums for [such] THE benefits SUCH that the  present  value,  at  the
date  of  issue of the policy, of all [such] modified net premiums shall
be equal to the sum of the then present value  of  [such]  THE  benefits
provided for by the policy and the excess of item (i) over item (ii), as
follows:
  S  6. Subsections (d) and (e) of section 4217 of the insurance law, as
added by chapter 22 of the laws of 1994, are amended to read as follows:
  (d) [The] FOR INDIVIDUAL AND GROUP ACCIDENT AND HEALTH INSURANCE POLI-
CIES ISSUED PRIOR TO THE OPERATIVE DATE OF  THE  VALUATION  MANUAL,  THE
company  shall  maintain reserves [for all individual and group accident
and health insurance policies] which [reserves] shall  reflect  a  sound
value  placed  on  its  liabilities under such policies and shall be not
less than the reserves required by regulations which the  superintendent
shall  promulgate.  FOR ACCIDENT AND HEALTH INSURANCE POLICIES ISSUED ON
OR AFTER THE OPERATIVE  DATE  OF  THE  VALUATION  MANUAL,  THE  STANDARD
PRESCRIBED  IN THE VALUATION MANUAL IS THE MINIMUM STANDARD OF VALUATION
REQUIRED UNDER SUBPARAGRAPH (B) OF PARAGRAPH TWO OF  SUBSECTION  (A)  OF
THIS SECTION.
  (e) Actuarial opinion of reserves.
  (1)  ACTUARIAL  OPINION  PRIOR  TO THE OPERATIVE DATE OF THE VALUATION
MANUAL.
  (A) General. Every life insurance company doing business in this state
shall annually submit the opinion of a qualified actuary as  to  whether
the reserves and related actuarial items held in support of the policies
and contracts specified by the superintendent by regulation are computed
appropriately,  are  based  on  assumptions  which  satisfy  contractual
provisions, are consistent with prior reported amounts and  comply  with
applicable  laws  of  this state. The superintendent by regulation shall
define the specifics of this opinion and add any other items  deemed  to
be necessary to its scope.
  [(2) (A)] (B) (I) Actuarial analysis of reserves and assets supporting
such  reserves.  Every  life insurance company, except as exempted by or
pursuant to regulation, shall  also  annually  include  in  the  opinion
required  by  SUBPARAGRAPH  (A)  OF paragraph one of this subsection, an
opinion of the same qualified actuary as to  whether  the  reserves  and
related  actuarial  items  held in support of the policies and contracts
specified by the superintendent by regulation, when considered in  light
of  the  assets  held  by  the  company with respect to the reserves and
related actuarial items, including but not  limited  to  the  investment
earnings on the assets and the considerations anticipated to be received
and  retained  under the policies and contracts, make adequate provision
for the company's obligations under the policies and contracts,  includ-
ing  but  not limited to the benefits under and expenses associated with
the policies and contracts.

S. 7168                            22

  [(B)] (II) The superintendent may provide by regulation for a  transi-
tion period for establishing any additional reserves which the qualified
actuary  may  deem  necessary in order to render the opinion required by
this paragraph.
  [(3)]  (C)  Requirement  for actuarial memorandum. [(A)] (I) Except as
exempted by or  pursuant  to  regulation,  a  memorandum,  in  form  and
substance  acceptable  to the superintendent as specified by regulation,
shall be prepared to support each actuarial opinion  submitted  pursuant
to  ITEM  (I)  OF  subparagraph [(A)] (B) of THIS paragraph [two of this
subsection]. Each company required  to  prepare  such  memorandum  shall
submit  such  memorandum to the superintendent as part of its submission
of the opinion of the qualified actuary pursuant to  such  ITEM  (I)  OF
subparagraph  [(A)]  (B),  except  as otherwise provided in ITEM (II) OF
THIS subparagraph [(B) of this paragraph] and except that if  a  foreign
or  alien company has submitted a memorandum in support of an opinion of
a qualified actuary for the prior year to the commissioner  of  a  state
accredited by the National Association of Insurance Commissioners and if
that memorandum was in form and substance acceptable to the commissioner
and  was  in  support  of  an  opinion  of  a qualified actuary that was
required by laws or regulations of that state to meet standards  adopted
from  time  to time by the Actuarial Standards Board and such additional
standards as the superintendent has prescribed,  the  foreign  or  alien
company need submit the memorandum required by this subparagraph only at
the  request of the superintendent or as the superintendent may by regu-
lation require.
  [(B)] (II) In lieu of preparing a memorandum as required by  ITEM  (I)
OF THIS subparagraph [(A) of this paragraph], a company may increase its
reserves  in the manner provided by the superintendent by regulation. If
a company that has not  so  increased  its  reserves  fails  to  file  a
supporting  memorandum as required by ITEM (I) OF THIS subparagraph [(A)
of this paragraph] or fails to provide a supporting  memorandum  at  the
request of the superintendent within a period specified by regulation or
the superintendent determines that the supporting memorandum provided by
the  company  fails  to meet the standards prescribed by the regulations
[or is otherwise unacceptable to the superintendent], the superintendent
may engage a qualified actuary at the expense of the company  to  review
the  opinion  and  the basis for the opinion and prepare such supporting
memorandum as is required by the superintendent.
  [(4)] (D)  Requirement  for  all  opinions.  Every  opinion  shall  be
governed by the following provisions:
  [(A)]  (I)  The  opinion  shall be submitted with the annual statement
reflecting the valuation of  such  reserve  liabilities  for  each  year
ending on or after December thirty-first, nineteen hundred ninety-four.
  [(B)]  (II) The opinion shall apply to all business in force including
individual and group health  insurance  plans,  in  form  and  substance
acceptable to the superintendent as specified by regulation.
  [(C)]  (III) The opinion shall be based on standards adopted from time
to time by the Actuarial Standards Board and on such  additional  stand-
ards as the superintendent may by regulation prescribe.
  [(D)]  (IV)  In  the  case of an opinion required to be submitted by a
foreign or alien company, the  superintendent  may  accept  the  opinion
submitted  by  that company to the commissioner of a state accredited by
the National Association of Insurance Commissioners if  the  superinten-
dent  determines  that  the  opinion  reasonably  meets the requirements
applicable to a company domiciled in this state.

S. 7168                            23

  [(E)] (V) For the purposes of  this  subsection,  "qualified  actuary"
means a member in good standing of the American Academy of Actuaries who
meets the requirements prescribed by the superintendent by regulation.
  [(F)]  (VI)  Except  in  cases  of  fraud, willful misconduct or gross
negligence, the qualified actuary shall not be liable for damages to any
person (other than the insurance company or the superintendent) for  any
act,  error, omission, decision or conduct with respect to the actuary's
opinion and memorandum. The provisions of this  subparagraph  shall  not
operate to remove, condition or limit any rights, remedies or actions at
law or equity which the insurance company or the superintendent may have
or take against or with respect to the qualified actuary.
  [(G)]  (VII)  Disciplinary  action  by  the superintendent against the
company or the qualified actuary shall be defined in regulations by  the
superintendent.
  [(H)] (VIII) Non-public information (meaning information not otherwise
available  from public documents or records) contained in any memorandum
in support of the opinion, or in any  other  material  provided  by  the
company  to  the  superintendent  in  connection therewith, shall at the
written request of the company be kept confidential by  the  superinten-
dent  and shall not be made public, other than for the purpose of enabl-
ing any person to defend against an action  seeking  damages  from  such
person  by  reason  of  any  action required by this section or by regu-
lations promulgated hereunder; provided, however, that  such  non-public
information  may  otherwise  be released by the superintendent [(i)] (I)
with the written consent of the company or [(ii)] (II) for  the  purpose
of professional disciplinary proceedings conducted by the superintendent
or  by  any professional body, provided that steps deemed appropriate by
the superintendent are taken to preserve  the  confidentiality  of  such
non-public  information.  Notwithstanding the foregoing, the superinten-
dent shall release the non-public information to persons  making  demand
therefor  in  a criminal proceeding pursuant to lawful subpoena, warrant
or court order or in response to a subpoena from  a  grand  jury  served
upon  the superintendent.  Any such request by the company for confiden-
tiality shall designate with reasonable specificity the portion of  such
memorandum  or  other  material with respect to which confidentiality is
requested pursuant to this subparagraph. Once such memorandum  or  other
material,  or  any  portion  thereof  containing matters with respect to
which confidentiality has been requested, is cited by the company in its
marketing or is cited before any governmental agency (other than a state
insurance department) or is released by the company to the  news  media,
all  portions  of  such  memorandum or other material shall be no longer
confidential.
  (2) ACTUARIAL OPINION OF RESERVES AFTER  THE  OPERATIVE  DATE  OF  THE
VALUATION MANUAL.
  (A)  GENERAL. EVERY COMPANY WITH OUTSTANDING LIFE INSURANCE CONTRACTS,
ACCIDENT AND HEALTH INSURANCE CONTRACTS  OR  DEPOSIT-TYPE  CONTRACTS  IN
THIS STATE AND SUBJECT TO REGULATION BY THE SUPERINTENDENT SHALL ANNUAL-
LY  SUBMIT  THE  OPINION  OF  THE  APPOINTED  ACTUARY  AS TO WHETHER THE
RESERVES AND RELATED ACTUARIAL ITEMS HELD IN SUPPORT OF THE POLICIES AND
CONTRACTS ARE COMPUTED APPROPRIATELY,  ARE  BASED  ON  ASSUMPTIONS  THAT
SATISFY  CONTRACTUAL  PROVISIONS,  ARE  CONSISTENT  WITH  PRIOR REPORTED
AMOUNTS AND COMPLY WITH APPLICABLE LAWS OF  THIS  STATE.  THE  VALUATION
MANUAL  WILL PRESCRIBE THE SPECIFICS OF THIS OPINION INCLUDING ANY ITEMS
DEEMED TO BE NECESSARY TO ITS SCOPE.
  (B) ACTUARIAL ANALYSIS OF RESERVES  AND  ASSETS  SUPPORTING  RESERVES.
EVERY  COMPANY  WITH  OUTSTANDING LIFE INSURANCE CONTRACTS, ACCIDENT AND

