S T A T E O F N E W Y O R K
________________________________________________________________________
7987
2021-2022 Regular Sessions
I N A S S E M B L Y
June 4, 2021
___________
Introduced by M. of A. CUSICK -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, the public authorities law and the
tax law, in relation to authorizing the power authority of the state
of New York to form a pure captive insurance company
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subsections (e) and (g) of section 7002 of the insurance
law, as amended by chapter 188 of the laws of 2003, are amended to read
as follows:
(e) "Industrial insured" means an insured:
(1) whose net worth exceeds one hundred million dollars;
(2) who is a member of a holding company system whose net worth
exceeds one hundred million dollars;
(3) who is the metropolitan transportation authority and its statutory
subsidiaries. When filing an application to form a pure captive insur-
ance company the metropolitan transportation authority shall submit
written notice of such filing to the governor, the temporary president
of the senate and the speaker of the assembly; [or]
(4) WHO IS THE POWER AUTHORITY OF THE STATE OF NEW YORK AND ANY STATU-
TORY SUBSIDIARY THEREOF. WHEN FILING AN APPLICATION TO FORM A PURE
CAPTIVE INSURANCE COMPANY THE POWER AUTHORITY SHALL SUBMIT WRITTEN
NOTICE OF SUCH FILING TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE
SENATE AND THE SPEAKER OF THE ASSEMBLY; OR
(5) who is a city with a population of one million or more. When
filing an application to form a pure captive insurance company, a city
with a population of one million or more shall submit written notice of
such filing to the governor, the temporary president of the senate and
the speaker of the assembly.
(g) "Industrial insured group" means any group of unaffiliated indus-
trial insureds that are engaged in similar or related businesses or
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD12024-01-1
A. 7987 2
activities, however, the metropolitan transportation authority, THE
POWER AUTHORITY OF THE STATE OF NEW YORK AND ANY STATUTORY SUBSIDIARY
THEREOF and cities with a population of one million or more shall not be
a member of an industrial insured group, and that collectively:
(1) own, control or hold with power to vote all of the outstanding
voting shares of stock of a group captive insurance company incorporated
as a stock insurer; or
(2) represent one hundred percent of the voting members of a group
captive insurance company organized as a mutual insurer.
§ 2. Section 1005 of the public authorities law is amended by adding a
new subdivision 28 to read as follows:
28. THE AUTHORITY MAY ESTABLISH A SUBSIDIARY CORPORATION FOR THE
PURPOSE OF FORMING A PURE CAPTIVE INSURANCE COMPANY AS PROVIDED IN
SECTION SEVEN THOUSAND TWO OF THE INSURANCE LAW. THE MEMBERS OF SUCH
SUBSIDIARY CORPORATION OF THE AUTHORITY SHALL BE THE SAME PERSONS HOLD-
ING THE OFFICES OF MEMBERS OF THE AUTHORITY. THE EMPLOYEES OF ANY SUCH
SUBSIDIARY CORPORATION, EXCEPT THOSE WHO ARE ALSO EMPLOYEES OF THE
AUTHORITY, SHALL NOT BE DEEMED EMPLOYEES OF THE AUTHORITY.
§ 3. Subdivision (a) of section 1500 of the tax law, as amended by
section 21 of part A of chapter 59 of the laws of 2014, is amended to
read as follows:
(a) The term "insurance corporation" includes a corporation, associ-
ation, joint stock company or association, person, society, aggregation
or partnership, by whatever name known, doing an insurance business,
and, notwithstanding the provisions of section fifteen hundred twelve of
this article, shall include (1) a risk retention group as defined in
subsection (n) of section five thousand nine hundred two of the insur-
ance law, (2) the state insurance fund and (3) a corporation, associ-
ation, joint stock company or association, person, society, aggregation
or partnership doing an insurance business as a member of the New York
insurance exchange described in section six thousand two hundred one of
the insurance law. The definition of the "state insurance fund"
contained in this subdivision shall be limited in its effect to the
provisions of this article and the related provisions of this chapter
and shall have no force and effect other than with respect to such
provisions. The term "insurance corporation" shall also include a
captive insurance company doing a captive insurance business, as defined
in subsections (c) and (b), respectively, of section seven thousand two
of the insurance law; provided, however, "insurance corporation" shall
not include the metropolitan transportation authority, THE POWER AUTHOR-
ITY OF NEW YORK OR ANY STATUTORY SUBSIDIARY THEREOF, or a public benefit
corporation or not-for-profit corporation formed by a city with a popu-
lation of one million or more pursuant to subsection (a) of section
seven thousand five of the insurance law, each of which is expressly
exempt from the payment of fees, taxes or assessments, whether state or
local; and provided further "insurance corporation" does not include any
combinable captive insurance company. The term "insurance corporation"
shall also include an unauthorized insurer operating from an office
within the state, pursuant to paragraph five of subsection (b) of
section one thousand one hundred one and subsection (i) of section two
thousand one hundred seventeen of the insurance law. The term "insurance
corporation" also includes a health maintenance organization required to
obtain a certificate of authority under article forty-four of the public
health law.
A. 7987 3
§ 4. Subdivision (a) of section 1502-b of the tax law, as amended by
section 22 of part A of chapter 59 of the laws of 2014, is amended to
read as follows:
(a) In lieu of the taxes and tax surcharge imposed by sections fifteen
hundred one, fifteen hundred two-a, fifteen hundred five-a, and fifteen
hundred ten of this article, every captive insurance company licensed by
the superintendent of financial services pursuant to the provisions of
article seventy of the insurance law, other than the metropolitan trans-
portation authority, THE POWER AUTHORITY OF NEW YORK OR ANY STATUTORY
SUBSIDIARY THEREOF, and a public benefit corporation or not-for-profit
corporation formed by a city with a population of one million or more
pursuant to subsection (a) of section seven thousand five of the insur-
ance law, each of which is expressly exempt from the payment of fees,
taxes or assessments whether state or local, and other than combinable
captive insurance company, shall, for the privilege of exercising its
corporate franchise, pay a tax on (1) all gross direct premiums, less
return premiums thereon, written on risks located or resident in this
state and (2) all assumed reinsurance premiums, less return premiums
thereon, written on risks located or resident in this state. The rate of
the tax imposed on gross direct premiums shall be four-tenths of one
percent on all or any part of the first twenty million dollars of premi-
ums, three-tenths of one percent on all or any part of the second twenty
million dollars of premiums, two-tenths of one percent on all or any
part of the third twenty million dollars of premiums, and seventy-five
thousandths of one percent on each dollar of premiums thereafter. The
rate of the tax on assumed reinsurance premiums shall be two hundred
twenty-five thousandths of one percent on all or any part of the first
twenty million dollars of premiums, one hundred and fifty thousandths of
one percent on all or any part of the second twenty million dollars of
premiums, fifty thousandths of one percent on all or any part of the
third twenty million dollars of premiums and twenty-five thousandths of
one percent on each dollar of premiums thereafter. The tax imposed by
this section shall be equal to the greater of (i) the sum of the tax
imposed on gross direct premiums and the tax imposed on assumed reinsur-
ance premiums or (ii) five thousand dollars.
§ 5. This act shall take effect immediately.