NY State Senate Bill 2021-S8126

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 03, 2022	committed to rules
Apr 27, 2022	advanced to third reading
Apr 26, 2022	2nd report cal.
Apr 25, 2022	1st report cal.766
Jan 25, 2022	referred to insurance

Votes

- Apr 25, 2022 - Insurance Committee Vote
  S8126
  
  Aye
  
  11
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  
  0
  - - Insurance Committee Vote: Apr 25, 2022
      
      aye (11)
      
      Breslin
      
      Brooks
      
      Cooney
      
      Gounardes
      
      Harckham
      
      Helming
      
      Kennedy
      
      O'Mara
      
      Parker
      
      Sanders Jr.
      
      Serino

2021-S8126 (ACTIVE) - Details

See Assembly Version of this Bill:: A9330
Current Committee:: Senate Rules
Law Section:: Financial Services
Laws Affected:: Rpld Chap 124 of 1952
Versions Introduced in 2023-2024 Legislative Session:: S2679, A6347

2021-S8126 (ACTIVE) - Summary

Authorizes and empowers the College Retirement Equities Fund (CREF) to merge with the Teachers Insurance and Annuity Association (TIAA) with CREF ceasing to be a corporate entity and TIAA as the surviving entity.

2021-S8126 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8126

SPONSOR: BRESLIN
 
TITLE OF BILL:

An act in relation to authorizing and empowering CREF to combine with
TIAA, with TIAA continuing in existence as the surviving entity follow-
ing such combination and with CREF ceasing to be a corporate entity; and
to repeal chapter 124 of the laws of 1952, relating to incorporating the
college retirement equities fund for the benefit of the teaching profes-
sion

 
PURPOSE:

To allow for the combination of Teachers Insurance and Annuity Associ-
ation (TIAA) and the College Retirement Equities Fund (CREF).

 
SUMMARY OF PROVISIONS:

Section one provides for the repeal of Chapter 124 of the Laws of 1952
which established CREF. Section two establishes the definitions for this
act, which authorizes the combination of TIAA and CREF. Section three

authorizes the merger of TIAA and CREF, creates a new Separate account
within TIAA and establishes approvals by the respective TIAA and CREF
Boards of Governors and by the Department of Financial Services (DFS).
If approved by DFS, the plan of combination will be filed with the New
York County Clerk. Section four transfers all assets and liabilities,
including any causes of action or defenses, of CREF to TIAA. In addi-
tion, all contracts and certificates issued by CREF and in force at the
time of the combination, will become TIAA variable annuity contacts and
certificates and will be regulated by DFS through the newly created TIAA
Separate Account. Finally, section five provides the effective dates.

 
JUSTIFICATION:

TIAA was founded in 1918. In 1952, CREF was created as a companion
organization to TIAA through a special act of the Legislature to create
the world's first variable annuity. This legislation seeks to allow TIAA
to create a combined organization and continue its objective of modern-
izing the company for the benefit of its participants under the guidance
and oversight of DFS. This reorganization will have benefits for both
TIAA and CREF participants.

Currently, TIAA and CREF are governed under different statutory regimes
and we believe cannot be combined into one entity without an amendment
to CREF's enabling legislation. Our goal is to modernize and simplify
CREF's organizational structure. In the new structure, CREF will become
a separate account of TIAA regulated by DFS; this regulatory structure
is consistent with other insurance companies with separate accounts.
CREF's investments and operations will continue unchanged post the
proposed combination. In addition, CREF accounts will still be offered
"at-cost" without profit to TIAA. TIAA and CREF participants will also
benefit from operational efficiencies gained from streamlining the
organizational structure.

CREF participants will see a reduction in expenses when realized by TIAA
as a result of federal tax reduction attributes, deductions and foreign
tax credits which are only available to the combined entity.  Neither
TIAA nor CREF will be able to utilize this benefit without a combination
of the two entities. The conversion of CREF into a separate account of
TIAA will result in a simpler, more modern and more typical insurance
company and separate account structure and will eliminate the complex
regulatory anomaly of having TIM and CREF being legally independent but
closely aligned "companion" organizations. TIM, CREF and their partic-
ipants will benefit from this modernization effort as TIM emerges as a
more cost competitive entity which has a more transparent regulatory
framework.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

There are no fiscal impacts to the State.

 
EFFECTIVE DATE:
Effective immediately, except for section one which takes effect upon
filing DFS approval with the New York County Clerk.

2021-S8126 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8126
 
                             I N  S E N A T E
 
                             January 25, 2022
                                ___________
 
 Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT in relation to authorizing and empowering CREF  to  combine  with
   TIAA,  with  TIAA  continuing  in  existence  as  the surviving entity
   following such combination and with CREF ceasing  to  be  a  corporate
   entity;  and  to  repeal  chapter 124 of the laws of 1952, relating to
   incorporating the college retirement equities fund for the benefit  of
   the teaching profession
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Chapter 124 of the laws of 1952, relating to  incorporating
 the  college  retirement  equities  fund for the benefit of the teaching
 profession, is REPEALED.
   § 2. Definitions. For purposes of this act the following  terms  shall
 have the following meanings:
   (a)  "CREF"  shall  mean  the College Retirement Equities Fund, formed
 pursuant to chapter 124 of the laws of 1952 as a companion  organization
 to TIAA for the issuance of variable annuity contracts;
   (b) "CREF Board of Governors" shall mean the individuals designated as
 governors  of CREF, pursuant to chapter 124 of the laws of 1952, who are
 the sole members of CREF;
   (c) "Plan of Combination" shall mean the agreement and plan of  combi-
 nation  of  TIAA  and  CREF  adopted and approved in accordance with the
 provisions of this act;
   (d) "Superintendent" shall mean the superintendent  of  the  New  York
 state department of financial services;
   (e)  "TIAA"  shall mean the Teachers Insurance and Annuity Association
 of America, an insurance company formed pursuant  to  the  laws  of  New
 York;
   (f) "TIAA Board of Governors" shall mean the corporation formed pursu-
 ant  to  chapter 880 of the laws of 1937, which is the sole owner of the
 issued and outstanding stock of TIAA; and
   (g) "TIAA Separate Account" shall mean the separate  account  of  TIAA
 created in connection with the Plan of Combination.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD14451-01-2
 S. 8126                             2
 
