Relates to risk based capital for property/casualty insurers and reports filed by the superintendent of financial services.

Sponsor: SEWARD
Law Section: Insurance Law / Law: Amd S1324, rpld S206, Ins L; rpld S43, Bank L; add S207, Fin Serv L

S6710-2011 Actions

Jun 19, 2012: SUBSTITUTED BY A10391A
Jun 4, 2012: AMENDED ON THIRD READING 6710A
Mar 30, 2012: ADVANCED TO THIRD READING
Mar 29, 2012: 2ND REPORT CAL.
Mar 28, 2012: 1ST REPORT CAL.475
Mar 19, 2012: REPORTED AND COMMITTED TO BANKS
Mar 12, 2012: REFERRED TO INSURANCE

S6710-2011 Meetings

Banks: Mar 28, 2012, Insurance: Mar 19, 2012

S6710-2011 Calendars

S6710-2011 Votes

VOTE: COMMITTEE VOTE: - Insurance - Mar 19, 2012

Ayes (17): Seward, Flanagan, Golden, Grisanti, Lanza, Larkin, LaValle, Martins, Saland, Young, Breslin, Diaz, Espaillat, Kennedy, Parker, Smith, Stavisky
Ayes W/R (1): Peralta

VOTE: COMMITTEE VOTE: - Banks - Mar 28, 2012

Ayes (19): Griffo, Farley, Bonacic, DeFrancisco, Gallivan, Golden, Johnson, O'Mara, Marcellino, Ranzenhofer, Smith, Breslin, Carlucci, Diaz, Krueger, Rivera, Savino, Valesky, Avella

S6710-2011 Memo

BILL NUMBER:S6710

TITLE OF BILL:

An act to amend the insurance law, in relation to risk-based capital for
property/casualty insurers; to amend the financial services law, in
relation to annual reports of the superintendent; and to repeal certain
provisions of the insurance law and the banking law relating to annual
reporting requirements of the superintendent of financial services

PURPOSE OF THE BILL:

The purpose of this bill is to amend the Insurance Law in relation to
risk-based capital ("RBC") for property/casualty insurers and to amend
the Insurance Law, Banking Law, and Financial Services Law in relation
to the Superintendent of Financial Services' ("Superintendent's") annual
report.

SUMMARY OF PROVISIONS:

Section 1 of this bill would amend Insurance Law � 1324(d)(1) to add to
the definition of "company action level event" the filing by an insurer
of an RBC report indicating that the insurer has total adjusted capital
that is greater than or equal to its company action level RBC, but less
than the product of 3.0 and its authorized control level RBC, and with a
combined ratio greater than 120% as determined in accordance with the
trend test calculation in the RBC instructions.

Section 2 would repeal Insurance Law � 206, which pertains to the Super-
intendent's annual report regarding insurance.

Section 3 would repeal Banking Law � 43, which applies to the Super-
intendent's annual report regarding banking.

Section 4 would add a new Financial Services Law � 207, which requires
the Superintendent to submit annually a report regarding insurance,
banking, and financial products or services.

Section 5 would provide for an immediate effective date.

EXISTING LAW:

Insurance Law � 1324 applies to RBC for property/casualty insurers, but
does not set forth an RBC trend test.

Insurance Law � 206 requires the Superintendent to submit a report annu-
ally to the Legislature regarding insurance. Banking Law � 43 requires
the Superintendent to submit a report annually to the Governor and the
Legislature regarding banking.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.

STATEMENT IN SUPPORT:

This bill would amend Insurance Law � 1324 to set forth a
property/casualty RBC trend test. This test became an accreditation
standard as of January 1, 2012 and is necessary for the Department to
maintain its accreditation status with the National Association of
Insurance Commissioners ("NAIC"). Accredited state departments must
undergo a comprehensive review every five years by an independent review
team to ensure they continue to meet baseline standards. The accredi-
tation standards require that state departments have adequate statutory
and administrative authority to regulate an insurer's corporate and
financial affairs, and that they have the necessary resources to carry
out that authority. The RBC trend test also will help the Department
better monitor the financial health of property/casualty insurers.

The bill also combines the separate annual reports required to be
submitted by the former Superintendents of Insurance and Banking and
eliminates certain obsolete provisions.

FISCAL IMPLICATIONS:

There are no fiscal implications from this bill.

EFFECTIVE DATE:

This bill would take effect immediately.