S. 7168                            24

HEALTH INSURANCE CONTRACTS OR DEPOSIT-TYPE CONTRACTS IN THIS  STATE  AND
SUBJECT  TO  REGULATION BY THE SUPERINTENDENT, EXCEPT AS EXEMPTED IN THE
VALUATION MANUAL, SHALL ALSO ANNUALLY INCLUDE IN THE OPINION REQUIRED BY
SUBPARAGRAPH  (A)  OF  THIS  PARAGRAPH, AN OPINION OF THE SAME APPOINTED
ACTUARY AS TO WHETHER THE RESERVES AND RELATED ACTUARIAL ITEMS  HELD  IN
SUPPORT OF THE POLICIES AND CONTRACTS SPECIFIED IN THE VALUATION MANUAL,
WHEN  CONSIDERED IN LIGHT OF THE ASSETS HELD BY THE COMPANY WITH RESPECT
TO THE RESERVES AND RELATED ACTUARIAL ITEMS, INCLUDING BUT  NOT  LIMITED
TO  THE  INVESTMENT EARNINGS ON THE ASSETS AND THE CONSIDERATIONS ANTIC-
IPATED TO BE RECEIVED AND RETAINED UNDER  THE  POLICIES  AND  CONTRACTS,
MAKE ADEQUATE PROVISION FOR THE COMPANY'S OBLIGATIONS UNDER THE POLICIES
AND  CONTRACTS,  INCLUDING  BUT  NOT  LIMITED  TO THE BENEFITS UNDER AND
EXPENSES ASSOCIATED WITH THE POLICIES AND CONTRACTS.
  (C) REQUIREMENTS FOR OPINION SUBJECT TO SUBPARAGRAPH (B) OF THIS PARA-
GRAPH. EACH OPINION REQUIRED BY SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL
BE GOVERNED BY THE FOLLOWING PROVISIONS:
  (I) A MEMORANDUM, IN FORM AND SUBSTANCE AS SPECIFIED IN THE  VALUATION
MANUAL, SHALL BE PREPARED TO SUPPORT EACH ACTUARIAL OPINION.
  (II) IF THE INSURANCE COMPANY FAILS TO PROVIDE A SUPPORTING MEMORANDUM
AT  THE  REQUEST  OF THE SUPERINTENDENT WITHIN A PERIOD SPECIFIED IN THE
VALUATION MANUAL OR THE SUPERINTENDENT DETERMINES  THAT  THE  SUPPORTING
MEMORANDUM PROVIDED BY THE INSURANCE COMPANY FAILS TO MEET THE STANDARDS
PRESCRIBED  BY  THE  VALUATION  MANUAL,  THE SUPERINTENDENT MAY ENGAGE A
QUALIFIED ACTUARY AT THE EXPENSE OF THE COMPANY TO  REVIEW  THE  OPINION
AND  THE  BASIS  FOR  THE  OPINION AND PREPARE THE SUPPORTING MEMORANDUM
REQUIRED BY THE SUPERINTENDENT.
  (D) REQUIREMENTS FOR ALL OPINIONS SUBJECT TO THIS  PARAGRAPH.    EVERY
OPINION SHALL BE GOVERNED BY THE FOLLOWING PROVISIONS:
  (I)  THE  OPINION  SHALL  BE IN FORM AND SUBSTANCE AS SPECIFIED IN THE
VALUATION MANUAL.
  (II) THE OPINION SHALL BE SUBMITTED WITH THE ANNUAL STATEMENT REFLECT-
ING THE VALUATION OF SUCH RESERVE LIABILITIES FOR EACH YEAR ENDING ON OR
AFTER THE OPERATIVE DATE OF THE VALUATION MANUAL.
  (III) THE OPINION SHALL APPLY TO ALL POLICIES AND CONTRACTS SUBJECT TO
SUBPARAGRAPH (B) OF THIS PARAGRAPH, PLUS OTHER ACTUARIAL LIABILITIES  AS
MAY BE SPECIFIED IN THE VALUATION MANUAL.
  (IV) THE OPINION SHALL BE BASED ON STANDARDS ADOPTED FROM TIME TO TIME
BY  THE  ACTUARIAL  STANDARDS  BOARD OR ITS SUCCESSOR, AND ON SUCH ADDI-
TIONAL STANDARDS AS MAY BE PRESCRIBED IN THE VALUATION MANUAL.
  (V) IN THE CASE OF AN OPINION REQUIRED TO BE SUBMITTED BY A FOREIGN OR
ALIEN COMPANY, THE SUPERINTENDENT MAY ACCEPT THE OPINION FILED  BY  THAT
COMPANY  WITH THE INSURANCE SUPERVISORY OFFICIAL OF ANOTHER STATE IF THE
SUPERINTENDENT DETERMINES THAT THE OPINION REASONABLY MEETS THE REQUIRE-
MENTS APPLICABLE TO A COMPANY DOMICILED IN THIS STATE.
  (VI) EXCEPT IN CASES OF FRAUD OR  WILLFUL  MISCONDUCT,  THE  APPOINTED
ACTUARY  SHALL  NOT  BE LIABLE FOR DAMAGES TO ANY PERSON (OTHER THAN THE
INSURANCE COMPANY AND THE SUPERINTENDENT) FOR ANY ACT, ERROR,  OMISSION,
DECISION OR CONDUCT WITH RESPECT TO THE APPOINTED ACTUARY'S OPINION.
  (VII) DISCIPLINARY ACTION BY THE SUPERINTENDENT AGAINST THE COMPANY OR
THE APPOINTED ACTUARY SHALL BE DEFINED IN REGULATIONS BY THE SUPERINTEN-
DENT.
  S  7.  Paragraph  5 of subsection (f) of section 4217 of the insurance
law, as added by chapter 22 of the laws of 1994, is amended to  read  as
follows:
  (5)  For  purposes  of this subsection, the aggregate minimum standard
required by this section for the valuation of any insurance policies  or

S. 7168                            25

contracts  shall  be  deemed  to include such additional reserves as the
qualified actuary deems necessary, taking into  account  any  transition
rules  provided  by regulation pursuant to ITEM (II) OF subparagraph (B)
of  paragraph  [two]  ONE of subsection (e) of this section, in order to
render the opinion required by subsection (e) of this section  and  such
additional  reserves  as  may  be  necessary  to comply with regulations
promulgated by the superintendent pursuant to this section.
  S 8. Section 4217 of the insurance law is amended by adding  five  new
subsections (g), (h), (i), (j) and (k) to read as follows:
  (G)  VALUATION  MANUAL  FOR  POLICIES ISSUED ON OR AFTER THE OPERATIVE
DATE OF THE VALUATION MANUAL.
  (1) FOR POLICIES ISSUED ON OR AFTER THE OPERATIVE DATE  OF  THE  VALU-
ATION  MANUAL,  THE  STANDARD  PRESCRIBED IN THE VALUATION MANUAL IS THE
MINIMUM STANDARD OF VALUATION REQUIRED UNDER SUBPARAGRAPH (B)  OF  PARA-
GRAPH  TWO  OF  SUBSECTION (A) OF THIS SECTION, EXCEPT AS PROVIDED UNDER
PARAGRAPH FIVE OF THIS SUBSECTION.
  (2) THE OPERATIVE DATE OF THE VALUATION MANUAL IS JANUARY FIRST OF THE
FIRST CALENDAR YEAR FOLLOWING THE FIRST JULY FIRST AS OF  WHICH  ALL  OF
THE FOLLOWING HAVE OCCURRED:
  (A)  THE  VALUATION MANUAL HAS BEEN ADOPTED BY THE NAIC BY AN AFFIRMA-
TIVE VOTE OF AT LEAST FORTY-TWO MEMBERS, OR THREE-FOURTHS OF THE MEMBERS
VOTING, WHICHEVER IS GREATER.
  (B) THE STANDARD VALUATION LAW, AS AMENDED BY THE NAIC IN TWO THOUSAND
NINE,  OR  LEGISLATION  INCLUDING  SUBSTANTIALLY   SIMILAR   TERMS   AND
PROVISIONS,  HAS BEEN ENACTED BY STATES REPRESENTING GREATER THAN SEVEN-
TY-FIVE PERCENT OF THE  DIRECT  PREMIUMS  WRITTEN  AS  REPORTED  IN  THE
FOLLOWING  ANNUAL  STATEMENTS  SUBMITTED  FOR  TWO THOUSAND EIGHT: LIFE,
ACCIDENT AND HEALTH ANNUAL  STATEMENTS;  HEALTH  ANNUAL  STATEMENTS;  OR
FRATERNAL ANNUAL STATEMENTS.
  (C) THE STANDARD VALUATION LAW, AS AMENDED BY THE NAIC IN TWO THOUSAND
NINE,   OR   LEGISLATION   INCLUDING  SUBSTANTIALLY  SIMILAR  TERMS  AND
PROVISIONS, HAS BEEN ENACTED BY AT  LEAST  FORTY-TWO  OF  THE  FOLLOWING
FIFTY-FIVE  JURISDICTIONS: THE FIFTY STATES OF THE UNITED STATES, AMERI-
CAN SAMOA, THE AMERICAN VIRGIN ISLANDS, THE DISTRICT OF COLUMBIA,  GUAM,
AND PUERTO RICO.
  (3)  UNLESS  A CHANGE IN THE VALUATION MANUAL SPECIFIES A LATER EFFEC-
TIVE DATE, CHANGES TO THE VALUATION MANUAL SHALL BE EFFECTIVE ON JANUARY
FIRST FOLLOWING THE DATE WHEN THE CHANGE TO  THE  VALUATION  MANUAL  HAS
BEEN ADOPTED BY THE NAIC BY AN AFFIRMATIVE VOTE REPRESENTING:
  (A)  AT LEAST THREE-FOURTHS OF THE MEMBERS OF THE NAIC VOTING, BUT NOT
LESS THAN A MAJORITY OF THE TOTAL MEMBERSHIP, AND
  (B) MEMBERS OF THE NAIC REPRESENTING  JURISDICTIONS  TOTALING  GREATER
THAN  SEVENTY-FIVE PERCENT OF THE DIRECT PREMIUMS WRITTEN AS REPORTED IN
THE FOLLOWING ANNUAL STATEMENTS MOST RECENTLY  AVAILABLE  PRIOR  TO  THE
VOTE  IN  SUBPARAGRAPH  (A) OF THIS PARAGRAPH: LIFE, ACCIDENT AND HEALTH
ANNUAL STATEMENTS, HEALTH ANNUAL STATEMENTS, OR FRATERNAL ANNUAL  STATE-
MENTS.
  (4) THE VALUATION MANUAL MUST SPECIFY ALL OF THE FOLLOWING:
  (A) MINIMUM VALUATION STANDARDS FOR AND DEFINITIONS OF THE POLICIES OR
CONTRACTS SUBJECT TO SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (A)
OF THIS SECTION. SUCH MINIMUM VALUATION STANDARDS SHALL BE:
  (I)  THE  COMMISSIONERS  RESERVE  VALUATION  METHOD FOR LIFE INSURANCE
CONTRACTS, OTHER THAN ANNUITY CONTRACTS, SUBJECT TO SUBPARAGRAPH (B)  OF
PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION;

S. 7168                            26

  (II)  THE  COMMISSIONERS  ANNUITY RESERVE VALUATION METHOD FOR ANNUITY
CONTRACTS SUBJECT TO SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (A)
OF THIS SECTION; AND
  (III)  MINIMUM RESERVES FOR ALL OTHER POLICIES OR CONTRACTS SUBJECT TO
SUBPARAGRAPH (B) OF PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION.
  (B) WHICH POLICIES OR CONTRACTS OR TYPES OF POLICIES OR CONTRACTS  ARE
SUBJECT  TO THE REQUIREMENTS OF A PRINCIPLE-BASED VALUATION IN PARAGRAPH
ONE OF SUBSECTION (H) OF THIS SECTION AND THE MINIMUM  VALUATION  STAND-
ARDS CONSISTENT WITH THOSE REQUIREMENTS;
  (C)  FOR POLICIES AND CONTRACTS SUBJECT TO A PRINCIPLE-BASED VALUATION
UNDER SUBSECTION (H) OF THIS SECTION:
  (I) REQUIREMENTS FOR THE FORMAT OF REPORTS TO THE SUPERINTENDENT UNDER
SUBPARAGRAPH (C) OF PARAGRAPH TWO OF SUBSECTION (H) OF THIS SECTION  AND
WHICH  SHALL INCLUDE INFORMATION NECESSARY TO DETERMINE IF THE VALUATION
IS APPROPRIATE AND IN COMPLIANCE WITH THIS SECTION;
  (II) ASSUMPTIONS SHALL BE PRESCRIBED FOR RISKS OVER WHICH THE  COMPANY
DOES NOT HAVE SIGNIFICANT CONTROL OR INFLUENCE.
  (III) PROCEDURES FOR CORPORATE GOVERNANCE AND OVERSIGHT OF THE ACTUAR-
IAL  FUNCTION,  AND  A PROCESS FOR APPROPRIATE WAIVER OR MODIFICATION OF
SUCH PROCEDURES.
  (D) FOR POLICIES NOT SUBJECT  TO  A  PRINCIPLE-BASED  VALUATION  UNDER
SUBSECTION  (H)  OF  THIS  SECTION  THE MINIMUM VALUATION STANDARD SHALL
EITHER:
  (I) BE CONSISTENT WITH THE MINIMUM STANDARD OF VALUATION PRIOR TO  THE
OPERATIVE DATE OF THE VALUATION MANUAL; OR
  (II)  DEVELOP  RESERVES THAT QUANTIFY THE BENEFITS AND GUARANTEES, AND
THE FUNDING, ASSOCIATED WITH THE CONTRACTS AND THEIR RISKS AT A LEVEL OF
CONSERVATISM THAT REFLECTS CONDITIONS THAT  INCLUDE  UNFAVORABLE  EVENTS
THAT HAVE A REASONABLE PROBABILITY OF OCCURRING.
  (E)  OTHER REQUIREMENTS, INCLUDING, BUT NOT LIMITED TO, THOSE RELATING
TO RESERVE METHODS, MODELS FOR MEASURING RISK,  GENERATION  OF  ECONOMIC
SCENARIOS,  ASSUMPTIONS,  MARGINS, USE OF COMPANY EXPERIENCE, RISK MEAS-
UREMENT, DISCLOSURE, CERTIFICATIONS,  REPORTS,  ACTUARIAL  OPINIONS  AND
MEMORANDUMS, TRANSITION RULES AND INTERNAL CONTROLS; AND
  (F)  THE  DATA  AND  FORM OF THE DATA REQUIRED UNDER SUBSECTION (I) OF
THIS SECTION, WITH WHOM THE DATA MUST  BE  SUBMITTED,  AND  MAY  SPECIFY
OTHER REQUIREMENTS INCLUDING DATA ANALYSES AND REPORTING OF ANALYSES.
  (5)  IN  THE  ABSENCE OF A SPECIFIC VALUATION, THE COMPANY SHALL, WITH
RESPECT TO SUCH REQUIREMENTS, COMPLY WITH  MINIMUM  VALUATION  STANDARDS
PRESCRIBED BY THE SUPERINTENDENT BY REGULATION.
  (6)  THE SUPERINTENDENT MAY ENGAGE A QUALIFIED ACTUARY, AT THE EXPENSE
OF THE COMPANY, TO PERFORM AN ACTUARIAL EXAMINATION OF THE  COMPANY  AND
OPINE ON THE APPROPRIATENESS OF ANY RESERVE ASSUMPTION OR METHOD USED BY
THE  COMPANY,  OR TO REVIEW AND OPINE ON A COMPANY'S COMPLIANCE WITH ANY
REQUIREMENT SET FORTH IN THIS SECTION. THE SUPERINTENDENT MAY RELY  UPON
THE  OPINION,  REGARDING  PROVISIONS CONTAINED WITHIN THIS SECTION, OF A
QUALIFIED ACTUARY ENGAGED BY THE COMMISSIONER OF ANOTHER STATE, DISTRICT
OR TERRITORY OF THE UNITED STATES. AS USED IN THIS PARAGRAPH,  THE  TERM
"ENGAGE" INCLUDES EMPLOYMENT AND CONTRACTING.
  (H) REQUIREMENTS OF A PRINCIPLE-BASED VALUATION.
  (1)  A  COMPANY  MUST ESTABLISH RESERVES USING A PRINCIPLE-BASED VALU-
ATION THAT MEETS THE FOLLOWING CONDITIONS FOR POLICIES OR  CONTRACTS  AS
SPECIFIED IN THE VALUATION MANUAL:
  (A)  QUANTIFY THE BENEFITS AND GUARANTEES, AND THE FUNDING, ASSOCIATED
WITH THE CONTRACTS AND THEIR RISKS  AT  A  LEVEL  OF  CONSERVATISM  THAT
REFLECTS  CONDITIONS THAT INCLUDE UNFAVORABLE EVENTS THAT HAVE A REASON-

