Senate Bill S1022

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1022
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 8, 2025
                                ___________
 
 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02938-01-5
              

 S. 1022                             2
 
   (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.
   (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.