BILL NUMBER:S2367

TITLE OF BILL:

An act to amend the insurance law, in relation to enacting the
"insurance modernization act of 2015"

PURPOSE:

There are two areas of the insurance law where the current law does
not accurately reflect the realities of insurance operations. First,
with the advent of electronic signatures and the ubiquitous nature of
faxed or scanned documents with copies of signatures, the current
Department of Financial Services' (DFS) requirement that applications
by continuing insurance education providers must have original
signatures is anachronistic. This bill would permit both original
signatures and copies of signatures.

Second, current law through an oversight does not expressly include
advance premium cooperatives as a type of cooperative allowed to
invest in certificates of deposit in a certain manner that is
presently allowed for assessment cooperatives. This bill would correct
this oversight by stating that all co-operative property/casualty
insurance companies may invest in certificates of deposit under this
applicable section of law.

              

SUMMARY OF PROVISIONS:

Section 1 and 2 of the bill provide for the title and legislative
intent.

Section 3. Amend Insurance Law section 2132 (i) (3) by stipulating
that a continuing education course provider under the insurance law
may satisfy signature requirements through compliance with New York
General Construction Law section 46, Signature.

Section 4. Amends Insurance Law section 6623 (c) to delete the words
"an assessment corporation" and replace them with the words "a
co-operative property/casualty insurance company".

Section 5. Effective date is immediately upon enactment.

JUSTIFICATION:

DFS currently requires continuing education course providers to submit
all documents with original, or "wet", signatures. Modern technology
with its extensive use of faxed documents, scanned documents and even
electronic signatures has overtaken the anachronistic practice of
obtaining original signatures in all cases. In fact, DFS's predecessor
agency, the Department of Insurance, opined in a 2007 office of
general counsel opinion (Opinion No. 07-02-11) that an insurance
producer may use a stamped signature on an application for group
insurance. Furthermore, New York has the Electronic Signatures and
Records Act (New York Technology Law sections 101-109), which
authorizes the use and acceptance of electronic signatures in
commercial transactions throughout New York state. This bill would
modernize DFS's practices regarding signatures submitted by continuing


education providers by allowing a copy of a signature or an electronic
signature, as well as an original signature, on documents submitted by
such providers.

One of the chapter laws of 2000 amended Insurance Law section 6623 to
allow assessment corporations, one of the two types of cooperative
insurance companies in New York with the other one being advance
premium corporations, to invest in certificates of deposit (CDs) with
any one institution in an amount not to exceed the amount guaranteed
by the Federal Deposit Insurance Corporation (FDIC). The impetus for
this change was the prohibition, prior to this 2000 law, on
cooperative insurers investing more than 10% of their admitted assets
in any one financial institution. According to the sponsor memorandum
for the 2000 law, the change in the statute was necessitated by the
fact that assessment corporations are often located in small, rural
areas with few investment opportunities. Since this fact also exists
for many advance premium corporations, they should similarly be
included within this authorization to invest in certificates of
deposit. This measure would resolve that inequity by including advance
premium corporations under the section of law authorizing investments
in CDs.

LEGISLATIVE HISTORY:

Similar to S.6526-A of 2014

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.

                                BILL NUMBER:S2367A

TITLE OF BILL:  An act to amend the insurance law, in relation to
enacting the "insurance modernization act of 2015"

PURPOSE:

There are two areas of the insurance law where the current law does
not accurately reflect the realities of insurance operations. First,
with the advent of electronic signatures and the ubiquitous nature of
faxed or scanned documents with copies of signatures, the current
Department of Financial Services' (DFS) requirement that applications
by continuing insurance education providers must have original
signatures is anachronistic. This bill would permit both original
signatures and copies of signatures

Second, current law through an oversight does not expressly include
advance premium cooperatives as a type of cooperative allowed to
invest in certificates of deposit in a certain manner that is
presently allowed for assessment cooperatives This bill would correct
this oversight by stating that all co-operative property/casualty
insurance companies may invest in certificates of deposit under this
applicable section of law,

SUMMARY OF PROVISIONS:

              

Section 1 and 2 of the bill provide for the title and legislative
intent.

Section 3. Amend Insurance Law section 2132 (i) (3) by stipulating
that a continuing education course provider under the insurance law
may satisfy signature requirements through compliance with New York
General Construction Law section 46, Signature.

Section 4. Amends Insurance Law section 6623 (c) to delete the words
"an assessment corporation" and replace them with the words "a
co-operative property/casualty insurance company".

Section 5. Effective date is immediately upon enactment.

JUSTIFICATION:

DFS currently requires continuing education course providers to submit
all documents with original, or "wet", signatures Modern technology
with its extensive use of faxed documents, scanned documents and even
electronic signatures has overtaken the anachronistic practice of
obtaining original signatures in all cases.  In fact, DFS's
predecessor agency, the Department of Insurance, opined in a 2007
office of general counsel opinion (Opinion No 07-02-11) that an
insurance producer may use a stamped signature on an application for
group insurance. Furthermore, New York has the Electronic Signatures
and Records Act (New York Technology Law sections 101-109), which
authorizes the use and acceptance of electronic signatures in
commercial transactions throughout New York state. This bill would
modernize DFS's practices regarding signatures submitted by continuing
education providers by allowing a copy of a signature or an electronic


signature, as well as an original signature, on documents submitted by
such providers.

One of the chapter laws of 2000 amended Insurance Law section 6623 to
allow assessment corporations, one of the two types of cooperative
insurance companies in New York with the other one being advance
premium corporations, to invest in certificates of deposit (CDs) with
any one institution in an amount not to exceed the amount guaranteed
by the Federal Deposit Insurance Corporation (FDIC). The impetus for
this change was the prohibition, prior to this 2000 law, on
cooperative insurers investing more than 10% of their admitted assets
in any one financial institution. According to the sponsor memorandum
for the 2000 law, the change in the statute was necessitated by the
fact that assessment corporations are often located in small, rural
areas with few investment opportunities. Since this fact also exists
for many advance premium corporations, they should similarly be
included within this authorization to invest in certificates of
deposit, This measure would resolve that inequity by including advance
premium corporations under the section of law authorizing investments
in CDs.

LEGISLATIVE HISTORY:

Similar to S 6526-A of 2014

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately.