S T A T E O F N E W Y O R K
________________________________________________________________________
10090
I N A S S E M B L Y
January 30, 2026
___________
Introduced by M. of A. WEPRIN -- read once and referred to the Committee
on Insurance
AN ACT to amend the insurance law, in relation to administrative super-
vision
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings. In order to increase the authority of
the superintendent of financial services to respond to the harm posed by
impaired insurers in this state, the legislature finds that it is in the
best interest of the people of this state to enact an administrative
supervision statute. The superintendent of financial services has the
right and responsibility to enforce the insurance law and the authority
to seek redress against any person responsible for the impairment or
insolvency of the insurer, and nothing in this act is intended to
restrict or limit such right, responsibility, or authority.
§ 2. The insurance law is amended by adding a new section 1125 to read
as follows:
§ 1125. ADMINISTRATIVE SUPERVISION. (A)(1) THE SUPERINTENDENT MAY
ISSUE AN ORDER PLACING A DOMESTIC INSURER UNDER ADMINISTRATIVE SUPER-
VISION IF THE SUPERINTENDENT DETERMINES THAT ONE OR MORE OF THE CONDI-
TIONS SET FORTH IN SUBSECTION (B) OF THIS SECTION EXISTS. UPON SUCH A
DETERMINATION, THE SUPERINTENDENT SHALL FURNISH THE INSURER WITH A WRIT-
TEN LIST OF REQUIREMENTS TO ABATE THE CONDITION OR CONDITIONS WITHIN THE
TIME SPECIFIED IN THE ORDER, WHICH SHALL BE SIXTY DAYS OR ANOTHER PERIOD
OF TIME AS DESIGNATED BY THE SUPERINTENDENT. THE DOMESTIC INSURER MAY
CHALLENGE THE ORDER BY REQUESTING AN ADMINISTRATIVE HEARING PURSUANT TO
THE ADJUDICATORY PROCEEDING RULES IN ARTICLE THREE OF THE STATE ADMINIS-
TRATIVE PROCEDURE ACT. UPON ISSUANCE OF THE ORDER, THE SUPERINTENDENT
SHALL ADVISE SUCH DOMESTIC INSURER OF ITS RIGHT TO REQUEST A HEARING
CHALLENGING THE ORDER PURSUANT TO THE ADJUDICATORY PROCEEDING RULES IN
ARTICLE THREE OF THE STATE ADMINISTRATIVE PROCEDURE ACT AND REGULATIONS
PROMULGATED BY THE SUPERINTENDENT.
(2) IF, AT THE END OF THE PERIOD SPECIFIED IN THE ORDER, THE SUPER-
INTENDENT DETERMINES THAT THE CONDITION OR CONDITIONS THAT GAVE RISE TO
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13211-01-5
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THE ORDER STILL EXISTS OR EXIST, THEN ADMINISTRATIVE SUPERVISION SHALL
CONTINUE. THE INSURER MAY REQUEST A HEARING TO CHALLENGE THE SUPERINTEN-
DENT'S DETERMINATION TO CONTINUE ADMINISTRATIVE SUPERVISION.
(3) IF THE SUPERINTENDENT DETERMINES THAT THE CONDITION OR CONDITIONS
THAT GAVE RISE TO ADMINISTRATIVE SUPERVISION NO LONGER EXISTS OR EXIST,
THEN THE SUPERINTENDENT SHALL RELEASE THE INSURER FROM SUPERVISION.
(B) (1) AN INSURER MAY BE SUBJECT TO ADMINISTRATIVE SUPERVISION BY THE
SUPERINTENDENT IF UPON EXAMINATION OR ANY OTHER TIME IT APPEARS IN THE
SUPERINTENDENT'S DISCRETION THAT:
(A) THE INSURER'S CONDITION RENDERS THE CONTINUANCE OF ITS BUSINESS
HAZARDOUS TO THE PUBLIC OR TO ITS INSUREDS;
(B) THE INSURER HAS OR APPEARS TO HAVE EXCEEDED ITS POWERS, AS THAT
TERM IS DEFINED IN PARAGRAPH TWO OF THIS SUBSECTION, GRANTED UNDER ITS
CHARTER AND APPLICABLE LAW;
(C) THE INSURER HAS FAILED TO COMPLY WITH THE APPLICABLE PROVISIONS OF
THIS CHAPTER;
(D) THE BUSINESS OF THE INSURER IS BEING CONDUCTED FRAUDULENTLY; OR
(E) THE INSURER GIVES ITS CONSENT.
