S T A T E   O F   N E W   Y O R K
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                                  7534

                            I N  S E N A T E

                               May 9, 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 the  establishment  of
  an  administrative  procedure for guidance, regulations, inquiries and
  examinations by the department of financial services

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

  Section  1.  Section  301  of  the insurance law is amended to read as
follows:
  S 301. Regulations by superintendent.  (A)  The  superintendent  shall
have  the power to prescribe and from time to time withdraw or amend, in
writing, regulations, not inconsistent with the provisions of this chap-
ter:
  [(a)] (1) governing the duties assigned to the members of the staff of
the department;
  [(b)] (2) effectuating any power, given to him under the provisions of
this chapter to prescribe forms or otherwise make regulations;
  [(c)] (3) interpreting the provisions of this chapter; and
  [(d)] (4) governing the procedures to be followed in the  practice  of
the department.
  (B)  WHEN  PROPOSING ANY REGULATION, RULE OR GUIDANCE, THE SUPERINTEN-
DENT SHALL CONSIDER AND DETERMINE WHETHER  OR  NOT  SUCH  PROPOSAL  WILL
CAUSE  UNDUE  DELETERIOUS  ECONOMIC  EFFECT OR HAVE AN OVERLY BURDENSOME
IMPACT UPON ANY LICENSED ENTITY UPON WHICH IT IS INTENDED TO BE IMPOSED,
TAKING INTO PARTICULAR ACCOUNT ANY DISPROPORTIONATE IMPACT THAT  IT  MAY
HAVE ON A DOMESTIC LICENSED ENTITY, AND WHETHER OR NOT THE PROPOSAL WILL
NEGATIVELY  IMPACT  THE AFFORDABILITY OR AVAILABILITY OF A PRODUCT BEING
OFFERED BY THE LICENSED ENTITY. IN MAKING THAT DETERMINATION, THE SUPER-
INTENDENT SHOULD SET FORTH IN A WRITTEN STATEMENT THE PURPOSE OF, NECES-
SITY FOR AND EXPECTED BENEFITS TO BE DERIVED  FROM  THE  PROPOSAL.  SUCH
STATEMENT  SHALL  ALSO  DETAIL THE PROJECTED COSTS OF COMPLYING WITH THE
PROPOSAL, WHICH SHALL INCLUDE:
  (1) THE  COSTS  ASSOCIATED  WITH  IMPLEMENTING  THE  PROPOSAL  BY  THE
LICENSED ENTITY, INCLUDING BUT NOT LIMITED TO HUMAN RESOURCE, TECHNOLOGY

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

                                                           LBD15284-01-6

S. 7534                             2

OR  ADMINISTRATIVE  COSTS,  AND  INCLUDING  ANY ADDITIONAL COSTS THAT IT
MIGHT IMPOSE UPON A DOMESTIC LICENSED ENTITY;
  (2) WHETHER OR NOT THE PROPOSAL COULD NEGATIVELY IMPACT THE PRICING OR
AVAILABILITY OF A PRODUCT BEING OFFERED BY THE LICENSED ENTITY;
  (3)  THE INFORMATION, INCLUDING THE SOURCE OR SOURCES OF SUCH INFORMA-
TION, AND METHODOLOGY UPON WHICH THE COST ANALYSIS IS BASED; OR
  (4) WHERE THE SUPERINTENDENT FINDS THAT  IT  CANNOT  FULLY  PROVIDE  A
STATEMENT  OF  SUCH  COSTS, A STATEMENT SETTING FORTH ITS BEST ESTIMATE,
WHICH SHALL INDICATE THE INFORMATION AND  METHODOLOGY  UPON  WHICH  SUCH
BEST  ESTIMATE  IS  BASED  AND THE REASON OR REASONS WHY A COMPLETE COST
STATEMENT CANNOT BE PROVIDED.
  A COPY OF THE PROPOSED REGULATION, RULE OR GUIDANCE,  ALONG  WITH  THE
WRITTEN  STATEMENT  REQUIRED  PURSUANT TO THIS SUBSECTION, SHALL BE MADE
AVAILABLE TO THE LICENSED ENTITY UPON WHICH THE PROPOSAL WILL BE IMPOSED
PRIOR TO A PROPOSED RULE OR REGULATION'S OFFICIAL  PUBLICATION  PURSUANT
TO  THE  STATE ADMINISTRATIVE PROCEDURE ACT AND PRIOR TO THE ISSUANCE OF
THE GUIDANCE.
  S 2. Paragraph 1 of subsection (a) of section  308  of  the  insurance
law,  as  amended by chapter 499 of the laws of 2009, is amended to read
as follows:
  (1) The superintendent may also  address  to  any  health  maintenance
organization,  life settlement provider, life settlement intermediary or
its officers, or any authorized insurer or rate service organization, or
officers thereof, any inquiry in relation to its transactions or  condi-
tion  or  any matter connected therewith. (A) PRIOR TO IMPOSING ANY SUCH
INQUIRY, THE SUPERINTENDENT SHALL CONSIDER AND DETERMINE WHETHER OR  NOT
THE  INQUIRY  WILL  CAUSE  UNDUE  DELETERIOUS ECONOMIC EFFECT OR HAVE ON
OVERLY BURDENSOME IMPACT UPON THE REGULATED PERSON INTENDED FOR  RECEIPT
OF  THE INQUIRY. IN MAKING THAT DETERMINATION, THE SUPERINTENDENT SHOULD
SET FORTH IN A WRITTEN STATEMENT  THE  PURPOSE  OF,  NECESSITY  FOR  AND
EXPECTED  BENEFITS  TO BE DERIVED FROM THE INQUIRY. SUCH STATEMENT SHALL
ALSO DETAIL THE PROJECTED COSTS OF RESPONDING TO THE INQUIRY WHICH SHALL
INCLUDE:
  (I) THE COSTS FOR PREPARING A RESPONSE TO THE INQUIRY BY THE REGULATED
PERSON INTENDED FOR THE RECEIPT OF THE INQUIRY, INCLUDING BUT NOT LIMIT-
ED TO HUMAN RESOURCE, TECHNOLOGY OR ADMINISTRATIVE COSTS;
  (II) THE INFORMATION, INCLUDING THE SOURCE OR SOURCES OF SUCH INFORMA-
TION, AND METHODOLOGY UPON WHICH THE COST ANALYSIS IS BASED; OR
  (III) WHERE THE SUPERINTENDENT FINDS THAT IT CANNOT  FULLY  PROVIDE  A
STATEMENT  OF  SUCH  COSTS, A STATEMENT SETTING FORTH ITS BEST ESTIMATE,
WHICH SHALL INDICATE THE INFORMATION AND  METHODOLOGY  UPON  WHICH  SUCH
BEST  ESTIMATE  IS  BASED  AND THE REASON OR REASONS WHY A COMPLETE COST
STATEMENT CANNOT BE PROVIDED.   THE  WRITTEN  STATEMENT  SHALL  BE  MADE
AVAILABLE  TO  THE  REGULATED PERSON INTENDED FOR RECEIPT OF THE INQUIRY
PRIOR TO THE IMPOSITION OF THE INQUIRY.
  (B) Every corporation or person so addressed shall reply in writing to
such inquiry [promptly and] truthfully AND WITHIN A REASONABLE PERIOD OF
TIME, and such reply  shall  be,  if  required  by  the  superintendent,
subscribed  by  such  individual,  or  by  such officer or officers of a
corporation, as the superintendent shall designate, and affirmed by them
as true under the penalties of perjury.
  S 3. Section 311 of the insurance law is amended to read as follows:
  S 311. Filing of report on  examination.  (a)  Except  as  hereinafter
provided the superintendent may withhold from public inspection for such
time  as  he  deems  proper  any  report on examination made pursuant to
section three hundred ten of this article.