S. 7168                            27

ABLE PROBABILITY OF OCCURRING DURING THE LIFETIME OF THE CONTRACTS.  FOR
POLICIES  OR  CONTRACTS  WITH  SIGNIFICANT TAIL RISK, REFLECT CONDITIONS
APPROPRIATELY ADVERSE TO QUANTIFY THE TAIL RISK.
  (B)  INCORPORATE  ASSUMPTIONS,  RISK  ANALYSIS  METHODS  AND FINANCIAL
MODELS AND MANAGEMENT TECHNIQUES  THAT  ARE  CONSISTENT  WITH,  BUT  NOT
NECESSARILY  IDENTICAL  TO,  THOSE UTILIZED WITHIN THE COMPANY'S OVERALL
RISK ASSESSMENT PROCESS,  WHILE  RECOGNIZING  POTENTIAL  DIFFERENCES  IN
FINANCIAL  REPORTING  STRUCTURES AND ANY PRESCRIBED ASSUMPTIONS OR METH-
ODS.
  (C) INCORPORATE ASSUMPTIONS THAT ARE DERIVED IN ONE OF  THE  FOLLOWING
MANNERS:
  (I) THE ASSUMPTION IS PRESCRIBED IN THE VALUATION MANUAL.
  (II) FOR ASSUMPTIONS THAT ARE NOT PRESCRIBED, THE ASSUMPTIONS SHALL:
  (I)  BE  ESTABLISHED  UTILIZING THE COMPANY'S AVAILABLE EXPERIENCE, TO
THE EXTENT IT IS RELEVANT AND STATISTICALLY CREDIBLE; OR
  (II) TO THE EXTENT THAT COMPANY EXPERIENCE IS NOT AVAILABLE, RELEVANT,
OR STATISTICALLY CREDIBLE,  BE  ESTABLISHED  UTILIZING  OTHER  RELEVANT,
STATISTICALLY CREDIBLE EXPERIENCE.
  (D)  PROVIDE  MARGINS  FOR UNCERTAINTY INCLUDING ADVERSE DEVIATION AND
ESTIMATION ERROR, SUCH THAT THE GREATER THE UNCERTAINTY THE  LARGER  THE
MARGIN AND RESULTING RESERVE.
  (2)  A COMPANY USING A PRINCIPLE-BASED VALUATION FOR ONE OR MORE POLI-
CIES OR CONTRACTS SUBJECT TO THIS SECTION AS SPECIFIED IN THE  VALUATION
MANUAL SHALL:
  (A) ESTABLISH PROCEDURES FOR CORPORATE GOVERNANCE AND OVERSIGHT OF THE
ACTUARIAL  VALUATION  FUNCTION  CONSISTENT  WITH  THOSE DESCRIBED IN THE
VALUATION MANUAL.
  (B) PROVIDE TO THE SUPERINTENDENT AND THE BOARD OF DIRECTORS AN ANNUAL
CERTIFICATION OF THE EFFECTIVENESS OF THE INTERNAL CONTROLS WITH RESPECT
TO THE PRINCIPLE-BASED VALUATION.  SUCH CONTROLS SHALL  BE  DESIGNED  TO
ASSURE  THAT  ALL MATERIAL RISKS INHERENT IN THE LIABILITIES AND ASSOCI-
ATED ASSETS SUBJECT TO SUCH VALUATION ARE INCLUDED IN THE VALUATION, AND
THAT VALUATIONS ARE MADE IN ACCORDANCE WITH THE  VALUATION  MANUAL.  THE
CERTIFICATION  SHALL  BE BASED ON THE CONTROLS IN PLACE AS OF THE END OF
THE PRECEDING CALENDAR YEAR.
  (C) DEVELOP, AND FILE WITH THE SUPERINTENDENT UPON REQUEST, A  PRINCI-
PLE-BASED  VALUATION  REPORT  THAT COMPLIES WITH STANDARDS PRESCRIBED IN
THE VALUATION MANUAL.
  (3) A PRINCIPLE-BASED VALUATION MAY  INCLUDE  A  PRESCRIBED  FORMULAIC
RESERVE COMPONENT.
  (I)  EXPERIENCE REPORTING FOR POLICIES IN FORCE ON OR AFTER THE OPERA-
TIVE DATE OF THE VALUATION MANUAL.
  A COMPANY SHALL SUBMIT MORTALITY, MORBIDITY, POLICYHOLDER BEHAVIOR, OR
EXPENSE EXPERIENCE AND OTHER DATA AS PRESCRIBED IN THE VALUATION MANUAL.
  (J) CONFIDENTIALITY.
  (1) FOR PURPOSES OF THIS SUBSECTION, "CONFIDENTIAL INFORMATION"  SHALL
MEAN:
  (A)  A  MEMORANDUM IN SUPPORT OF AN OPINION SUBMITTED UNDER SUBSECTION
(E) OF THIS SECTION AND ANY OTHER DOCUMENTS, MATERIALS AND OTHER  INFOR-
MATION,  INCLUDING,  BUT  NOT LIMITED TO, ALL WORKING PAPERS, AND COPIES
THEREOF, CREATED, PRODUCED OR OBTAINED BY OR  DISCLOSED  TO  THE  SUPER-
INTENDENT OR ANY OTHER PERSON IN CONNECTION WITH SUCH MEMORANDUM;
  (B) ALL DOCUMENTS, MATERIALS AND OTHER INFORMATION, INCLUDING, BUT NOT
LIMITED TO, ALL WORKING PAPERS, AND COPIES THEREOF, CREATED, PRODUCED OR
OBTAINED  BY  OR  DISCLOSED TO THE SUPERINTENDENT OR ANY OTHER PERSON IN
THE COURSE OF AN EXAMINATION MADE UNDER PARAGRAPH SIX OF SUBSECTION  (G)

S. 7168                            28

OF  THIS  SECTION;  PROVIDED,  HOWEVER, THAT IF AN EXAMINATION REPORT OR
OTHER MATERIAL PREPARED IN CONNECTION WITH  AN  EXAMINATION  MADE  UNDER
SECTION  THREE  HUNDRED  NINE OF THIS CHAPTER IS NOT HELD AS PRIVATE AND
CONFIDENTIAL  INFORMATION UNDER SECTION THREE HUNDRED NINE OF THIS CHAP-
TER, AN EXAMINATION REPORT OR OTHER MATERIAL PREPARED IN CONNECTION WITH
AN EXAMINATION MADE UNDER  PARAGRAPH  SIX  OF  SUBSECTION  (G)  OF  THIS
SECTION SHALL NOT BE "CONFIDENTIAL INFORMATION" TO THE SAME EXTENT AS IF
SUCH  EXAMINATION  REPORT  OR  OTHER  MATERIAL  HAD  BEEN PREPARED UNDER
SECTION THREE HUNDRED NINE OF THIS CHAPTER;
  (C) ANY REPORTS, DOCUMENTS, MATERIALS AND OTHER INFORMATION  DEVELOPED
BY  A  COMPANY  IN  SUPPORT OF, OR IN CONNECTION WITH, AN ANNUAL CERTIF-
ICATION BY THE COMPANY  UNDER  SUBPARAGRAPH  (B)  OF  PARAGRAPH  TWO  OF
SUBSECTION  (H)  OF  THIS  SECTION  EVALUATING  THE EFFECTIVENESS OF THE
COMPANY'S INTERNAL CONTROLS WITH RESPECT TO A PRINCIPLE-BASED  VALUATION
AND ANY OTHER DOCUMENTS, MATERIALS AND OTHER INFORMATION, INCLUDING, BUT
NOT  LIMITED  TO,  ALL  WORKING  PAPERS,  AND  COPIES  THEREOF, CREATED,
PRODUCED OR OBTAINED BY OR DISCLOSED TO THE SUPERINTENDENT OR ANY  OTHER
PERSON  IN  CONNECTION WITH SUCH REPORTS, DOCUMENTS, MATERIALS AND OTHER
INFORMATION;
  (D) ANY PRINCIPLE-BASED VALUATION REPORT DEVELOPED UNDER  SUBPARAGRAPH
(C)  OF  PARAGRAPH  TWO  OF SUBSECTION (H) OF THIS SECTION AND ANY OTHER
DOCUMENTS, MATERIALS AND OTHER INFORMATION, INCLUDING, BUT  NOT  LIMITED
TO,  ALL  WORKING  PAPERS,  AND  COPIES  THEREOF,  CREATED,  PRODUCED OR
OBTAINED BY OR DISCLOSED TO THE SUPERINTENDENT OR ANY  OTHER  PERSON  IN
CONNECTION WITH SUCH REPORT; AND
  (E)  ANY DOCUMENTS, MATERIALS, DATA AND OTHER INFORMATION SUBMITTED BY
A COMPANY UNDER SUBSECTION (I) OF THIS SECTION  (COLLECTIVELY,  "EXPERI-
ENCE  DATA") AND ANY OTHER DOCUMENTS, MATERIALS, DATA AND OTHER INFORMA-
TION, INCLUDING, BUT NOT LIMITED TO,  ALL  WORKING  PAPERS,  AND  COPIES
THEREOF, CREATED OR PRODUCED IN CONNECTION WITH SUCH EXPERIENCE DATA, IN
EACH CASE THAT INCLUDE ANY POTENTIALLY COMPANY-IDENTIFYING OR PERSONALLY
IDENTIFIABLE  INFORMATION, THAT IS PROVIDED TO OR OBTAINED BY THE SUPER-
INTENDENT (TOGETHER WITH ANY "EXPERIENCE DATA", THE "EXPERIENCE  MATERI-
ALS")  AND  ANY  OTHER DOCUMENTS, MATERIALS, DATA AND OTHER INFORMATION,
INCLUDING, BUT NOT LIMITED TO, ALL WORKING PAPERS, AND  COPIES  THEREOF,
CREATED,  PRODUCED  OR OBTAINED BY OR DISCLOSED TO THE SUPERINTENDENT OR
ANY OTHER PERSON IN CONNECTION WITH SUCH EXPERIENCE MATERIALS.
  (2) PRIVILEGE FOR, AND CONFIDENTIALITY OF, CONFIDENTIAL INFORMATION.
  (A) EXCEPT AS PROVIDED IN THIS SUBSECTION,  A  COMPANY'S  CONFIDENTIAL
INFORMATION  IS  CONFIDENTIAL  BY  LAW  AND PRIVILEGED, AND SHALL NOT BE
SUBJECT TO ARTICLE SIX OF THE PUBLIC OFFICERS LAW, SHALL NOT BE  SUBJECT
TO  SUBPOENA  AND  SHALL  NOT  BE  SUBJECT TO DISCOVERY OR ADMISSIBLE IN
EVIDENCE IN ANY PRIVATE CIVIL ACTION; PROVIDED, HOWEVER, THAT THE SUPER-
INTENDENT IS AUTHORIZED TO  USE  THE  CONFIDENTIAL  INFORMATION  IN  THE
FURTHERANCE OF ANY REGULATORY OR LEGAL ACTION BROUGHT AGAINST THE COMPA-
NY AS A PART OF THE SUPERINTENDENT'S OFFICIAL DUTIES.
  (B)  NEITHER  THE SUPERINTENDENT NOR ANY PERSON WHO RECEIVED CONFIDEN-
TIAL INFORMATION WHILE ACTING UNDER THE AUTHORITY OF THE  SUPERINTENDENT
SHALL  BE  PERMITTED  OR REQUIRED TO TESTIFY IN ANY PRIVATE CIVIL ACTION
CONCERNING ANY CONFIDENTIAL INFORMATION.
  (C) IN ORDER TO ASSIST IN  THE  PERFORMANCE  OF  THE  SUPERINTENDENT'S
DUTIES,  THE  SUPERINTENDENT MAY SHARE CONFIDENTIAL INFORMATION (I) WITH
OTHER STATE, FEDERAL AND INTERNATIONAL REGULATORY AGENCIES AND WITH  THE
NAIC  AND ITS AFFILIATES AND SUBSIDIARIES AND (II) IN THE CASE OF CONFI-
DENTIAL INFORMATION SPECIFIED IN SUBPARAGRAPHS (A) AND (D) OF  PARAGRAPH
ONE OF THIS SUBSECTION ONLY, WITH THE ACTUARIAL BOARD FOR COUNSELING AND

