Senate Bill S4864

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4864
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 28, 2019
                                ___________
 
 Introduced  by Sens. GOUNARDES, RAMOS -- 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  providing  protection
   to certain retirees from pension de-risking transactions; and to amend
   the  civil  practice  law and rules, in relation to statutorily exempt
   payments
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The insurance law is amended by adding a new section 3219-a
 to read as follows:
   §  3219-A.  PENSION  DE-RISKING  TRANSACTIONS WITH AN ANNUITY. (A) FOR
 PURPOSES OF THIS SECTION: (1) "EMPLOYER" MEANS  ANY  PERSON  ENGAGED  IN
 BUSINESS  IN  THIS  STATE  WHO  HAS  TWO OR MORE EMPLOYEES, BUT DOES NOT
 INCLUDE THE STATE OR ANY POLITICAL SUBDIVISION THEREOF;
   (2) "EMPLOYEE PENSION BENEFIT PLAN" MEANS AN "EMPLOYEE PENSION BENEFIT
 PLAN", AS DEFINED IN 29 USC 1002(2)(A); AND
   (3)  "PENSION  DE-RISKING  TRANSACTION"  MEANS  ANY  TRANSACTION  THAT
 INVOLVES  THE  TRANSFER  OF  PENSION BENEFITS (NOT INCLUDING HEALTH CARE
 BENEFITS) FROM A PENSION PLAN PROTECTED UNDER  THE  EMPLOYEE  RETIREMENT
 INCOME  SECURITY  ACT ("ERISA") TO A SUBSTITUTE PENSION BENEFIT PROVIDER
 SUCH AS AN INSURANCE COMPANY LICENSED AND REGULATED UNDER STATE LAW.
   (B) ANY INSURER ISSUING AN  ALLOCATED  OR  UNALLOCATED  GROUP  ANNUITY
 CONTRACT  TO  AN EMPLOYER OR AN EMPLOYEE DEFINED PENSION BENEFIT PLAN ON
 BEHALF OF AN EMPLOYER, FOR THE PURPOSE OF PROVIDING RETIREMENT  BENEFITS
 TO  EMPLOYEES  OR  FORMER  EMPLOYEES ("RETIREES") OF THE EMPLOYER, WHICH
 ANNUITY BENEFITS WILL NO LONGER BE PROTECTED UNDER THE FEDERAL  EMPLOYEE
 RETIREMENT INCOME SECURITY ACT OF 1974 ("ERISA") AND THE FEDERAL PENSION
 BENEFIT GUARANTY CORPORATION ("PBGC") SHALL PROVIDE THE FOLLOWING INFOR-
 MATION  TO  THE  RETIREES  PURSUANT TO REGULATIONS ADOPTED BY THE SUPER-
 INTENDENT:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09798-01-9
              