(2) THE TERM "EXCEEDED ITS POWERS" MEANS ANY ONE OR MORE OF THE
FOLLOWING CONDITIONS:
(A) THE INSURER HAS REFUSED TO PERMIT EXAMINATION OF ITS BOOKS,
PAPERS, ACCOUNTS, RECORDS OR AFFAIRS BY THE SUPERINTENDENT OR THE SUPER-
INTENDENT'S DEPUTIES, EMPLOYEES OR DULY COMMISSIONED EXAMINERS;
(B) A DOMESTIC INSURER HAS UNLAWFULLY REMOVED FROM THIS STATE BOOKS,
PAPERS, ACCOUNTS OR RECORDS NECESSARY FOR AN EXAMINATION OF THE INSURER;
(C) THE INSURER HAS FAILED TO PROMPTLY COMPLY WITH THE APPLICABLE
FINANCIAL REPORTING STATUTES OR RULES AND DEPARTMENTAL REQUESTS RELATING
THERETO;
(D) THE INSURER HAS NEGLECTED OR REFUSED TO OBSERVE AN ORDER BY THE
SUPERINTENDENT TO MAKE GOOD, WITHIN THE TIME PRESCRIBED BY LAW, ANY
PROHIBITED DEFICIENCY IN ITS CAPITAL, CAPITAL STOCK OR SURPLUS;
(E) THE INSURER IS CONTINUING TO TRANSACT INSURANCE OR WRITE BUSINESS
AFTER ITS LICENSE HAS BEEN REVOKED OR SUSPENDED BY THE SUPERINTENDENT;
(F) THE INSURER, BY CONTRACT OR OTHERWISE, HAS UNLAWFULLY OR HAS IN
VIOLATION OF AN ORDER OF THE SUPERINTENDENT OR HAS WITHOUT FIRST HAVING
OBTAINED WRITTEN APPROVAL OF THE SUPERINTENDENT IF APPROVAL IS REQUIRED
BY LAW: (I) TOTALLY REINSURED ITS ENTIRE OUTSTANDING BUSINESS; OR (II)
MERGED OR CONSOLIDATED SUBSTANTIALLY ITS ENTIRE PROPERTY OR BUSINESS
WITH ANOTHER INSURER;
(G) THE INSURER ENGAGED IN ANY TRANSACTION IN WHICH IT IS NOT AUTHOR-
IZED TO ENGAGE UNDER THE LAWS OF THIS STATE; OR
(H) THE INSURER REFUSED TO COMPLY WITH A LAWFUL ORDER OF THE SUPER-
INTENDENT.
(3) THE TERM "CONSENT" MEANS AGREEMENT TO ADMINISTRATIVE SUPERVISION
BY THE INSURER.
(C) DURING THE PERIOD OF SUPERVISION, THE SUPERINTENDENT MAY PROHIBIT
THE INSURER FROM ENGAGING IN ANY OF THE FOLLOWING ACTIVITIES WITHOUT THE
SUPERINTENDENT'S PRIOR APPROVAL:
(1) DISPOSING OF, CONVEYING, OR ENCUMBERING ANY OF ITS ASSETS OR ITS
BUSINESS IN FORCE;
(2) WITHDRAWING ANY FUNDS FROM ITS BANK ACCOUNTS;
(3) LENDING ANY OF ITS FUNDS;
(4) INVESTING ANY OF ITS FUNDS;
(5) PAYING ANY CLAIMS;
(6) TRANSFERRING ANY OF ITS PROPERTY;
(7) INCURRING ANY DEBT, OBLIGATION, OR LIABILITY;
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(8) MERGING OR CONSOLIDATING WITH ANOTHER COMPANY;
(9) APPROVING NEW PREMIUMS OR RENEWING ANY POLICIES;
(10) ENTERING INTO ANY NEW REINSURANCE CONTRACT OR TREATY;
(11) TERMINATING, SURRENDERING, FORFEITING, CONVERTING, OR LAPSING ANY
INSURANCE POLICY, CERTIFICATE, OR CONTRACT, EXCEPT FOR NONPAYMENT OF
PREMIUMS DUE;
(12) RELEASING, PAYING, OR REFUNDING PREMIUM DEPOSITS, ACCRUED CASH OR
LOAN VALUES, UNEARNED PREMIUMS, OR OTHER RESERVES ON ANY INSURANCE POLI-
CY, CERTIFICATE, OR CONTRACT;
(13) MAKING ANY MATERIAL CHANGE IN MANAGEMENT; OR
(14) INCREASING SALARIES AND BENEFITS OF OFFICERS OR DIRECTORS OR THE
PAYMENT OF BONUSES, DIVIDENDS, OR OTHER PAYMENTS.
(D) THE SUPERINTENDENT MAY APPOINT AS ADMINISTRATIVE SUPERVISOR, AT
THE INSURER'S EXPENSE, ONE OR MORE PERSONS NOT EMPLOYED BY ANY INSURER
OR INTERESTED IN SUCH INSURER, EXCEPT AS A POLICYHOLDER.