S. 7168                            29

DISCIPLINE  OR  ITS SUCCESSOR UPON REQUEST STATING THAT THE CONFIDENTIAL
INFORMATION IS REQUIRED FOR THE  PURPOSE  OF  PROFESSIONAL  DISCIPLINARY
PROCEEDINGS  AND  WITH  STATE, FEDERAL AND INTERNATIONAL LAW ENFORCEMENT
OFFICIALS;  IN  THE  CASE  OF  ITEMS  (I) AND (II) OF THIS SUBPARAGRAPH,
PROVIDED THAT SUCH RECIPIENT AGREES, AND  HAS  THE  LEGAL  AUTHORITY  TO
AGREE,  TO  MAINTAIN  THE  CONFIDENTIALITY AND PRIVILEGED STATUS OF SUCH
DOCUMENTS, MATERIALS, DATA AND OTHER INFORMATION IN THE SAME MANNER  AND
TO THE SAME EXTENT AS REQUIRED FOR THE SUPERINTENDENT.
  (D)  THE  SUPERINTENDENT  MAY  RECEIVE  DOCUMENTS, MATERIALS, DATA AND
OTHER INFORMATION, INCLUDING OTHERWISE CONFIDENTIAL AND PRIVILEGED DOCU-
MENTS, MATERIALS, DATA OR INFORMATION, FROM THE NAIC AND ITS  AFFILIATES
AND  SUBSIDIARIES, FROM REGULATORY OR LAW ENFORCEMENT OFFICIALS OF OTHER
FOREIGN OR DOMESTIC JURISDICTIONS AND FROM THE ACTUARIAL BOARD FOR COUN-
SELING AND DISCIPLINE OR ITS SUCCESSOR AND SHALL MAINTAIN  AS  CONFIDEN-
TIAL  OR  PRIVILEGED  ANY  DOCUMENT, MATERIAL, DATA OR OTHER INFORMATION
RECEIVED WITH NOTICE OR THE UNDERSTANDING THAT  IT  IS  CONFIDENTIAL  OR
PRIVILEGED  UNDER THE LAWS OF THE JURISDICTION THAT IS THE SOURCE OF THE
DOCUMENT, MATERIAL OR OTHER INFORMATION.
  (E) THE SUPERINTENDENT MAY ENTER INTO AGREEMENTS GOVERNING SHARING AND
USE OF INFORMATION CONSISTENT WITH THIS PARAGRAPH.
  (F) NO WAIVER OF ANY APPLICABLE PRIVILEGE OR CLAIM OF  CONFIDENTIALITY
IN THE CONFIDENTIAL INFORMATION SHALL OCCUR AS A RESULT OF DISCLOSURE TO
THE  SUPERINTENDENT  UNDER  THIS  SECTION  OR  AS A RESULT OF SHARING AS
AUTHORIZED IN SUBPARAGRAPH (C) OF THIS PARAGRAPH.
  (G) A PRIVILEGE ESTABLISHED UNDER THE LAW OF ANY STATE OR JURISDICTION
THAT IS SUBSTANTIALLY SIMILAR TO THE PRIVILEGE  ESTABLISHED  UNDER  THIS
PARAGRAPH  SHALL  BE AVAILABLE AND ENFORCED IN ANY PROCEEDING IN, AND IN
ANY COURT OF, THIS STATE.
  (H) IN THIS SUBSECTION, THE TERMS "REGULATORY AGENCY,"  "LAW  ENFORCE-
MENT  AGENCY"  AND  THE  "NAIC"  INCLUDE,  BUT ARE NOT LIMITED TO, THEIR
EMPLOYEES, AGENTS, CONSULTANTS AND CONTRACTORS.
  (3) NOTWITHSTANDING PARAGRAPH TWO OF THIS SUBSECTION, ANY CONFIDENTIAL
INFORMATION SPECIFIED IN SUBPARAGRAPHS (A) AND (D) OF PARAGRAPH  ONE  OF
THIS SUBSECTION:
  (A)  MAY BE SUBJECT TO SUBPOENA FOR THE PURPOSE OF DEFENDING AN ACTION
SEEKING DAMAGES FROM THE QUALIFIED OR APPOINTED ACTUARY  SUBMITTING  THE
RELATED  MEMORANDUM  IN SUPPORT OF AN OPINION SUBMITTED UNDER SUBSECTION
(E) OF THIS SECTION OR FROM THE APPOINTED ACTUARY SUBMITTING THE PRINCI-
PLE-BASED VALUATION REPORT DEVELOPED UNDER SUBPARAGRAPH (C) OF PARAGRAPH
TWO OF SUBSECTION (H) OF THIS SECTION BY REASON OF AN ACTION REQUIRED BY
THIS SECTION OR BY REGULATIONS PROMULGATED HEREUNDER;
  (B) MAY OTHERWISE BE RELEASED BY THE SUPERINTENDENT WITH  THE  WRITTEN
CONSENT OF THE COMPANY; AND
  (C)  ONCE ANY PORTION OF A MEMORANDUM IN SUPPORT OF AN OPINION SUBMIT-
TED UNDER SUBSECTION (E) OF THIS SECTION OR A PRINCIPLE-BASED  VALUATION
REPORT  DEVELOPED  UNDER SUBPARAGRAPH (C) OF PARAGRAPH TWO OF SUBSECTION
(H) OF THIS SECTION IS CITED BY THE  COMPANY  IN  ITS  MARKETING  OR  IS
PUBLICLY  VOLUNTEERED  TO  OR  BEFORE A GOVERNMENTAL AGENCY OTHER THAN A
STATE INSURANCE DEPARTMENT OR IS RELEASED BY THE  COMPANY  TO  THE  NEWS
MEDIA,  ALL  PORTIONS  OF  SUCH  MEMORANDUM OR REPORT SHALL NO LONGER BE
CONFIDENTIAL.
  (K) SINGLE STATE EXEMPTION.
  (1) THE SUPERINTENDENT MAY EXEMPT SPECIFIC PRODUCT  FORMS  OR  PRODUCT
LINES  OF A DOMESTIC COMPANY THAT IS LICENSED AND DOING BUSINESS ONLY IN
NEW YORK FROM  THE  REQUIREMENTS  OF  SUBSECTION  (G)  OF  THIS  SECTION
PROVIDED:

S. 7168                            30

  (A)  THE  SUPERINTENDENT  HAS  ISSUED  AN  EXEMPTION IN WRITING TO THE
COMPANY AND HAS NOT SUBSEQUENTLY REVOKED THE EXEMPTION IN WRITING; AND
  (B)  THE  COMPANY COMPUTES RESERVES USING ASSUMPTIONS AND METHODS USED
PRIOR TO THE OPERATIVE DATE OF THE VALUATION MANUAL IN ADDITION  TO  ANY
REQUIREMENTS  ESTABLISHED BY THE SUPERINTENDENT AND PROMULGATED BY REGU-
LATION.
  (2) FOR ANY  COMPANY  GRANTED  AN  EXEMPTION  UNDER  THIS  SUBSECTION,
SUBSECTIONS (C), (D), (E) AND (F) OF THIS SECTION AND SECTION FOUR THOU-
SAND  TWO  HUNDRED  EIGHTEEN  OF  THIS ARTICLE SHALL BE APPLICABLE. WITH
RESPECT TO ANY COMPANY APPLYING FOR THIS  EXEMPTION,  ANY  REFERENCE  TO
SUBSECTION  (G)  FOUND  IN  SUBSECTIONS  (C),  (D),  (E) AND (F) OF THIS
SECTION AND SECTION FOUR THOUSAND TWO HUNDRED EIGHTEEN OF  THIS  ARTICLE
SHALL NOT BE APPLICABLE.
  S  9.  Paragraph  1 of subsection (a) of section 4218 of the insurance
law is amended to read as follows:
  (1) When the actual premium or consideration charged for  life  insur-
ance  under  any  life  insurance policy, issued by any [life insurance]
company doing business in this state, is  less  than  the  modified  net
premium  calculated  on the basis of the commissioners reserve valuation
method as defined in paragraph six of subsection  (c)  of  section  four
thousand  two  hundred  seventeen  of this article and using the rate of
interest and mortality tables contained in the minimum valuation  stand-
ards  in  paragraphs  two and four of such subsection, or in the case of
future renewals under a renewable term insurance policy issued prior  to
the  operative  date  of  subsection  (k)  of  section four thousand two
hundred twenty-one of this  article,  the  Modern  CSO  Mortality  Table
published  in  the  Transactions of the Society of Actuaries, Vol. XXVII
(1975), the minimum reserve required for such policy shall be the great-
er of either the reserve calculated according to  the  mortality  table,
rate  of  interest,  and  method  actually  used for such policy, or the
reserve calculated by the  commissioners  reserve  valuation  method  as
defined  in paragraph six of subsection (c) of section four thousand two
hundred seventeen of this article and using the mortality table and rate
of interest prescribed in this section for calculating the commissioners
reserve valuation method modified net premium and replacing  such  modi-
fied  net  premium  by the actual premium charged for the policy in each
contract year for which such modified net  premium  exceeds  the  actual
premium.
  S  10.  Paragraph  1, item (vi) of subparagraph (B) of paragraph 9 and
paragraph 10 of subsection (k) of section 4221  of  the  insurance  law,
paragraph  10 as amended by chapter 302 of the laws of 1987, are amended
to read as follows:
  (1) This subsection shall apply to all policies issued on or after the
operative date as defined in this subsection. THE TERM  "OPERATIVE  DATE
OF  THE  VALUATION  MANUAL",  AS  USED IN THIS SUBSECTION, MEANS JANUARY
FIRST OF THE FIRST CALENDAR YEAR THAT THE VALUATION MANUAL AS DEFINED IN
SECTION FOUR THOUSAND TWO HUNDRED SEVENTEEN OF THIS  ARTICLE  IS  EFFEC-
TIVE.
  (vi)  [Any] (I) FOR POLICIES ISSUED PRIOR TO THE OPERATIVE DATE OF THE
VALUATION MANUAL, ANY COMMISSIONERS STANDARD ordinary mortality  tables,
adopted  after  nineteen  hundred  eighty by the National Association of
Insurance Commissioners (or any modifications thereof for any  specified
class  or classes of risks), that are approved by the superintendent for
use in determining the minimum nonforfeiture standard may be substituted
for the Commissioners 1980 Standard Ordinary  Mortality  Table  with  or