S6710-2011 Text

 S T A T E   O F   N E W   Y O R K
 
                                          6710
 I N  SENATE
 March 12, 2012
 
 Introduced  by Sen. SEWARD -- (at request of the Department of Financial
 Services) -- 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 risk-based capital for
 property/casualty  insurers;  to  amend the financial services law, in
 relation to annual  reports  of  the  superintendent;  and  to  repeal
 certain  provisions  of the insurance law and the banking law relating
 to annual reporting requirements of the  superintendent  of  financial
 services
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1.   Paragraph 1 of subsection (d)  of  section  1324  of  the
 insurance  law,  as added by chapter 631 of the laws of 2007, is amended
 to read as follows:

 (1) "Company action level event" means, with  respect  to  a  domestic
 insurer:

 (A)  The  filing  by  the insurer of an RBC report indicating that the
 insurer's total adjusted capital is greater than or equal to its regula
 tory action level RBC but less than its company action level RBC;
 (B) The notification by  the  superintendent  to  the  insurer  of  an
 adjusted  RBC report that indicates the occurrence of an event described
 in subparagraph (A) of this paragraph, provided  the  insurer  does  not
 challenge  the adjusted RBC report under subsection (h) of this section;
 [or]
 (C) If, under subsection (h) of this section, the  insurer  challenges
 an  adjusted  RBC  report  that  indicates  the  occurrence  of an event
 described in subparagraph (A) of this paragraph, the notification by the
 superintendent to the insurer that the superintendent has, after a hear
 ing, rejected the insurer's challenge[.]; OR
 (D) THE FILING BY THE INSURER OF AN RBC  REPORT  INDICATING  THAT  THE
 INSURER  HAS TOTAL ADJUSTED CAPITAL THAT IS GREATER THAN OR EQUAL TO ITS
 COMPANY ACTION LEVEL RBC, BUT LESS THAN THE PRODUCT OF THREE POINT  ZERO
 AND  ITS AUTHORIZED CONTROL LEVEL RBC, AND WITH A COMBINED RATIO GREATER
 THAN ONE HUNDRED TWENTY PERCENT AS DETERMINED  IN  ACCORDANCE  WITH  THE
 TREND TEST CALCULATION IN THE RBC INSTRUCTIONS.
 

S 2.

Section 206 of the insurance law is REPEALED.
 

S 3.

Section 43 of the banking law is REPEALED.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD14841-02-2
        S. 6710                             2
 

S 4. The financial services law is amended by adding a new section 207
 to read as follows:

 

S  207.  ANNUAL  REPORT OF THE SUPERINTENDENT.  (A) THE SUPERINTENDENT
 SHALL SUBMIT A REPORT ANNUALLY TO THE GOVERNOR AND TO THE LEGISLATURE ON
 OR BEFORE THE FIFTEENTH DAY OF SEPTEMBER. THE REPORT SHALL  CONTAIN  THE
 FOLLOWING ITEMS, WITH RESPECT TO THE PRECEDING CALENDAR YEAR:

