NY State Senate Bill 2023-S9632

Current Bill Status - In Senate Committee Insurance 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 16, 2024	referred to insurance

2023-S9632 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §7013, Ins L

2023-S9632 (ACTIVE) - Summary

Enacts the "limited equity cooperative insurance captive authorization and county cap act" to enable limited equity cooperatives in the state of New York to establish insurance captives to enhance their ability to manage risks, improve insurance coverage, and promote financial stability.

2023-S9632 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9632

SPONSOR: JACKSON
 
TITLE OF BILL:

An act to amend the insurance law, in relation to enacting the "limited
equity cooperative insurance captive authorization and county cap act"

 
PURPOSE:

Enacts the "limited equity cooperative insurance captive authorization
and county cap act"

 
SUMMARY OF PROVISIONS:

Section 1 of the bill is title "limited equity cooperative insurance
captive authorization and county cap act"

Section two is the legislative purpose: The purpose of this act is to
enable limited equity cooperatives in the state of New York to establish
insurance captives to enhance their ability to manage risks, improve
insurance coverage, and promote financial stability.  Furthermore, it

aims to prevent concentration of risk by capping the number of insurance
captives that limited equity cooperatives can establish to one per coun-
ty.

Section 3 amends insurance law by adding a new section 7013 to authorize
the limited equity cooperatives in the state of New York.

Section 4 is Severability clause - If any clause, sentence, paragraph,
section or part of this act shall be adjudged by any court of competent
jurisdiction to be invalid and after exhaustion of all further judicial
review, the judgment shall not affect, impair or invalidate the remain-
der thereof, but shall be confined in its operation to the clause,
sentence, paragraph, section or part of this act directly involved in
the controversy in which the judgment shall have been rendered.

Section 5 is the enactment clause.

 
JUSTIFICATION:

Limited equity cooperatives, like any other organization, face various
risks ranging from property damage to liability claims. By establishing
insurance captives, these cooperatives can effectively manage their
risks by tailoring insurance coverage to their specific needs. Captives
allow them to have more control over their insurance programs, poten-
tially leading to better coverage and lower costs.

Improved Insurance Coverage: Traditional insurance options may not
always adequately address the unique needs of limited equity cooper-
atives. By establishing captives, these cooperatives can design insur-
ance policies that align closely with their risk profiles and opera-
tional requirements. This can result in improved coverage tailored
specifically to the cooperative's circumstances, ensuring better
protection against potential losses.

Promotion of Financial Stability: Insurance captives can contribute to
the financial stability of limited equity cooperatives by providing a
reliable mechanism for managing risks and securing adequate insurance
coverage. With greater control over their insurance programs, cooper-
atives can mitigate the impact of unexpected events, thereby enhancing
their financial resilience and sustainability.

 
LEGISLATIVE HISTORY:

New Legislation

 
STATE AND LOCAL FISCAL IMPLICATIONS:

N/A

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law. Effective immediately, the
addition, amendment and/or repeal of any rule or regulation necessary
for the implementation of this act on its effective date are authorized
to be made and completed on or before such effective date.

2023-S9632 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9632
 
                             I N  S E N A T E
 
                               May 16, 2024
                                ___________
 
 Introduced  by  Sen. JACKSON -- 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 enacting the  "limited
   equity cooperative insurance captive authorization and county cap act"
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Short title. This act shall be known and may  be  cited  as
 the  "limited  equity  cooperative  insurance  captive authorization and
 county cap act".
   § 2. Legislative purpose and findings. The purpose of this act  is  to
 enable limited equity cooperatives in the state of New York to establish
 insurance  captives  to  enhance  their ability to manage risks, improve
 insurance coverage, and promote  financial  stability.  Furthermore,  it
 aims to prevent concentration of risk by capping the number of insurance
 captives that limited equity cooperatives can establish to one per coun-
 ty.
   § 3. The insurance law is amended by adding a new section 7013 to read
 as follows:
   §  7013.  LIMITED EQUITY COOPERATIVE INSURANCE CAPTIVE. (A) AS USED IN
 THIS SECTION, THE TERM "LIMITED EQUITY COOPERATIVE" SHALL MEAN A LIMITED
 EQUITY COOPERATIVE ORGANIZED AS A  NONPROFIT  HOUSING  DEVELOPMENT  FUND
 COMPANY PURSUANT TO ARTICLE ELEVEN OF THE PRIVATE HOUSING FINANCE LAW.
   (B)  LIMITED  EQUITY  COOPERATIVES  ARE HEREBY AUTHORIZED TO ESTABLISH
 INSURANCE CAPTIVES FOR THE PURPOSE OF PROVIDING  INSURANCE  COVERAGE  TO
 THEIR MEMBERS AND MANAGING RELATED RISKS.  NO LIMITED EQUITY COOPERATIVE
 SHALL  HOLD  MORE THAN THIRTY PERCENT OF ITS RISK IN THE SAME COUNTY AND
 SHALL HOLD NO MORE THAN SIXTY PERCENT OF ITS RISK IN NEW  YORK  CITY.  A
 LIMITED  EQUITY  COOPERATIVE  INSURANCE CAPTIVE SHALL HAVE NO FEWER THAN
 TEN THOUSAND UNITS UNDER ITS RISK MANAGEMENT.
   (C) THE LIMITED EQUITY  COOPERATIVE  SHALL  CREATE  AND  ORGANIZE  THE
 INSURANCE  CAPTIVE  IN ACCORDANCE WITH THE REQUIREMENTS SET FORTH BY THE
 DEPARTMENT AND OTHER APPLICABLE  LAWS  AND  REGULATIONS.  ANY  INSURANCE
 CAPTIVE  ESTABLISHED PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL BE
 SUBJECT TO OVERSIGHT AND REGULATION BY THE DEPARTMENT.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD14162-02-4
 S. 9632                             2
 