S. 7168                            31

without  Ten-Year Select Mortality Factors or for the Commissioners 1980
Extended Term Insurance Table.
  (II)  FOR  POLICIES ISSUED ON OR AFTER THE OPERATIVE DATE OF THE VALU-
ATION MANUAL, THE VALUATION MANUAL SHALL PROVIDE THE COMMISSIONERS STAN-
DARD MORTALITY TABLE FOR USE IN DETERMINING  THE  MINIMUM  NONFORFEITURE
STANDARD  THAT  MAY  BE  SUBSTITUTED FOR THE COMMISSIONERS 1980 STANDARD
ORDINARY MORTALITY TABLE (OR ANY MODIFICATIONS THEREOF FOR ANY SPECIFIED
CLASS OR CLASSES OF RISKS) WITH OR  WITHOUT  TEN-YEAR  SELECT  MORTALITY
FACTORS  OR FOR THE COMMISSIONERS 1980 EXTENDED TERM INSURANCE TABLE. IF
THE SUPERINTENDENT APPROVES BY  REGULATION  ANY  COMMISSIONERS  STANDARD
ORDINARY  MORTALITY  TABLE ADOPTED BY THE NATIONAL ASSOCIATION OF INSUR-
ANCE COMMISSIONERS (OR ANY MODIFICATIONS THEREOF FOR ANY SPECIFIED CLASS
OR CLASSES OF RISKS) FOR USE IN DETERMINING  THE  MINIMUM  NONFORFEITURE
STANDARD FOR POLICIES ISSUED ON OR AFTER THE OPERATIVE DATE OF THE VALU-
ATION  MANUAL  THEN  THAT  MINIMUM NONFORFEITURE STANDARD SUPERSEDES THE
MINIMUM NONFORFEITURE STANDARD PROVIDED BY THE VALUATION MANUAL.
  (10) The NONFORFEITURE INTEREST RATE IS DEFINED BELOW:
  (A) FOR POLICIES ISSUED PRIOR TO THE OPERATIVE DATE OF  THE  VALUATION
MANUAL,  THE nonforfeiture interest rate per annum for any policy issued
in a particular calendar year shall be equal to one hundred and  twenty-
five  percent of the calendar year statutory valuation interest rate for
such policy as defined in section four thousand two hundred seventeen of
this article rounded to the nearer one quarter of one percent, PROVIDED,
HOWEVER, THAT THE NONFORFEITURE INTEREST RATE SHALL  NOT  BE  LESS  THAN
FOUR  PERCENT.  THE  NONFORFEITURE INTEREST RATE SHALL BE computed, with
respect to a single premium life insurance policy of the  kind  referred
to  in item (vi) of subparagraph (B) of paragraph four of subsection (c)
of such section, on a year of issue basis by using a reference  interest
rate  defined  for such policy in subparagraph (F) of such paragraph for
the year immediately preceding the year of issue on the assumption  that
the  company  has  submitted  an  opinion  and  memorandum,  in form and
substance satisfactory to the superintendent,  of  a  qualified  actuary
with  respect  to such single premium life insurance policies in accord-
ance with item (vi) of subparagraph (B) of such paragraph.
  (B) FOR POLICIES ISSUED ON AND AFTER THE OPERATIVE DATE OF  THE  VALU-
ATION  MANUAL  THE  NONFORFEITURE INTEREST RATE PER ANNUM FOR ANY POLICY
ISSUED IN A PARTICULAR CALENDAR YEAR SHALL BE PROVIDED BY THE  VALUATION
MANUAL.
  S 11. Item (iv) of subparagraph (A) of paragraph 3 of subsection (n-1)
of  section  4221  of  the insurance law, as added by chapter 365 of the
laws of 1986, is amended to read as follows:
  (iv) A policy meeting the requirements of this subparagraph if  issued
before  the  operative  date  of  subsection (k) of this section may not
impose mortality charges in excess of those based on  the  commissioners
1958  standard  ordinary  mortality  table  in  the  case  of a standard
medically underwritten insured or the commissioners 1958  extended  term
insurance table in the case of any other standard insured, and if issued
on  or  after  such  operative  date may not impose mortality charges in
excess of those  based  on  the  commissioners  1980  standard  ordinary
mortality table in the case of a standard medically underwritten insured
or  the  commissioners 1980 extended term insurance table in the case of
any other standard insured. At the option of the company, maximum charg-
es based on the commissioners 1980 standard ordinary mortality table may
be computed using ten-year select mortality factors. Maximum charges may
also be based on any other table (or modification thereof for the speci-
fied class of risk) PROVIDED BY THE VALUATION MANUAL OR approved by  the

S. 7168                            32

superintendent  pursuant  to  item (vi) of subparagraph (B) of paragraph
nine of subsection (k) of  this  section.  For  insurance  issued  on  a
substandard  basis,  such  charges may be based on appropriate modifica-
tions of such tables.
  S 12. This act shall take effect immediately.

                                 PART C

  Section 1. Section 7120 of the insurance law, as amended by chapter 48
of the laws of 2009, is amended to read as follows:
  S  7120.  Redomestication  of [foreign] insurance companies. (a) Defi-
nitions.  In this section:
  (1) "Redomestication" means the transfer to this state of  the  corpo-
rate domicile of an authorized foreign company OR THE TRANSFER FROM THIS
STATE  OF  THE CORPORATE DOMICILE OF A DOMESTIC COMPANY, as provided for
in this section.
  (2) "Transferring company"  means  any  authorized  [foreign]  company
seeking redomestication.
  (b) A transferring company TRANSFERRING TO THIS STATE shall:
  (1)  file  with  the  superintendent  a  certificate  in  such form as
prescribed by the superintendent signed  by  the  insurance  supervisory
official  of  the  state  where  such  transferring company is domiciled
approving the proposed redomestication and confirming that upon redomes-
tication the transferring company shall no longer be subject as a domes-
tic company to the requirements of its current state of domicile;
  (2) comply with the applicable requirements of this chapter  regarding
the organization and licensing of a domestic company of the same type;
  (3)  demonstrate  to  the satisfaction of the superintendent that upon
redomestication, the transferring company will be in compliance with the
requirements of this chapter and any regulations promulgated  thereunder
applicable to a domestic company of the same type;
  (4)  submit  to the superintendent all documents and filings necessary
to comply with paragraphs two and three of this subsection; and
  (5) submit new policy forms to the superintendent for use after  redo-
mestication, if so ordered by the superintendent, or use existing policy
forms with appropriate endorsements if allowed by, and under such condi-
tions as approved by, the superintendent.
  (c) A TRANSFERRING COMPANY TRANSFERRING FROM THIS STATE:
  (1)  UPON THE APPROVAL OF THE SUPERINTENDENT, TRANSFER ITS DOMICILE TO
ANY OTHER STATE IN WHICH IT IS ADMITTED  TO  TRANSACT  THE  BUSINESS  OF
INSURANCE,  AND  UPON  SUCH  A  TRANSFER IT SHALL CEASE TO BE A DOMESTIC
COMPANY, AND SHALL BE AUTHORIZED IN  THIS  STATE,  IF  QUALIFIED,  AS  A
FOREIGN INSURER. THE SUPERINTENDENT SHALL APPROVE THE TRANSFER UNLESS HE
OR SHE DETERMINES THE TRANSFER IS NOT IN THE INTEREST OF THE POLICYHOLD-
ERS OF THIS STATE; AND
  (2)  MAY CONTINUE ISSUING POLICY FORMS APPROVED BEFORE REDOMESTICATION
PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED ONE OF THIS CHAPTER  WITH
SUCH  ENDORSEMENT, IF ANY, AS THE SUPERINTENDENT DETERMINES IS NEEDED TO
REFLECT THE REDOMESTICATION.
  (D) After the transferring company has complied with the provisions of
this section, the superintendent may, in  accordance  with  section  one
thousand  one  hundred  two  of  this chapter issue a new license to the
transferring company to reflect the change in  its  state  of  corporate
domicile.  The  duration of its license shall be governed by section one
thousand one hundred three of this chapter. Upon issuance  of  such  new
license  the redomestication shall become effective and the transferring

S. 7168                            33

company  shall  be  a  domestic  company  OR  A  FOREIGN   COMPANY,   AS
APPROPRIATE.
  [(d)] (E) Simultaneous with the redomestication taking effect:
  (1) all materials and documents that were submitted to the superinten-
dent  by  the  transferring company pursuant to the requirements of this
section shall be filed in the office of the  superintendent  SUBJECT  TO
SUBSECTION (H) OF THIS SECTION; and
  (2)  FOR A TRANSFERRING COMPANY TRANSFERRING TO THIS STATE, the super-
intendent shall, in accordance with section one thousand two hundred one
or other applicable provisions of this chapter issue to  the  company  a
certified  copy  of its new declaration and charter and a certificate of
incorporation. The new charter  of  the  company  may  provide  for  the
continuation  of the corporate existence of the transferring company and
in such case the original date  of  incorporation  of  the  transferring
company shall be the date of incorporation of the new domestic company.
  [(e)]  (F)  All  outstanding  insurance  policies  and contracts shall
remain in full force and effect with no change and need not be  endorsed
as  to  the  new name of the company, if any, or its new location unless
ordered by the superintendent.
  [(f)] (G) All agents' appointments  and  licenses,  rates,  and  other
items that the superintendent allows, existing at the time of redomesti-
cation,  shall  continue  in  full  force  and effect in accordance with
applicable provisions of this chapter.
  (H) THE SUPERINTENDENT SHALL KEEP THE CONTENTS OF ANY REPORT OR INFOR-
MATION THE SUPERINTENDENT REQUIRES PURSUANT TO THIS SECTION, AND THAT IS
NOT OTHERWISE REQUIRED TO BE SET FORTH IN A PUBLICLY AVAILABLE REPORT OR
FILING, CONFIDENTIAL IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION (C)
OF SECTION ONE THOUSAND FIVE HUNDRED FOUR OF THIS CHAPTER.
  S 2. This act shall take effect immediately.

                                 PART D

  Section 1. The section heading and subsections (a),  (b)  and  (c)  of
section  2123 of the insurance law, subsection (a) as amended by section
37-a of part D of chapter 56 of the laws of 2013,  subsections  (b)  and
(c)  as  amended by chapter 540 of the laws of 1996, are amended to read
as follows:
  Misrepresentations[,]  AND  misleading  statements   [and   incomplete
comparisons].
  (a)  (1)  No  agent or representative of any insurer or health mainte-
nance organization authorized  to  transact  life,  accident  or  health
insurance  or  health  maintenance  organization business in this state,
insurance broker, person who has received a  grant  from  and  has  been
certified by the health benefit exchange established pursuant to section
1311  of the Affordable Care Act, 42 U.S.C. S 18031, to act as a naviga-
tor, including any person employed by a certified  navigator,  or  other
person,  firm,  association  or corporation, shall issue or circulate or
cause or permit to be issued or circulated, any illustration,  circular,
statement  or  memorandum  misrepresenting the terms, benefits or advan-
tages of any policy or contract of life, accident or  health  insurance,
any  annuity  contract  or any health maintenance organization contract,
delivered or issued for delivery or to be delivered or issued for deliv-
ery, in this state, or shall make any  misleading  estimate  as  to  the
dividends  or  share  of surplus or additional amounts to be received in
the future on such policy or  contract,  or  shall  make  any  false  or
misleading  statement  as  to the dividends or share of surplus or addi-