(E) DURING THE PERIOD OF ADMINISTRATIVE SUPERVISION, AN INSURER MAY
CONTEST AN ACTION TAKEN OR PROPOSED TO BE TAKEN BY THE SUPERINTENDENT OR
BY THE ADMINISTRATIVE SUPERVISOR ON THE GROUNDS THAT THE ACTION OR
PROPOSED ACTION WOULD NOT RESULT IN IMPROVING THE CONDITION OF THE
INSURER. DENIAL OF THE INSURER'S REQUEST UPON RECONSIDERATION MAY BE
CHALLENGED BY THE INSURER BY REQUESTING AN ADMINISTRATIVE HEARING PURSU-
ANT TO THE ADJUDICATORY PROCEEDING RULES IN ARTICLE THREE OF THE STATE
ADMINISTRATIVE PROCEDURE ACT.
(F) (1) THE EXPENSES OF ADMINISTRATIVE SUPERVISION PURSUANT TO THIS
SECTION SHALL BE BORNE AND PAID BY THE INSURER SO SUPERVISED.
(2) IN THE EVENT THAT AN INSURER BECOMES SUBJECT TO A PROCEEDING UNDER
ARTICLE SEVENTY-FOUR OF THIS CHAPTER WITHIN ONE YEAR OF THE SUPERINTEN-
DENT RELEASING THE INSURER FROM ADMINISTRATIVE SUPERVISION, ALL ACCRUED
AND OUTSTANDING EXPENSES INCURRED IN CONNECTION WITH ADMINISTRATIVE
SUPERVISION SHALL BE TREATED AS ACTUAL AND NECESSARY COSTS AND EXPENSES
OF THE ADMINISTRATION OF SUCH PROCEEDING UNDER ARTICLE SEVENTY-FOUR OF
THIS CHAPTER.
(G) (1) NOTWITHSTANDING ANY OTHER SECTION OF LAW AND EXCEPT AS SET
FORTH IN THIS SECTION, PROCEEDINGS, HEARINGS, NOTICES, CORRESPONDENCE,
REPORTS, AND OTHER INFORMATION IN THE POSSESSION OF THE SUPERINTENDENT
OR DEPARTMENT RELATING TO THE SUPERVISION OF ANY INSURER SHALL BE CONFI-
DENTIAL AND NOT SUBJECT TO SUBPOENA OR PUBLIC INSPECTION UNDER ARTICLE
SIX OF THE PUBLIC OFFICERS LAW OR ANY OTHER STATUTE, AND SHALL NOT BE
SUBJECT TO DISCOVERY OR ADMISSIBLE IN EVIDENCE IN ANY PRIVATE CIVIL
ACTION, EXCEPT AS PROVIDED IN THIS SECTION; PROVIDED, HOWEVER, THAT THE
SUPERINTENDENT IS AUTHORIZED TO USE THE DOCUMENTS, MATERIALS, OR OTHER
INFORMATION IN THE FURTHERANCE OF ANY REGULATORY OR LEGAL ACTION BROUGHT
AS PART OF THE SUPERINTENDENT'S OFFICIAL DUTIES.
(2) THE SUPERINTENDENT MAY SHARE THE NOTICES, CORRESPONDENCE, REPORTS,
RECORDS, OR INFORMATION PURSUANT TO SECTION ONE HUNDRED TEN OF THIS
CHAPTER.
(3) THE SUPERINTENDENT MAY OPEN THE PROCEEDINGS OR HEARINGS OR MAKE
PUBLIC THE NOTICES, CORRESPONDENCE, REPORTS, RECORDS, OR OTHER INFORMA-
TION IF THE SUPERINTENDENT DEEMS THAT IT IS IN THE BEST INTEREST OF THE
PUBLIC OR IN THE BEST INTEREST OF THE INSURER, ITS INSUREDS, CREDITORS,
OR THE GENERAL PUBLIC.
(4) THIS SUBSECTION SHALL NOT APPLY TO HEARINGS, NOTICES, CORRESPOND-
ENCE, REPORTS, RECORDS, OR OTHER INFORMATION OBTAINED UPON THE APPOINT-
MENT OF A RECEIVER FOR THE INSURER BY A COURT OF COMPETENT JURISDICTION.
(H) NOTHING IN THIS SECTION SHALL BE CONSTRUED AS PRECLUDING THE
SUPERINTENDENT FROM INITIATING JUDICIAL PROCEEDINGS TO PLACE AN INSURER
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IN REHABILITATION, LIQUIDATION, CONSERVATION, OR DISSOLUTION
PROCEEDINGS.