 (1)  A GENERAL REVIEW OF THE INSURANCE BUSINESS, BANKING BUSINESS, AND
 FINANCIAL PRODUCT OR SERVICE BUSINESS UTILIZING THE MOST CURRENT  INFOR
 MATION AVAILABLE;
 (2)  A CONSOLIDATED STATEMENT OF CONDITION SHOWING THE COMBINED ASSETS
 AND LIABILITIES OF ALL BANKING  ORGANIZATIONS  COMPRISING  EACH  OF  THE
 FOLLOWING CLASSES:  (A) BANKS AND TRUST COMPANIES; AND (B) PRIVATE BANK
 ERS.  EACH  SUCH  CONSOLIDATED  STATEMENT  SHALL COMBINE THE INFORMATION
 CONTAINED IN THE LAST PERIODICAL REPORTS OF CONDITION RECEIVED FROM SUCH
 BANKING ORGANIZATIONS AS OF A DATE DURING THE YEAR FOR WHICH SUCH REPORT
 OF THE SUPERINTENDENT IS RENDERED;
 (3) A CONSOLIDATED STATEMENT OF CONDITION SHOWING THE COMBINED  ASSETS
 AND  LIABILITIES  OF  ALL  BANKING  ORGANIZATIONS COMPRISING EACH OF THE
 FOLLOWING CLASSES:  (A) SAVINGS BANKS; (B) SAFE DEPOSIT  COMPANIES;  (C)
 SAVINGS  AND  LOAN  ASSOCIATIONS;  (D) CREDIT UNIONS; AND (E) INVESTMENT
 COMPANIES. EACH SUCH CONSOLIDATED STATEMENT SHALL COMBINE  THE  INFORMA
 TION  CONTAINED  IN THE LAST PERIODICAL REPORTS OF CONDITION MADE TO THE
 SUPERINTENDENT AS OF A DATE DURING THE YEAR FOR WHICH THE REPORT OF  THE
 SUPERINTENDENT  IS  RENDERED,  EXCEPT THAT WITH RESPECT TO THOSE CLASSES
 MAKING REPORTS TO THE SUPERINTENDENT AS OF THE FIRST DAY OF THE  FOLLOW
 ING  YEAR,  SUCH  CONSOLIDATED  STATEMENTS SHALL COMBINE THE INFORMATION
 CONTAINED IN SUCH REPORTS;
 (4) A CONSOLIDATED STATEMENT OF CONDITION SHOWING THE COMBINED  ASSETS
 AND  LIABILITIES  OF ALL LICENSED LENDERS. EACH SUCH CONSOLIDATED STATE
 MENT SHALL COMBINE THE INFORMATION CONTAINED IN THE REPORTS TO  BE  MADE
 ON  OR  BEFORE THE FIRST DAY OF APRIL OF THE YEAR FOLLOWING THE YEAR FOR
 WHICH THE REPORT OF THE SUPERINTENDENT IS RENDERED;
 (5) A STATEMENT OF CONDITION OF EACH BANKING ORGANIZATION REQUIRED  BY
 THE  BANKING  LAW  TO MAKE PERIODICAL REPORTS OF CONDITION TO THE SUPER
 INTENDENT. SUCH STATEMENT SHALL INCLUDE THE INFORMATION CONTAINED IN THE
 LAST PERIODICAL REPORT OF CONDITION MADE TO THE SUPERINTENDENT AS  OF  A
 DATE  DURING  THE  YEAR  FOR  WHICH SUCH REPORT OF THE SUPERINTENDENT IS
 RENDERED, EXCEPT THAT  IN  THE  CASE  OF  BANKING  ORGANIZATIONS  MAKING
 REPORTS TO THE SUPERINTENDENT AS OF THE FIRST DAY OF THE FOLLOWING YEAR,
 EACH  SUCH  STATEMENT  SHALL  INCLUDE  THE INFORMATION CONTAINED IN SUCH
 REPORTS.  NOTWITHSTANDING ANY OTHER PROVISION  OF  THIS  SUBSECTION,  IN
 LIEU  OF  MAKING  A  STATEMENT  OF THE CONDITION OF EACH COVERED BANKING
 ORGANIZATION, THE SUPERINTENDENT MAY MAKE SUCH INFORMATION AVAILABLE  BY
 ANY  OTHER  MEANS THAT PROVIDES FOR DIRECT PUBLIC ACCESS OR AVAILABILITY
 TO SUCH REQUIRED REPORTS OF CONDITION;
 (6) A STATEMENT OF ALL BANKING ORGANIZATIONS, FOREIGN  BANKING  CORPO
 RATIONS  AND  LICENSED LENDERS AUTHORIZED OR LICENSED BY THE SUPERINTEN
 DENT TO DO BUSINESS DURING THE YEAR FOR WHICH THE  REPORT  IS  RENDERED,
 WITH THEIR NAMES AND LOCATIONS AND THE DATES ON WHICH THEIR CERTIFICATES
 WERE  APPROVED  BY THE SUPERINTENDENT, AND SUCH OTHER INFORMATION AS THE
 SUPERINTENDENT DEEMS APPROPRIATE;
 (7) A STATEMENT OF THE BANKING ORGANIZATIONS, FOREIGN  BANKING  CORPO
 RATIONS WHOSE BUSINESS HAS BEEN CLOSED EITHER VOLUNTARILY OR INVOLUNTAR
 ILY DURING THE YEAR FOR WHICH THE REPORT IS RENDERED, WITH THE AMOUNT OF
 THEIR  RESOURCES  AND  OF  THEIR  DEPOSITS AND OTHER LIABILITIES AS LAST
 REPORTED BY THEM;
        S. 6710                             3
 (8) A STATEMENT OF ANY UNCLAIMED AMOUNTS HELD  BY  THE  SUPERINTENDENT