S. 7168                            34

tional amounts previously paid by any such insurer or health maintenance
organization on  similar  policies  or  contracts,  or  shall  make  any
misleading representation, or any misrepresentation, as to the financial
condition  of any such insurer or health maintenance organization, or as
to the legal reserve system upon which such insurer  or  health  mainte-
nance organization operates.
  (2) No such person, firm, association or corporation shall make to any
person  or  persons  any incomplete [comparison] OR MISLEADING REPRESEN-
TATION of any such policies or contracts of any  insurer,  insurers,  or
health maintenance organization, for the purpose of inducing, or tending
to  induce,  such  person  or persons to lapse, forfeit or surrender any
insurance policy or health maintenance organization contract.
  (3) Any replacement of individual life insurance policies or  individ-
ual  annuity  contracts of an insurer by an agent, representative of the
same or different insurer or broker shall conform to  standards  promul-
gated  by  regulation  by  the  superintendent. Such regulation shall BE
CONSISTENT, TO THE GREATEST EXTENT PRACTICABLE AND IN THE PUBLIC  INTER-
EST,  WITH  THE  REPLACEMENTS REGULATION ADOPTED BY THE NATIONAL ASSOCI-
ATION OF INSURANCE COMMISSIONERS, AS AMENDED  FROM  TIME  TO  TIME,  AND
SHALL ALSO:
  (A) specify what constitutes the replacement of a life insurance poli-
cy or annuity contract and the proper disclosure and notification proce-
dures to replace a policy or contract;
  (B)  require  notification  of the proposed replacement to the insurer
whose policies or contracts are intended to be replaced; AND
  (C) [require the timely exchange of illustrative and cost  information
required  by section three thousand two hundred nine of this chapter and
necessary for completion of a comparison of the  proposed  and  replaced
coverage; and
  (D)] provide for a sixty-day period following issuance of the replace-
ment policies or contracts during which the policy or contract owner may
return  the policies or contracts and reinstate the replaced policies or
contracts.
  (b) [Any comparison of the policies or contracts of any such  insurer,
insurers  or  health  maintenance  organization shall be deemed to be an
incomplete comparison if it does not conform to all the requirements for
comparisons established by regulation.
  (c)] In the determination, judicial or otherwise, of  the  incomplete-
ness or misleading character of any such [comparison] REPRESENTATION, it
shall  not  be  presumed  that  the  insured knew or knows of any of the
provisions, terms or benefits  contained  in  any  insurance  policy  or
health maintenance organization contract.
  S  2.  The section heading and subsections (a), (b) and (c) of section
4226 of the insurance law, paragraph 6 of subsection  (a)  as  added  by
chapter 616 of the laws of 1997, are amended to read as follows:
  Misrepresentations[,]   AND   misleading  statements  [and  incomplete
comparisons] by insurers. (a) No insurer authorized to do in this  state
the business of life, or accident and health insurance, or to make annu-
ity contracts shall:
  (1)  issue or circulate, or cause or permit to be issued or circulated
on its behalf,  any  illustration,  circular,  statement  or  memorandum
misrepresenting the terms, benefits or advantages of any of its policies
or contracts;
  (2)  make  any  estimate of the dividends or share of surplus or addi-
tional amounts to be received on such policies or contracts;

S. 7168                            35

  (3) make any false or misleading statement of the dividends  or  share
of  surplus  or  additional  amounts paid by any such insurer on similar
policies or contracts;
  (4)  make  any  misleading representation, or any misrepresentation of
the financial condition of any such insurer  or  of  the  legal  reserve
system upon which it operates; [or]
  (5)  make  or deliver to any person or persons any incomplete [compar-
ison of] OR MISLEADING REPRESENTATION REGARDING  any  such  policies  or
contracts for the purpose of inducing, or tending to induce, such person
or  persons  to  lapse,  forfeit  or  surrender  any insurance policy or
contract[.]; OR
  (6) replace the individual life insurance policies or individual annu-
ity contracts of an insurer by the same  or  different  insurer  without
conforming to the standards promulgated by regulation by the superinten-
dent.  Such regulation shall BE CONSISTENT, TO THE GREATEST EXTENT PRAC-
TICABLE AND IN THE PUBLIC INTEREST,  WITH  THE  REPLACEMENTS  REGULATION
ADOPTED  BY  THE  NATIONAL  ASSOCIATION  OF  INSURANCE COMMISSIONERS, AS
AMENDED FROM TIME TO TIME, AND SHALL ALSO:
  (A) specify what constitutes the replacement of a life insurance poli-
cy or annuity contract and the proper disclosure and notification proce-
dures to replace a policy or contract;
  (B) require notification of the proposed replacement  to  the  insurer
whose policies or contracts are intended to be replaced; AND
  (C)  [require the timely exchange of illustrative and cost information
required by section three thousand two hundred nine of this chapter  and
necessary  for  completion  of a comparison of the proposed and replaced
coverage; and
  (D)] provide for a sixty-day period following issuance of the replace-
ment policies or contracts during which the policy or contract owner may
return the policies or contracts and reinstate the replaced policies  or
contracts.
  (b)  [Any  comparison of the policies or contracts of any such insurer
or insurers shall be deemed to be an incomplete comparison  if  it  does
not  conform  to all the requirements for comparisons established by the
superintendent by regulation.
  (c)] In any determination, judicial or otherwise, of  the  incomplete-
ness  or  misleading  character of any such [comparison or of] represen-
tation, it shall not be presumed that the insured knew or knows  of  any
of  the  provisions  or  benefits  contained  in any insurance policy or
contract.
  S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

                                 PART E

  Section 1. Subsection (a) of section 110  of  the  insurance  law,  as
amended  by  chapter  238  of  the  laws  of 2013, is amended to read as
follows:
  (a) In order to assist in  the  performance  of  the  superintendent's
duties under this chapter, the superintendent:
  (1)  may  share  documents,  materials or other information, including
confidential and privileged documents,  materials  or  information  with
other  state,  federal,  and international regulatory agencies, with the
National Association  of  Insurance  Commissioners,  its  affiliates  or
subsidiaries, and with state, federal, and international law enforcement
authorities,  including  members of any supervisory college described in

S. 7168                            36

section three hundred two of this chapter, provided that  the  recipient
has  the authority and agrees to maintain the confidentiality and privi-
leged status of the document, material or other  information;  provided,
however,  that  this paragraph shall not be construed as limiting access
to records pursuant to article six of the public officers law;
  (2) may receive documents, materials or information, including  other-
wise  confidential  and  privileged documents, materials or information,
from the National Association of Insurance Commissioners, its affiliates
or subsidiaries and from regulatory and  law  enforcement  officials  of
other foreign or domestic jurisdictions, including members of any super-
visory  college  described in section three hundred two of this chapter,
and shall maintain as confidential or privileged any document,  material
or  information  received  with  notice  or the understanding that it is
confidential or privileged under the laws of the  jurisdiction  that  is
the source of the document, material or information; and
  (3)  [may]  (A)  SHALL enter into WRITTEN agreements governing sharing
and use of documents, materials  or  information  consistent  with  this
subsection[.]; AND
  (B) RELATING TO THE REPORTS REQUIRED PURSUANT TO SECTIONS ONE THOUSAND
FIVE HUNDRED THREE, ONE THOUSAND SIX HUNDRED FOUR AND ONE THOUSAND SEVEN
HUNDRED SEVENTEEN OF THIS CHAPTER AND IN FURTHERANCE OF THIS SUBSECTION:
(I)  SPECIFY  PROCEDURES AND PROTOCOLS REGARDING THE CONFIDENTIALITY AND
SECURITY OF INFORMATION SHARED WITH THE NATIONAL ASSOCIATION  OF  INSUR-
ANCE COMMISSIONERS OR A THIRD-PARTY CONSULTANT DESIGNATED BY THAT ORGAN-
IZATION,  THE  SUPERINTENDENT OR ANOTHER STATE, FEDERAL OR INTERNATIONAL
REGULATOR AGENCY, INCLUDING PROCEDURES OR PROTOCOLS FOR SHARING  BY  THE
ASSOCIATION  OR  SUCH THIRD-PARTY CONSULTANT WITH OTHER STATE REGULATORS
FROM STATES IN WHICH THE INSURANCE GROUP  HAS  DOMICILED  INSURERS,  AND
ENTER  INTO  A  WRITTEN AGREEMENT WHICH SHALL PROVIDE THAT THE RECIPIENT
MAINTAIN THE CONFIDENTIALITY AND PRIVILEGED STATUS OF  THE  ORSA-RELATED
DOCUMENTS,  MATERIALS  OR  OTHER INFORMATION AND HAS VERIFIED IN WRITING
THE LEGAL AUTHORITY  TO  MAINTAIN  CONFIDENTIALITY;  (II)  SPECIFY  THAT
OWNERSHIP  OF INFORMATION SHARED WITH THE NATIONAL ASSOCIATION OF INSUR-
ANCE COMMISSIONERS OR  SUCH  THIRD-PARTY  CONSULTANT  REMAINS  WITH  THE
SUPERINTENDENT  AND  THE  ASSOCIATION'S OR SUCH THIRD-PARTY CONSULTANT'S
USE OF THE INFORMATION IS SUBJECT TO THE DIRECTION  OF  THE  SUPERINTEN-
DENT; (III) PROHIBIT THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS
OR  SUCH  THIRD-PARTY  CONSULTANT  FROM  STORING  THE INFORMATION SHARED
PURSUANT TO THIS SUBSECTION IN A PERMANENT DATABASE AFTER THE UNDERLYING
ANALYSIS IS COMPLETED; (IV) REQUIRE PROMPT NOTICE  TO  BE  GIVEN  TO  AN
INSURER WHOSE CONFIDENTIAL INFORMATION IN THE POSSESSION OF THE NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS OR SUCH THIRD-PARTY CONSULTANT IS
SUBJECT  TO A REQUEST OR SUBPOENA TO THE ASSOCIATION OR SUCH THIRD-PARTY
CONSULTANT FOR DISCLOSURE OR PRODUCTION; AND (V)  REQUIRE  THE  NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS OR SUCH THIRD-PARTY CONSULTANT TO
CONSENT  TO INTERVENTION BY AN INSURER IN ANY JUDICIAL OR ADMINISTRATIVE
ACTION IN WHICH SUCH ASSOCIATION OR SUCH THIRD-PARTY CONSULTANT  MAY  BE
REQUIRED  TO  DISCLOSE CONFIDENTIAL INFORMATION ABOUT THE INSURER SHARED
WITH THE ASSOCIATION OR SUCH THIRD-PARTY CONSULTANT.
  S 2. Subsection (a) of section 1501 of the insurance law is amended by
adding three new paragraphs 8, 9, and 10 to read as follows:
  (8) "OWN RISK AND SOLVENCY ASSESSMENT" OR "ORSA" SHALL MEAN  A  CONFI-
DENTIAL  INTERNAL  ASSESSMENT,  APPROPRIATE  TO  THE  NATURE,  SCALE AND
COMPLEXITY OF AN INSURER OR INSURANCE GROUP, CONDUCTED BY  THAT  INSURER
OR  INSURANCE  GROUP  OF THE MATERIAL AND RELEVANT RISKS ASSOCIATED WITH