S. 7534                             3

  (b) (1) AN EXAMINATION SHALL BE CONSIDERED CLOSED WHEN THE  REPORT  ON
EXAMINATION  IS  ADOPTED BY THE SUPERINTENDENT. Before adopting any such
report and filing it for public  inspection,  the  superintendent  shall
notify  the  insurer  or  other  person  examined of its contents [and],
WHETHER  ANY FINE WILL BE IMPOSED OR ANY REGULATORY ACTION WILL BE TAKEN
AS A RESULT OF THE EXAMINATION AND THE AMOUNT OF ANY FINE TO BE  IMPOSED
OR NATURE OF ANY REGULATORY ACTION TO BE TAKEN. THE SUPERINTENDENT shall
ALSO  afford  such  insurer  or other person a reasonable opportunity to
obtain further details and to demand a hearing with reference to  facts,
conclusions or recommendations [therein] contained IN THE REPORT, OR ANY
FINE  TO  BE  IMPOSED  OR  REGULATORY ACTION TO TAKEN AS A RESULT OF THE
EXAMINATION.
  (2) If a hearing is requested  within  ten  days  after  [the  giving]
RECEIPT  of [such] THE notice REQUIRED PURSUANT TO PARAGRAPH ONE OF THIS
SUBSECTION, the superintendent  shall  give  notice  and  a  hearing  in
accordance  with  the  provisions of this article. Such hearing shall be
held before the superintendent or a deputy superintendent.
  (c) The report on examination, with  modifications  thereof,  if  any,
shall  be  [accepted] ADOPTED by the superintendent and filed for public
inspection within six months after WRITTEN ACCEPTANCE OF THE  REPORT  BY
THE  INSURER OR OTHER PERSON EXAMINED, OR THE final hearing thereon [and
if he]. IF THE SUPERINTENDENT deems it in the public interest to do  so,
he OR SHE may publish any such report or any excerpt therefrom or summa-
ry thereof, in one or more newspapers in the state.
  (d)  In any action or proceeding in the name of the people against the
insurer or other person examined, or any officer or agent thereof,  such
report,   if   adopted  by  the  superintendent  and  filed  for  public
inspection, shall be admissible in evidence  and  shall  be  presumptive
evidence of the facts stated therein.
  (e)  NO  FINE  MAY BE IMPOSED ON OR REGULATORY ACTION TAKEN AGAINST AN
INSURER AS A RESULT OF AN EXAMINATION UNLESS THE AMOUNT OF THE  FINE  OR
THE NATURE OF THE REGULATORY ACTION WAS DISCLOSED IN THE NOTICE REQUIRED
IN PARAGRAPH ONE OF SUBSECTION (B) OF THIS SECTION.
  (F)  Nothing  herein  contained shall preclude the superintendent from
instituting any proceeding under article seventy-four of this chapter at
any time or from using as proof in such proceeding any report  on  exam-
ination or part thereof, whether or not such report has been adopted and
filed.
  (G)  THE  SUPERINTENDENT  SHALL NOT BEGIN AN EXAMINATION OF AN INSURER
UNLESS AND UNTIL ALL PREVIOUS EXAMINATIONS  OF  THE  INSURER  HAVE  BEEN
CLOSED.
  S 4. This act shall take effect immediately.