 PURSUANT TO THE REQUIREMENTS OF THE BANKING LAW AS TRUSTEE FOR THE CRED
 ITORS,  DEPOSITORS,  STOCKHOLDERS OR SHAREHOLDERS OF EACH BANKING ORGAN
 IZATION THE BUSINESS AND AFFAIRS OF WHICH SHALL HAVE BEEN FINALLY LIQUI
 DATED;  THE AMOUNT OF INTEREST RECEIVED DURING THE PRECEDING FISCAL YEAR
 UPON ALL SUCH UNCLAIMED AMOUNTS HELD  BY  THE  SUPERINTENDENT;  AND  THE
 AMOUNT  OF  ABANDONED FUNDS PAID OVER BY THE SUPERINTENDENT TO THE STATE
 COMPTROLLER PURSUANT TO THE REQUIREMENTS OF THE BANKING LAW;
 (9) A TABLE SHOWING  THE  NUMBER  AND  KINDS  OF  AUTHORIZED  INSURERS
 ACCORDING  TO  CLASSES OF BUSINESS, AND THEIR TOTAL ASSETS, LIABILITIES,
 PREMIUMS WRITTEN, AND INSURANCE IN FORCE, AS SHOWN BY THE ANNUAL  STATE
 MENTS FILED WITH THE SUPERINTENDENT BY SUCH INSURERS;
 (10) LISTS OF: (A) INSURERS ORGANIZED, ADMITTED, MERGED, WITHDRAWN, OR
 PLACED  IN  LIQUIDATION,  CONSERVATION,  OR REHABILITATION, (B) DOMESTIC
 INSURERS THAT HAVE AMENDED THEIR CHARTERS OR HAVE INCREASED OR DECREASED
 THEIR CAPITAL STOCK, TOGETHER WITH A STATEMENT OF  THE  EXTENT  THEREOF;
 AND (C) DOMESTIC INSURERS THAT HAVE CHANGED THEIR CORPORATE NAMES;
 (11)  A  LIST OF DEPARTMENT REPORTS FILED ON EXAMINATION OF AUTHORIZED
 INSURERS;
 (12)   A   STATEMENT   OF   THE   EXPENSES   OF   ADMINISTERING    THE
 PROPERTY/CASUALTY  INSURANCE  SECURITY FUND AND THE PUBLIC MOTOR VEHICLE
 LIABILITY SECURITY FUND PURSUANT TO ARTICLE SEVENTY-SIX OF THE INSURANCE
 LAW;
 (13) TABLES RELATIVE TO INSURER LIQUIDATION, CONSERVATION OR REHABILI
 TATION PROCEEDINGS BY THE DEPARTMENT  FOR  PRIOR  YEARS,  INCLUDING  THE
 PRECEDING CALENDAR YEAR;
 (14)  ANY  AMENDMENTS  TO THE BANKING LAW, THE INSURANCE LAW, AND THIS
 CHAPTER, AND  ANY  AMENDMENTS  TO  REGULATIONS  PROMULGATED  THEREUNDER,
 DURING  THE  YEAR FOR WHICH SUCH REPORT IS RENDERED; A SUMMARY OF INSUR
 ANCE CIRCULAR LETTERS AND BANKING INTERPRETATIONS ISSUED DURING THE YEAR
 FOR WHICH SUCH REPORT IS RENDERED; AND SUCH OTHER  MATTERS  RELATING  TO
 THE  BANKING ORGANIZATIONS, CORPORATIONS, PARTNERSHIPS, INSURERS, INSUR
 ANCE PRODUCERS, OR OTHER ENTITIES OR PERSONS LICENSED, AUTHORIZED TO  DO
 BUSINESS,  CERTIFIED, OR REGISTERED UNDER THE BANKING LAW, THE INSURANCE
 LAW, OR THIS CHAPTER, INCLUDING PUBLIC STATEMENTS,  RECOMMENDATIONS  AND
 DECISIONS  OF  THE  SUPERINTENDENT,  OCCURRING DURING THE YEAR FOR WHICH
 SUCH REPORT IS RENDERED, WHICH, IN THE JUDGMENT OF  THE  SUPERINTENDENT,
 MAY BE OF HISTORICAL OR REGULATORY SIGNIFICANCE;
 (15)  LEGISLATIVE RECOMMENDATIONS THAT THE SUPERINTENDENT DEEMS NECES
 SARY OR DESIRABLE; AND
 (16) A SUMMARY OF THE DEPARTMENT'S RECEIPTS AND  EXPENSES  DURING  THE
 PRECEDING  FISCAL  YEAR,  EXCEPT EXPENSES OF LIQUIDATION NOT PAID OUT OF
 AMOUNTS APPROPRIATED BY THE LEGISLATURE, THE AMOUNTS APPROPRIATED BY THE
 LEGISLATURE FOR THE EXPENSES OF THE DEPARTMENT DURING SUCH YEAR, AND THE
 AMOUNT, IF ANY, FOR WHICH THE TREASURY OF THE STATE SHALL NOT HAVE  BEEN
 REIMBURSED AT THE DATE OF SUCH REPORT.
 (B)  THE  SUPERINTENDENT  MAY,  IN ADDITION TO THE ABOVE REQUIREMENTS,
 INCLUDE IN SUCH REPORT ANY OTHER MATTER OR  DATA  CONCERNING  INSURANCE,
 BANKING,  FINANCIAL  PRODUCTS OR SERVICES OR THE SUPERINTENDENT'S DUTIES
 UNDER THE INSURANCE LAW, THE BANKING LAW, OR THIS CHAPTER, WHICH IN  THE
 SUPERINTENDENT'S JUDGMENT, IS OF GENERAL INTEREST OR IMPORT.
 

S 5. This act shall take effect immediately.

S6710-2011: Relates to risk based capital for property/casualty insurers and reports filed by the superintendent of financial services; repealer