S. 7168                            37

THE INSURER OR INSURANCE GROUP'S CURRENT BUSINESS PLAN, AND  THE  SUFFI-
CIENCY OF CAPITAL RESOURCES TO SUPPORT THOSE RISKS.
  (9)  "ORSA  GUIDANCE MANUAL" SHALL MEAN THE CURRENT VERSION OF THE OWN
RISK AND SOLVENCY ASSESSMENT GUIDANCE MANUAL DEVELOPED  AND  ADOPTED  BY
THE  NATIONAL  ASSOCIATION  OF  INSURANCE  COMMISSIONERS  (NAIC)  AND AS
AMENDED FROM TIME TO TIME. A CHANGE IN THE ORSA GUIDANCE MANUAL SHALL BE
EFFECTIVE ON THE FIRST OF JANUARY FOLLOWING THE CALENDAR YEAR  IN  WHICH
THE CHANGES HAVE BEEN ADOPTED BY THE NAIC.
  (10) "ORSA SUMMARY REPORT" SHALL MEAN A CONFIDENTIAL HIGH-LEVEL SUMMA-
RY OF AN INSURER OR INSURANCE GROUP'S ORSA.
  S  3.  Section  1503 of the insurance law is amended by adding two new
subsections (c) and (d) to read as follows:
  (C)(1) AN INSURER, OR THE INSURANCE GROUP OF WHICH THE  INSURER  IS  A
MEMBER, SHALL REGULARLY CONDUCT AN ORSA CONSISTENT WITH A PROCESS COMPA-
RABLE  TO  THE ORSA GUIDANCE MANUAL. THE ORSA SHALL BE CONDUCTED NO LESS
THAN ANNUALLY BUT ALSO AT ANY TIME WHEN THERE ARE SIGNIFICANT CHANGES TO
THE RISK PROFILE OF THE INSURER OR THE  INSURANCE  GROUP  OF  WHICH  THE
INSURER IS A MEMBER.
  (2) UPON THE REQUEST OF THE SUPERINTENDENT, AND NO MORE THAN ONCE EACH
YEAR,  AN AUTHORIZED DOMESTIC INSURER SHALL SUBMIT TO THE SUPERINTENDENT
AN ORSA SUMMARY REPORT OR  ANY  COMBINATION  OF  REPORTS  THAT  TOGETHER
CONTAIN  THE INFORMATION DESCRIBED IN THE ORSA GUIDANCE MANUAL, APPLICA-
BLE TO THE INSURER AND/OR THE INSURANCE GROUP OF WHICH IT IS  A  MEMBER.
NOTWITHSTANDING ANY REQUEST FROM THE SUPERINTENDENT, IF THE INSURER IS A
MEMBER  OF  AN  INSURANCE  GROUP, THE INSURER SHALL SUBMIT THE REPORT(S)
REQUIRED BY THIS SUBSECTION IF THE  SUPERINTENDENT  IS  THE  LEAD  STATE
COMMISSIONER  OF  THE  INSURANCE  GROUP, AS DETERMINED BY THE PROCEDURES
WITHIN THE FINANCIAL ANALYSIS HANDBOOK ADOPTED BY THE  NATIONAL  ASSOCI-
ATION OF INSURANCE COMMISSIONERS.
  (3)  THE  REPORT(S) SHALL INCLUDE A SIGNATURE OF THE INSURER OR INSUR-
ANCE GROUP'S CHIEF RISK OFFICER OR OTHER EXECUTIVE HAVING RESPONSIBILITY
FOR THE OVERSIGHT OF THE INSURER'S ENTERPRISE  RISK  MANAGEMENT  PROCESS
ATTESTING  TO  THE BEST OF HIS/HER BELIEF AND KNOWLEDGE THAT THE INSURER
APPLIES THE ENTERPRISE RISK MANAGEMENT PROCESS  DESCRIBED  IN  THE  ORSA
SUMMARY  REPORT  AND  THAT A COPY OF THE REPORT HAS BEEN PROVIDED TO THE
INSURER'S BOARD OF DIRECTORS OR THE APPROPRIATE COMMITTEE THEREOF.
  (4) AN INSURER MAY COMPLY WITH PARAGRAPH ONE  OF  THIS  SUBSECTION  BY
PROVIDING  THE  MOST RECENT AND SUBSTANTIALLY SIMILAR REPORT(S) PROVIDED
BY THE INSURER OR ANOTHER MEMBER OF AN  INSURANCE  GROUP  OF  WHICH  THE
INSURER  IS A MEMBER TO THE COMMISSIONER OF ANOTHER STATE OR TO A SUPER-
VISOR OR REGULATOR OF A FOREIGN JURISDICTION, IF  THAT  REPORT  PROVIDES
INFORMATION  THAT IS COMPARABLE TO THE INFORMATION DESCRIBED IN THE ORSA
GUIDANCE MANUAL. ANY SUCH REPORT IN A LANGUAGE OTHER THAN  ENGLISH  MUST
BE  ACCOMPANIED  BY  A  TRANSLATION  OF  THAT  REPORT  INTO  THE ENGLISH
LANGUAGE.
  (D) THE SUPERINTENDENT MAY  PROMULGATE  ANY  REGULATION  NECESSARY  TO
ACCOMPLISH  THE REQUIREMENTS OF SUBSECTIONS (B) AND (C) OF THIS SECTION,
INCLUDING ANY EXEMPTIONS DETERMINED AS APPROPRIATE  BY  THE  SUPERINTEN-
DENT.
  S  4.  Subsection (c) of section 1504 of the insurance law, as amended
by chapter 238 of the laws of 2013, is amended to read as follows:
  (c) [The] (1) EXCEPT AS PROVIDED IN PARAGRAPH TWO OF THIS  SUBSECTION,
THE  superintendent shall keep the contents of each report made pursuant
to this article and any information  obtained  in  connection  therewith
confidential  and shall not make the same public without the prior writ-
ten consent of the controlled insurer to which it  pertains  unless  the

S. 7168                            38

superintendent after notice and an opportunity to be heard, shall deter-
mine  that  the  interests  of policyholders, shareholders or the public
will be served by the publication thereof. In any action  or  proceeding
by  the  superintendent  against the person examined or any other person
within the same holding company system  a  report  of  such  examination
published  by  the superintendent shall be admissible as evidence of the
facts stated therein.
  (2)(A) DOCUMENTS, MATERIALS OR OTHER INFORMATION RELATING TO AN ENTER-
PRISE RISK MANAGEMENT REPORT OR ORSA SUMMARY REPORT REQUIRED PURSUANT TO
THIS ARTICLE AND IN THE POSSESSION OR CONTROL OF THE SUPERINTENDENT THAT
ARE OBTAINED BY, CREATED BY OR DISCLOSED TO THE  SUPERINTENDENT  OR  ANY
OTHER  PERSON  UNDER  THIS ARTICLE, IS RECOGNIZED BY THIS STATE AS BEING
PROPRIETARY AND TO CONTAIN TRADE SECRETS. ALL SUCH DOCUMENTS,  MATERIALS
OR  OTHER INFORMATION SHALL BE CONFIDENTIAL BY LAW AND PRIVILEGED, SHALL
NOT BE SUBJECT TO SECTION EIGHTY-SEVEN OF THE PUBLIC OFFICERS LAW, SHALL
NOT BE SUBJECT TO SUBPOENA, AND SHALL NOT BE  SUBJECT  TO  DISCOVERY  OR
ADMISSIBLE IN EVIDENCE IN ANY PRIVATE CIVIL ACTION.  HOWEVER, THE SUPER-
INTENDENT  IS AUTHORIZED TO USE THE DOCUMENTS, MATERIALS OR OTHER INFOR-
MATION IN THE FURTHERANCE OF ANY REGULATORY OR LEGAL ACTION BROUGHT AS A
PART OF THE SUPERINTENDENT'S OFFICIAL DUTIES. THE  SUPERINTENDENT  SHALL
NOT  OTHERWISE MAKE THE DOCUMENTS, MATERIALS OR OTHER INFORMATION PUBLIC
WITHOUT THE PRIOR WRITTEN CONSENT OF THE INSURER.
  (B) NEITHER THE SUPERINTENDENT, NOR ANY PERSON WHO RECEIVED DOCUMENTS,
MATERIALS OR OTHER  ORSA-RELATED  INFORMATION,  THROUGH  EXAMINATION  OR
OTHERWISE,  WHILE  ACTING  UNDER  THE AUTHORITY OF THE SUPERINTENDENT OR
WITH WHOM SUCH DOCUMENTS, MATERIALS  OR  OTHER  INFORMATION  ARE  SHARED
PURSUANT  TO  THIS  ARTICLE SHALL BE PERMITTED OR REQUIRED TO TESTIFY IN
ANY PRIVATE CIVIL ACTION CONCERNING ANY CONFIDENTIAL DOCUMENTS,  MATERI-
ALS, OR INFORMATION SUBJECT TO SUBPARAGRAPH (A) OF THIS PARAGRAPH.
  S  5. Subsection (b) of section 1604 of the insurance law, as added by
chapter 238 of the laws of 2013, is amended to read as follows:
  (b)(1) An authorized domestic insurer, other than a  domestic  insurer
required  to  register  as  a controlled insurer pursuant to section one
thousand five hundred three of this chapter, shall adopt a formal enter-
prise risk management function and shall file an enterprise risk  report
with  the  superintendent  by  April  thirtieth of each year. The report
shall, to the best of the insurer's knowledge and belief,  identify  the
material  risks within any subsidiary that could pose enterprise risk to
the insurer.
  (2) (A) AN AUTHORIZED DOMESTIC INSURER, OTHER THAN A DOMESTIC  INSURER
REQUIRED  TO  REGISTER  AS  A CONTROLLED INSURER PURSUANT TO SECTION ONE
THOUSAND FIVE HUNDRED THREE OF THIS CHAPTER, SHALL REGULARLY CONDUCT  AN
ORSA  CONSISTENT  WITH A PROCESS COMPARABLE TO THE ORSA GUIDANCE MANUAL.
THE ORSA SHALL BE CONDUCTED NO LESS THAN ANNUALLY BUT ALSO AT  ANY  TIME
WHEN THERE ARE SIGNIFICANT CHANGES TO THE RISK PROFILE OF THE INSURER OR
THE INSURANCE GROUP OF WHICH THE INSURER IS A MEMBER.
  (B) UPON THE REQUEST OF THE SUPERINTENDENT, AND NO MORE THAN ONCE EACH
YEAR,  AN  AUTHORIZED  DOMESTIC  INSURER,  OTHER THAN A DOMESTIC INSURER
REQUIRED TO REGISTER AS A CONTROLLED INSURER  PURSUANT  TO  SECTION  ONE
THOUSAND  FIVE HUNDRED THREE OF THIS CHAPTER, SHALL SUBMIT TO THE SUPER-
INTENDENT AN ORSA SUMMARY REPORT OR  ANY  COMBINATION  OF  REPORTS  THAT
TOGETHER  CONTAIN THE INFORMATION DESCRIBED IN THE ORSA GUIDANCE MANUAL,
APPLICABLE TO THE INSURER AND/OR THE INSURANCE GROUP OF WHICH  IT  IS  A
MEMBER.    NOTWITHSTANDING  ANY  REQUEST FROM THE SUPERINTENDENT, IF THE
INSURER IS A MEMBER OF AN INSURANCE GROUP, THE INSURER SHALL SUBMIT  THE
REPORT(S)  REQUIRED BY THIS SUBSECTION IF THE SUPERINTENDENT IS THE LEAD