   (D) AN INSURANCE CAPTIVE ESTABLISHED PURSUANT  TO  THE  PROVISIONS  OF
 THIS  SECTION  SHALL  BE  OPERATED AS A DISTINCT ENTITY FROM THE LIMITED
 EQUITY COOPERATIVE ITSELF, MAINTAINING SEPARATE  FINANCIAL  RECORDS  AND
 ACCOUNTS.
   (E)  A LIMITED EQUITY COOPERATIVE INSURANCE CAPTIVE MAY OFFER COVERAGE
 FOR PROPERTY AND CASUALTY RISKS, LIABILITY RISKS, AND  ANY  OTHER  RISKS
 DEEMED APPROPRIATE BY THE DEPARTMENT, SUBJECT TO APPROVAL OF THE DEPART-
 MENT.
   (F) A LIMITED EQUITY COOPERATIVE INSURANCE CAPTIVE SHALL ADHERE TO ALL
 SOLVENCY REQUIREMENTS AND FINANCIAL STANDARDS ESTABLISHED BY DEPARTMENT,
 ENSURING  ITS  ABILITY TO MEET THE INSURANCE NEEDS OF THE LIMITED EQUITY
 COOPERATIVE MEMBERS.
   (G) PARTICIPATION IN THE LIMITED EQUITY COOPERATIVE INSURANCE  CAPTIVE
 BY  LIMITED  EQUITY  COOPERATIVE  MEMBERS SHALL BE VOLUNTARY. ANY MEMBER
 OPTING TO PARTICIPATE SHALL CONTRIBUTE TO THE LIMITED EQUITY COOPERATIVE
 INSURANCE CAPTIVE'S CAPITAL AND PREMIUM  RESERVES  AS  REQUIRED  BY  THE
 CAPTIVE'S POLICIES AND PROCEDURES.
   (H)  THE  INSURANCE CAPTIVE SHALL BE SUBJECT TO PERIODIC FINANCIAL AND
 OPERATIONAL EXAMINATIONS BY THE DEPARTMENT  TO  ENSURE  COMPLIANCE  WITH
 APPLICABLE LAWS AND REGULATIONS.
   (I)  THE DEPARTMENT SHALL ESTABLISH REPORTING REQUIREMENTS FOR LIMITED
 EQUITY COOPERATIVES OPERATING  INSURANCE  CAPTIVES,  INCLUDING  BUT  NOT
 LIMITED TO FINANCIAL STATEMENTS, RISK ASSESSMENTS, AND CLAIMS DATA.
   (J)  THE  DEPARTMENT SHALL PROMULGATE ALL RULES AND REGULATIONS NECES-
 SARY FOR THE IMPLEMENTATION OF THIS SECTION.
   § 4. Severability. If any clause, sentence, paragraph, section or part
 of this act shall be adjudged by any court of competent jurisdiction  to
 be  invalid  and  after  exhaustion  of all further judicial review, the
 judgment shall not affect, impair or invalidate the  remainder  thereof,
 but  shall  be  confined in its operation to the clause, sentence, para-
 graph, section or part of this act directly involved in the  controversy
 in which the judgment shall have been rendered.
   §  5. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law. Effective immediately,
 the addition, amendment and/or repeal of any rule or  regulation  neces-
 sary  for  the  implementation  of  this  act  on its effective date are
 authorized to be made and completed on or before such effective date.

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Senate Bill S9632

Sponsored By

Current Bill Status - In Senate Committee Insurance Committee

2023-S9632 (ACTIVE) - Details

2023-S9632 (ACTIVE) - Summary

2023-S9632 (ACTIVE) - Sponsor Memo

2023-S9632 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S9632

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Sponsored By

Robert Jackson

Current Bill Status - In Senate Committee Insurance Committee

2023-S9632 (ACTIVE) - Details

2023-S9632 (ACTIVE) - Summary

2023-S9632 (ACTIVE) - Sponsor Memo

2023-S9632 (ACTIVE) - Bill Text download pdf

Comments