 S. 4864                             2
 
   (1) A CLEAR STATEMENT THAT PAYMENTS TO  ANNUITANTS  UNDER  AN  ANNUITY
 CONTRACT  ISSUED  PURSUANT TO THIS SECTION ARE EXEMPT FROM THE CLAIMS OF
 CREDITORS;
   (2) A STATEMENT THAT THE RETIREES WILL NO LONGER HAVE PROTECTION UNDER
 ERISA AND THE PBGC;
   (3)  THE  IDENTITY  AND  CONTACT INFORMATION FOR THE NEW YORK LIFE AND
 HEALTH INSURANCE GUARANTY ASSOCIATION, OR ANY SUBSTITUTE OR  REPLACEMENT
 GUARANTY  ASSOCIATION  THAT  PROVIDES COVERAGE TO ANNUITANTS RESIDING IN
 NEW YORK IN THE EVENT OF THE INSURER'S FINANCIAL IMPAIRMENT OR INSOLVEN-
 CY, AS SET FORTH ON A PUBLICLY AVAILABLE WEBSITE  SUCH  AS  THE  WEBSITE
 MAINTAINED  BY  THE  LIFE  INSURANCE COMPANY GUARANTY CORPORATION OF NEW
 YORK (WWW.NYLIFEGA.ORG); AND
   (4) MANDATORY ANNUAL DISCLOSURES TO ALL RETIREES  WHOSE  BENEFITS  ARE
 TRANSFERRED  TO AN INSURANCE COMPANY OR ALTERNATIVE BENEFIT PROVIDER FOR
 THE PURPOSE OF PROVIDING RETIREMENT BENEFITS, OF THE FOLLOWING:  FUNDING
 LEVELS  OF ALL ASSETS RELATIVE TO EXPECTED LIABILITIES UNDER THE ASSUMED
 PENSION BENEFIT  SCHEDULES,  INVESTMENT  PERFORMANCE  SUMMARY  BY  ASSET
 CLASS, INVESTMENT PERFORMANCE DETAIL BY ASSET CLASS, EXPENSES ASSOCIATED
 WITH  ANY  GROUP ANNUITY CONTRACT, AND CHANGES IN ACTUARIAL ASSUMPTIONS,
 IF ANY.
   (C) NO ALLOCATED OR UNALLOCATED GROUP ANNUITY CONTRACT  ISSUED  BY  AN
 INSURER  TO  AN  EMPLOYER OR AN EMPLOYEE DEFINED PENSION BENEFIT PLAN ON
 BEHALF OF AN EMPLOYER, FOR THE PURPOSE OF PROVIDING RETIREMENT  BENEFITS
 TO EMPLOYEES OR FORMER EMPLOYEES OF THE EMPLOYER, WHICH ANNUITY BENEFITS
 WILL NO LONGER BE PROTECTED UNDER THE FEDERAL EMPLOYEE RETIREMENT INCOME
 SECURITY  ACT  OF  1974  AND THE FEDERAL PENSION BENEFIT GUARANTY CORPO-
 RATION MAY BE FURTHER TRANSFERRED OR ASSUMED BY ANOTHER INSURER  WITHOUT
 CONFIRMATION  BY  THE SUPERINTENDENT THAT THE INSURER ASSUMING THE OBLI-
 GATIONS OF SUCH ALLOCATED OR UNALLOCATED GROUP ANNUITY CONTRACT HAS  THE
 FINANCIAL  STRENGTH TO FULFILL ITS OBLIGATIONS UNDER SUCH CONTRACT.  THE
 APPROPRIATE STANDARD TO BE APPLIED BY THE SUPERINTENDENT SHALL  BE  400%
 OF  COMPANY  ACTION  LEVEL  RISK BASED CAPITAL WITH NO NEGATIVE TREND AS
 DEFINED BY THE 2012 NAIC RISK-BASED CAPITAL  (RBC)  FOR  INSURERS  MODEL
 ACT.
   (D)  THE  PROCEEDS  OF  ANY  ALLOCATED  OR  UNALLOCATED  GROUP ANNUITY
 CONTRACT ISSUED BY AN INSURER TO AN  EMPLOYER  OR  AN  EMPLOYEE  DEFINED
 PENSION  BENEFIT  PLAN  ON  BEHALF  OF  AN  EMPLOYER, FOR THE PURPOSE OF
 PROVIDING RETIREMENT BENEFITS TO RETIREES OF THE EMPLOYER, WHICH ANNUITY
 BENEFITS WILL NO LONGER BE PROTECTED UNDER ERISA AND  THE  FEDERAL  PBGC
 SHALL  BE EXEMPT FROM APPLICATION TO THE SATISFACTION OF MONEY JUDGMENTS
 UNDER SECTION FIFTY-TWO HUNDRED FIVE  OF  THE  CIVIL  PRACTICE  LAW  AND
 RULES.
   § 2. Paragraph 2 of subdivision (l) of section 5205 of the civil prac-
 tice  law  and  rules,  as amended by chapter 24 of the laws of 2009, is
 amended to read as follows:
   2. For purposes of this article, "statutorily exempt  payments"  means
 any  personal  property exempt from application to the satisfaction of a
 money judgment under any provision of state or federal  law.  Such  term
 shall include, but not be limited to, payments from any of the following
 sources: social security, including retirement, survivors' and disabili-
 ty  benefits,  supplemental  security  income or child support payments;
 veterans administration benefits; public  assistance;  workers'  compen-
 sation;  unemployment  insurance;  public  or private pensions; railroad
 retirement; and black lung  benefits.    "STATUTORILY  EXEMPT  PAYMENTS"
 SHALL  SPECIFICALLY  INCLUDE  ANY  ANNUITY  PROCEEDS  WHOSE BENEFITS ARE
 TRANSFERRED TO AN INSURANCE COMPANY OR ALTERNATIVE BENEFIT PROVIDER  FOR

 S. 4864                             3
 
 THE  PURPOSE  OF PROVIDING RETIREMENT BENEFITS PURSUANT TO SECTION THREE
 THOUSAND TWO HUNDRED NINETEEN-A  OF  THE  INSURANCE  LAW  IN  A  PENSION
 DE-RISKING TRANSFER.
   § 3. This act shall take effect on the one hundred twentieth day after
 it shall have become a law and shall apply to all policies and contracts
 issued, renewed, modified, altered, or amended on or after such date.