   § 3. (a) Subject to the provisions of this act and the terms set forth
 in  the  Plan of Combination, CREF is hereby authorized and empowered to
 combine with TIAA, with TIAA continuing in existence  as  the  surviving
 entity  following  such combination and with CREF ceasing to be a corpo-
 rate  entity. TIAA shall continue to be an insurance company established
 pursuant to the laws of the state of New York. The TIAA Separate Account
 shall be subject to the insurance laws of the state  of  New  York,  and
 neither the combination nor any transactions contemplated by the Plan of
 Combination  shall  subject  TIAA,  as the surviving entity, or the TIAA
 Separate Account, to the not-for-profit corporation law. The TIAA  Board
 of Governors shall remain subject to the not-for-profit corporation law.
   (b)  Such  combination  shall be deemed a merger under the laws of the
 state of New York, including any laws applicable to insurance  companies
 or  not-for-profit  corporations, and shall be approved by not less than
 two-thirds of the individual governors of the CREF Board of Governors as
 the sole members of CREF, and not less than two-thirds of the individual
 members of the TIAA Board of Governors as the sole shareholder of  TIAA.
 Thereafter,  the  Plan  of  Combination shall be submitted to the Super-
 intendent for approval.  Following the receipt of all  necessary  corpo-
 rate  and  regulatory approvals, including authorization by the TIAA and
 CREF Boards of Governors and TIAA and CREF boards of trustees, a  certi-
 fied  copy  of  the  Plan of Combination with the approval of the Super-
 intendent endorsed thereon shall be filed in the office of the clerk  of
 New  York  County,  and  upon  such  filing the combination shall become
 effective.
   § 4. (a) At the effective time of and pursuant to the Plan of Combina-
 tion, all assets and liabilities of CREF including causes of action  and
 defenses  thereto, shall vest by operation of law in TIAA, and all vari-
 able annuity contracts and certificates issued by CREF and in  force  at
 the effective time of the combination, shall be and become TIAA variable
 annuity  contracts  and  certificates  as  of  the effective time of the
 combination; provided, however, that at the effective time of the combi-
 nation (i) without further act or deed, the assets  and  liabilities  of
 CREF  relating to the outstanding variable annuity contracts and certif-
 icates of CREF shall immediately be assets and liabilities of and  allo-
 cated  to the TIAA Separate Account without such assets becoming general
 account assets of TIAA; and (ii) each investment account of  CREF  imme-
 diately  prior  to  the combination shall comprise an investment sub-ac-
 count of the TIAA Separate Account, with the assets and  liabilities  of
 each  such  investment  account vesting immediately and directly in that
 investment sub-account.
   (b) At the effective time, TIAA shall assume the  obligations  of  the
 CREF  contracts  and certificates, and all holders of CREF contracts and
 certificates shall be notified of the combination.
   (c) At all times, the assets of the TIAA Separate Account, and of each
 investment sub-account, shall be  segregated  from  the  assets  of  the
 general  account of TIAA and any other TIAA separate account and invest-
 ment sub-account. That portion  of  the  assets  of  the  TIAA  Separate
 Account,  and of each investment sub-account, not exceeding the reserves
 and other contract liabilities with respect to the TIAA Separate Account
 and each investment sub-account, shall not be  chargeable  with  liabil-
 ities  arising  out of any other business of TIAA. The income, gains and
 losses, whether or not realized, from assets allocated to the TIAA Sepa-
 rate Account, and each investment sub-account, shall be credited  to  or
 charged  against  the  TIAA Separate Account and each investment sub-ac-
 count without regard to other income, gains or losses of TIAA.
 S. 8126                             3
 
   § 5. This act shall take effect immediately, provided,  however,  that
 section  one  of this act shall take effect at the effective time of the
 combination of TIAA and CREF pursuant to this act, and provided further,
 that the Superintendent of the New York state  department  of  financial
 services  shall notify the legislative bill drafting commission upon the
 occurrence of such effective time in order that the commission may main-
 tain an accurate and timely database of the official text of the laws of
 the State of New York in furtherance of effectuating the  provisions  of
 section  44  of the legislative law and section 70-b of the public offi-
 cers law.

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Senate Bill S8126

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

Apr 25, 2022 - Insurance Committee Vote

Insurance Committee Vote: Apr 25, 2022

2021-S8126 (ACTIVE) - Details

2021-S8126 (ACTIVE) - Summary

2021-S8126 (ACTIVE) - Sponsor Memo

2021-S8126 (ACTIVE) - Bill Text download pdf

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Sponsored By

Neil D. Breslin

Archive: Last Bill Status - In Senate Committee Rules Committee

Actions

Votes

2021-S8126 (ACTIVE) - Details

2021-S8126 (ACTIVE) - Summary

2021-S8126 (ACTIVE) - Sponsor Memo

2021-S8126 (ACTIVE) - Bill Text download pdf

Comments