(I) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE SUPERINTENDENT MAY
MEET WITH A SUPERVISOR APPOINTED UNDER THIS SECTION AND WITH THE ATTOR-
NEY OR OTHER REPRESENTATIVE OF THE SUPERVISOR, WITHOUT THE PRESENCE OF
ANY OTHER PERSON, AT THE TIME OF ANY PROCEEDING OR DURING THE PENDENCY
OF ANY PROCEEDING HELD UNDER AUTHORITY OF THIS SECTION TO CARRY OUT THE
SUPERINTENDENT'S DUTIES UNDER THIS SECTION OR FOR THE SUPERVISOR TO
CARRY OUT THE SUPERVISOR'S DUTIES UNDER THIS SECTION.
§ 3. Subsection (a) of section 1309 of the insurance law is amended to
read as follows:
(a) Whenever the superintendent finds from a financial statement or
report on examination that an authorized insurer is unable to pay its
outstanding lawful obligations as they mature in the regular course of
business, as shown by an excess of required reserves and other liabil-
ities over admitted assets, or by its not having sufficient assets to
reinsure all outstanding risks with other solvent authorized assuming
insurers after paying all accrued claims owed, such insurer shall be
deemed insolvent and the superintendent may proceed against it pursuant
to the provisions of article seventy-four of this chapter OR MAY PLACE
THE INSURER UNDER ADMINISTRATIVE SUPERVISION PURSUANT TO SECTION ONE
THOUSAND ONE HUNDRED TWENTY-FIVE OF THIS CHAPTER.
§ 4. Subsection (a) of section 1310 of the insurance law is amended to
read as follows:
(a) Whenever the superintendent finds from a financial statement, or a
report on examination, of any domestic stock insurer that [(i)] (1) the
admitted assets are less than the aggregate amount of its liabilities
and outstanding capital stock or [(ii)] (2) the admitted assets of any
such insurer [which] THAT is required to maintain a minimum surplus to
policyholders are less than the aggregate amount of its liabilities and
the amount of its minimum surplus to policyholders, [he] THE SUPERINTEN-
DENT shall determine the amount of the impairment and order the insurer
to eliminate the impairment within such period as [he] THE SUPERINTEN-
DENT designates, not more than ninety days from the service of the
order. [He] THE SUPERINTENDENT may also order the insurer not to issue
any new policies while the impairment exists. If the impairment as
determined by the provisions of [item (i) hereof] PARAGRAPH ONE OF THIS
SUBSECTION equals or exceeds twenty-five percent of the insurer's
outstanding capital stock, or as determined by the provisions of [item
(i) or (ii) hereof] PARAGRAPH ONE OR TWO OF THIS SUBSECTION is such that
the insurer does not have the minimum capital or minimum surplus to
policyholders required by this chapter, and if at the expiration of such
designated period, such insurer has not satisfied the superintendent
that such impairment has been eliminated, the superintendent may proceed
against the insurer pursuant to the provisions of article seventy-four
of this chapter on the ground that its condition is such that its
further transaction of business will be hazardous to its policyholders
or its creditors or the public OR THE SUPERINTENDENT MAY PLACE THE
INSURER UNDER ADMINISTRATIVE SUPERVISION PURSUANT TO SECTION ONE THOU-
SAND ONE HUNDRED TWENTY-FIVE OF THIS CHAPTER.
§ 5. Subsection (c) of section 1311 of the insurance law is amended to
read as follows:
(c) If the impairment so determined is such that such insurer does not
have the minimum surplus required for item (iii) of subsection (a) here-
of, and if when such designated period expires the insurer has not
satisfied the superintendent that such impairment has been eliminated,
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THEN the superintendent may proceed against such insurer pursuant to the
provisions of article seventy-four of this chapter on the ground that
its further transaction of business will be hazardous to its policyhold-
ers, its creditors or the public OR THE SUPERINTENDENT MAY PLACE THE
INSURER UNDER ADMINISTRATIVE SUPERVISIONS PURSUANT TO SECTION ONE THOU-
SAND ONE HUNDRED TWENTY-FIVE OF THIS CHAPTER.
§ 6. Paragraph 2 of subsection (c) of section 1312 of the insurance
law is amended to read as follows:
(2) If at the expiration of such designated period such insurer has
not satisfied the superintendent that such impairment has been elimi-
nated, the superintendent may proceed against such insurer pursuant to
the provisions of article seventy-four of this chapter as an insurer
whose condition is such that its further transaction of business in the
United States will be hazardous to its policyholders, its creditors or
the public in the United States OR THE SUPERINTENDENT MAY PLACE THE
INSURER UNDER ADMINISTRATIVE SUPERVISION PURSUANT TO SECTION ONE THOU-
SAND ONE HUNDRED TWENTY-FIVE OF THIS CHAPTER.
§ 7. This act shall take effect immediately.