S. 7168                            39

STATE COMMISSIONER OF THE INSURANCE GROUP, AS DETERMINED BY  THE  PROCE-
DURES  WITHIN  THE  FINANCIAL  ANALYSIS HANDBOOK ADOPTED BY THE NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS.
  (C)  THE  REPORT(S) SHALL INCLUDE A SIGNATURE OF THE INSURER OR INSUR-
ANCE GROUP'S CHIEF RISK OFFICER OR OTHER EXECUTIVE HAVING RESPONSIBILITY
FOR THE OVERSIGHT OF THE INSURER'S ENTERPRISE  RISK  MANAGEMENT  PROCESS
ATTESTING  TO  THE BEST OF HIS/HER BELIEF AND KNOWLEDGE THAT THE INSURER
APPLIES THE ENTERPRISE RISK MANAGEMENT PROCESS  DESCRIBED  IN  THE  ORSA
SUMMARY  REPORT  AND  THAT A COPY OF THE REPORT HAS BEEN PROVIDED TO THE
INSURER'S BOARD OF DIRECTORS OR THE APPROPRIATE COMMITTEE THEREOF.
  (D) AN INSURER MAY COMPLY WITH SUBPARAGRAPH (B) OF THIS  PARAGRAPH  BY
PROVIDING  THE  MOST RECENT AND SUBSTANTIALLY SIMILAR REPORT(S) PROVIDED
BY THE INSURER OR ANOTHER MEMBER OF AN  INSURANCE  GROUP  OF  WHICH  THE
INSURER  IS A MEMBER TO THE COMMISSIONER OF ANOTHER STATE OR TO A SUPER-
VISOR OR REGULATOR OF A FOREIGN JURISDICTION, IF  THAT  REPORT  PROVIDES
INFORMATION  THAT IS COMPARABLE TO THE INFORMATION DESCRIBED IN THE ORSA
GUIDANCE MANUAL. ANY SUCH REPORT IN A LANGUAGE OTHER THAN  ENGLISH  MUST
BE  ACCOMPANIED  BY  A  TRANSLATION  OF  THAT  REPORT  INTO  THE ENGLISH
LANGUAGE.
  (3)(A) DOCUMENTS, MATERIALS OR OTHER INFORMATION RELATING TO AN ENTER-
PRISE RISK MANAGEMENT REPORT OR ORSA SUMMARY REPORT REQUIRED PURSUANT TO
THIS ARTICLE AND IN THE POSSESSION OR CONTROL OF THE SUPERINTENDENT THAT
ARE OBTAINED BY, CREATED BY OR DISCLOSED TO THE  SUPERINTENDENT  OR  ANY
OTHER  PERSON  UNDER  THIS ARTICLE, IS RECOGNIZED BY THIS STATE AS BEING
PROPRIETARY AND TO CONTAIN TRADE SECRETS. ALL SUCH DOCUMENTS,  MATERIALS
OR  OTHER INFORMATION SHALL BE CONFIDENTIAL BY LAW AND PRIVILEGED, SHALL
NOT BE SUBJECT TO SECTION EIGHTY-SEVEN OF THE PUBLIC OFFICERS LAW, SHALL
NOT BE SUBJECT TO SUBPOENA, AND SHALL NOT BE  SUBJECT  TO  DISCOVERY  OR
ADMISSIBLE  IN EVIDENCE IN ANY PRIVATE CIVIL ACTION. HOWEVER, THE SUPER-
INTENDENT IS AUTHORIZED TO USE THE DOCUMENTS, MATERIALS OR OTHER  INFOR-
MATION IN THE FURTHERANCE OF ANY REGULATORY OR LEGAL ACTION BROUGHT AS A
PART  OF  THE SUPERINTENDENT'S OFFICIAL DUTIES. THE SUPERINTENDENT SHALL
NOT OTHERWISE MAKE THE DOCUMENTS, MATERIALS OR OTHER INFORMATION  PUBLIC
WITHOUT THE PRIOR WRITTEN CONSENT OF THE INSURER.
  (B) NEITHER THE SUPERINTENDENT, NOR ANY PERSON WHO RECEIVED DOCUMENTS,
MATERIALS  OR  OTHER  ORSA-RELATED  INFORMATION,  THROUGH EXAMINATION OR
OTHERWISE, WHILE ACTING UNDER THE AUTHORITY  OF  THE  SUPERINTENDENT  OR
WITH  WHOM  SUCH  DOCUMENTS,  MATERIALS  OR OTHER INFORMATION ARE SHARED
PURSUANT TO THIS ARTICLE SHALL BE PERMITTED OR REQUIRED  TO  TESTIFY  IN
ANY  PRIVATE CIVIL ACTION CONCERNING ANY CONFIDENTIAL DOCUMENTS, MATERI-
ALS, OR INFORMATION SUBJECT TO SUBPARAGRAPH (A) OF THIS PARAGRAPH.
  (4) THE SUPERINTENDENT MAY  PROMULGATE  ANY  REGULATION  NECESSARY  TO
ACCOMPLISH THE REQUIREMENTS OF THIS SUBSECTION, INCLUDING ANY EXEMPTIONS
DETERMINED AS APPROPRIATE BY THE SUPERINTENDENT.
  (5)(A)  For  the purposes of this article, "enterprise risk" means any
activity, circumstance, event, or series of events involving one or more
subsidiaries of an insurer that, if not remedied promptly, is likely  to
have a material adverse effect upon the financial condition or liquidity
of  the insurer, including anything that would cause the insurer's risk-
based capital to fall into company action level as set forth in  section
one  thousand  three  hundred twenty-four of this chapter, or that would
cause further transaction of business to be hazardous to  the  insurer's
policyholders or creditors or the public.
  (B) FOR THE PURPOSES OF THIS ARTICLE, THE TERMS "OWN RISK AND SOLVENCY
ASSESSMENT"  OR "ORSA," "ORSA GUIDANCE MANUAL" AND "ORSA SUMMARY REPORT"

S. 7168                            40

SHALL HAVE THE SAME MEANING AS PROVIDED IN SECTION FIFTEEN  HUNDRED  ONE
OF THIS CHAPTER.
  S  6.  Section  1702  of  the insurance law is amended by adding a new
subsection (g) to read as follows:
  (G) "OWN RISK AND SOLVENCY ASSESSMENT" OR "ORSA," "ORSA GUIDANCE MANU-
AL" AND "ORSA SUMMARY REPORT" SHALL HAVE THE SAME MEANING AS PROVIDED IN
SECTION ONE THOUSAND FIVE HUNDRED ONE OF THIS CHAPTER.
  S 7. Section 1709 of the insurance law, as amended by chapter  381  of
the laws of 1986, is amended to read as follows:
  S  1709.  Confidentiality of information reports.  [The] (A) EXCEPT AS
PROVIDED IN SUBSECTION (B) OF THIS SECTION, THE contents of each  infor-
mation  report  filed hereunder and information pertaining thereto shall
be kept confidential, shall not be subject to subpoena and shall not  be
made public unless, after notice and opportunity to be heard, the super-
intendent  determines  that the interests of policyholders, subscribers,
stockholders or the public will be served by  the  publication  thereof.
The  provisions  of this section shall not be applicable to any informa-
tion report filed hereunder and any information pertaining  thereto,  if
the  parent  corporation is a corporation subject to article forty-three
of this chapter.
  (B)(1) DOCUMENTS, MATERIALS OR OTHER INFORMATION RELATING TO AN ENTER-
PRISE RISK MANAGEMENT REPORT OR ORSA SUMMARY REPORT REQUIRED PURSUANT TO
THIS ARTICLE AND IN THE POSSESSION OR CONTROL OF THE SUPERINTENDENT THAT
ARE OBTAINED BY, CREATED BY OR DISCLOSED TO THE  SUPERINTENDENT  OR  ANY
OTHER  PERSON  UNDER  THIS ARTICLE, IS RECOGNIZED BY THIS STATE AS BEING
PROPRIETARY AND TO CONTAIN TRADE SECRETS. ALL SUCH DOCUMENTS,  MATERIALS
OR  OTHER INFORMATION SHALL BE CONFIDENTIAL BY LAW AND PRIVILEGED, SHALL
NOT BE SUBJECT TO SECTION EIGHTY-SEVEN OF THE PUBLIC OFFICERS LAW, SHALL
NOT BE SUBJECT TO SUBPOENA, AND SHALL NOT BE  SUBJECT  TO  DISCOVERY  OR
ADMISSIBLE  IN EVIDENCE IN ANY PRIVATE CIVIL ACTION. HOWEVER, THE SUPER-
INTENDENT IS AUTHORIZED TO USE THE DOCUMENTS, MATERIALS OR OTHER  INFOR-
MATION IN THE FURTHERANCE OF ANY REGULATORY OR LEGAL ACTION BROUGHT AS A
PART  OF  THE SUPERINTENDENT'S OFFICIAL DUTIES. THE SUPERINTENDENT SHALL
NOT OTHERWISE MAKE THE DOCUMENTS, MATERIALS OR OTHER INFORMATION  PUBLIC
WITHOUT THE PRIOR WRITTEN CONSENT OF THE INSURER.
  (2) NEITHER THE SUPERINTENDENT, NOR ANY PERSON WHO RECEIVED DOCUMENTS,
MATERIALS  OR  OTHER  ORSA-RELATED  INFORMATION,  THROUGH EXAMINATION OR
OTHERWISE, WHILE ACTING UNDER THE AUTHORITY  OF  THE  SUPERINTENDENT  OR
WITH  WHOM  SUCH  DOCUMENTS,  MATERIALS  OR OTHER INFORMATION ARE SHARED
PURSUANT TO THIS ARTICLE SHALL BE PERMITTED OR REQUIRED  TO  TESTIFY  IN
ANY  PRIVATE CIVIL ACTION CONCERNING ANY CONFIDENTIAL DOCUMENTS, MATERI-
ALS, OR INFORMATION SUBJECT TO PARAGRAPH ONE OF THIS SECTION.
  S 8. Section 1717 of the insurance law is amended by  adding  two  new
subsections (c) and (d) to read as follows:
  (C)(1)  AN  AUTHORIZED DOMESTIC INSURER, OTHER THAN A DOMESTIC INSURER
REQUIRED TO REGISTER AS A CONTROLLED INSURER  PURSUANT  TO  SECTION  ONE
THOUSAND  FIVE HUNDRED THREE OF THIS CHAPTER, SHALL REGULARLY CONDUCT AN
ORSA CONSISTENT WITH A PROCESS COMPARABLE TO THE ORSA  GUIDANCE  MANUAL.
THE  ORSA  SHALL BE CONDUCTED NO LESS THAN ANNUALLY BUT ALSO AT ANY TIME
WHEN THERE ARE SIGNIFICANT CHANGES TO THE RISK PROFILE OF THE INSURER OR
THE INSURANCE GROUP OF WHICH THE INSURER IS A MEMBER.
  (2) UPON THE REQUEST OF THE SUPERINTENDENT, AND NO MORE THAN ONCE EACH
YEAR, AN AUTHORIZED DOMESTIC INSURER,  OTHER  THAN  A  DOMESTIC  INSURER
REQUIRED  TO  REGISTER  AS  A CONTROLLED INSURER PURSUANT TO SECTION ONE
THOUSAND FIVE HUNDRED THREE OF THIS CHAPTER, SHALL SUBMIT TO THE  SUPER-
INTENDENT  AN  ORSA  SUMMARY  REPORT  OR ANY COMBINATION OF REPORTS THAT

S. 7168                            41

TOGETHER CONTAIN THE INFORMATION DESCRIBED IN THE ORSA GUIDANCE  MANUAL,
APPLICABLE  TO  THE  INSURER AND/OR THE INSURANCE GROUP OF WHICH IT IS A
MEMBER.  NOTWITHSTANDING ANY REQUEST FROM  THE  SUPERINTENDENT,  IF  THE
INSURER  IS A MEMBER OF AN INSURANCE GROUP, THE INSURER SHALL SUBMIT THE
REPORT(S) REQUIRED BY THIS SUBSECTION IF THE SUPERINTENDENT IS THE  LEAD
STATE  COMMISSIONER  OF THE INSURANCE GROUP, AS DETERMINED BY THE PROCE-
DURES WITHIN THE FINANCIAL ANALYSIS HANDBOOK  ADOPTED  BY  THE  NATIONAL
ASSOCIATION OF INSURANCE COMMISSIONERS.
  (3)  THE  REPORT(S) SHALL INCLUDE A SIGNATURE OF THE INSURER OR INSUR-
ANCE GROUP'S CHIEF RISK OFFICER OR OTHER EXECUTIVE HAVING RESPONSIBILITY
FOR THE OVERSIGHT OF THE INSURER'S ENTERPRISE  RISK  MANAGEMENT  PROCESS
ATTESTING  TO  THE BEST OF HIS/HER BELIEF AND KNOWLEDGE THAT THE INSURER
APPLIES THE ENTERPRISE RISK MANAGEMENT PROCESS  DESCRIBED  IN  THE  ORSA
SUMMARY  REPORT  AND  THAT A COPY OF THE REPORT HAS BEEN PROVIDED TO THE
INSURER'S BOARD OF DIRECTORS OR THE APPROPRIATE COMMITTEE THEREOF.
  (4) AN INSURER MAY COMPLY WITH PARAGRAPH TWO  OF  THIS  SUBSECTION  BY
PROVIDING  THE  MOST RECENT AND SUBSTANTIALLY SIMILAR REPORT(S) PROVIDED
BY THE INSURER OR ANOTHER MEMBER OF AN  INSURANCE  GROUP  OF  WHICH  THE
INSURER  IS A MEMBER TO THE COMMISSIONER OF ANOTHER STATE OR TO A SUPER-
VISOR OR REGULATOR OF A FOREIGN JURISDICTION, IF  THAT  REPORT  PROVIDES
INFORMATION  THAT IS COMPARABLE TO THE INFORMATION DESCRIBED IN THE ORSA
GUIDANCE MANUAL. ANY SUCH REPORT IN A LANGUAGE OTHER THAN  ENGLISH  MUST
BE  ACCOMPANIED  BY  A  TRANSLATION  OF  THAT  REPORT  INTO  THE ENGLISH
LANGUAGE.
  (D) THE SUPERINTENDENT MAY  PROMULGATE  ANY  REGULATION  NECESSARY  TO
ACCOMPLISH  THE REQUIREMENTS OF SUBSECTIONS (B) AND (C) OF THIS SECTION,
INCLUDING ANY EXEMPTIONS DETERMINED AS APPROPRIATE  BY  THE  SUPERINTEN-
DENT.
  S 9. This act shall take effect immediately.
  S 4. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be adjudged by a court of compe-
tent  jurisdiction to be invalid, such judgment shall not affect, impair
or invalidate the remainder thereof, but shall be confined in its opera-
tion to the clause, sentence, paragraph, subdivision,  section  or  part
thereof  directly  involved  in  the  controversy in which such judgment
shall have been rendered. It is hereby declared to be the intent of  the
legislature  that  this act would have been enacted even if such invalid
provisions had not been included herein.
  S 5. This act shall take effect immediately  provided,  however,  that
the  applicable effective date of Parts A through E of this act shall be
as specifically set forth in the last section of such Parts.