Relates to the redomestication of insurance companies.
TITLE OF BILL: An act to amend the insurance law, in relation to the redomestication of insurance companies
PURPOSE: To provide for the more efficient regulation of insurance entities by more closely conforming New York law governing the redomestication of insurance companies to the National Association of Insurance Commissioners (NAIC) Redomestication Model Act.
SUMMARY OF PROVISIONS: This bill would amend § 7120 to the Insurance Law by adding a new subsection (c) and subsection (h) to more closely conform New York Jaw governing the redomestication of insurance companies to the NAIC Redomestication Model Bill. Specifically, this bill would include provisions governing the redomestication of a domestic insurance company to another state upon the approval of the Superintendent of Insurance. Upon approval of redomestication by the Superintendent, the transferring company would be authorized to transact business in New York State as a foreign company, provided that the insurer meets all of the requirements for operation as a foreign company Such company could continue to utilize policy forms previously approved by the Superintendent for their use as a domestic insurer, with the proper endorsements
EXISTING LAW: Currently, § 7120 only contains the provisions of the NAIC Model relating to the transfer to this state of the corporate domicile of an authorized foreign company
JUSTIFICATION: This bill will improve the efficiency of the regulation and oversight of affiliated groups of insurance companies domiciled in multiple states and will help to preserve the continuation of state regulation of insurance. Forty-one states have adopted a version of the NAIC Redomestication Model Act, which provides for a redomestication process which is efficient, effective and not unduly cumbersome New York State has not adopted the provisions of the Model Act relating to the transfer of a domestic insurer to another state and, thus, under current New York law, the process for consolidating affiliates is a very difficult, time consuming and cumbersome one By adopting the balance of the NAIC Redomestication Model Bill. this legislation will also further uniformity among states relative to the regulation of insurance companies and would make the current state-based system for the regulation of insurance companies more efficient. As the threat of the federal regulation of the insurance industry continues to loom, it is important that states demonstrate their ability to work together and adopt uniform laws where such laws would provide for the more effective regulation of insurance companies. The enactment of this legislation would further this goal.
LEGISLATIVE HISTORY: S.3366 of 2011-12
FISCAL IMPLICATIONS: None
EFFECTIVE DATE: Immediately
STATE OF NEW YORK ________________________________________________________________________ 3543 2013-2014 Regular Sessions IN SENATE February 5, 2013 ___________Introduced by Sen. SEWARD -- 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 the redomestication of insurance companies THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 7120 of the insurance law, as amended by chapter 48 of the laws of 2009, is amended to read as follows: S 7120. Redomestication of
[foreign]insurance companies. (a) Defi- nitions. In this section: (1) "Redomestication" means the transfer to this state of the corpo- rate domicile of an authorized foreign company OR THE TRANSFER FROM THIS STATE OF THE CORPORATE DOMICILE OF A DOMESTIC COMPANY, as provided for in this section. (2) "Transferring company" means any authorized [foreign]company seeking redomestication. (b) A transferring company TRANSFERRING TO THIS STATE shall: (1) file with the superintendent a certificate in such form as prescribed by the superintendent signed by the insurance supervisory official of the state where such transferring company is domiciled approving the proposed redomestication and confirming that upon redomes- tication the transferring company shall no longer be subject as a domes- tic company to the requirements of its current state of domicile; (2) comply with the applicable requirements of this chapter regarding the organization and licensing of a domestic company of the same type; (3) demonstrate to the satisfaction of the superintendent that upon redomestication, the transferring company will be in compliance with the requirements of this chapter and any regulations promulgated thereunder applicable to a domestic company of the same type; (4) submit to the superintendent all documents and filings necessary to comply with paragraphs two and three of this subsection; andEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08120-01-3 S. 3543 2
(5) submit new policy forms to the superintendent for use after redo- mestication, if so ordered by the superintendent, or use existing policy forms with appropriate endorsements if allowed by, and under such condi- tions as approved by, the superintendent. (c) A TRANSFERRING COMPANY TRANSFERRING FROM THIS STATE: (1) UPON THE APPROVAL OF THE SUPERINTENDENT, TRANSFER ITS DOMICILE TO ANY OTHER STATE IN WHICH IT IS ADMITTED TO TRANSACT THE BUSINESS OF INSURANCE, AND UPON SUCH A TRANSFER IT SHALL CEASE TO BE A DOMESTIC COMPANY, AND SHALL BE AUTHORIZED IN THIS STATE, IF QUALIFIED, AS A FOREIGN INSURER. THE SUPERINTENDENT SHALL APPROVE THE TRANSFER UNLESS HE OR SHE DETERMINES THE TRANSFER IS NOT IN THE INTEREST OF THE POLICY- HOLDERS OF THIS STATE; AND (2) MAY CONTINUE ISSUING POLICY FORMS APPROVED BEFORE REDOMESTICATION PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED ONE OF THIS CHAPTER WITH SUCH ENDORSEMENT, IF ANY, AS THE SUPERINTENDENT DETERMINES IS NEEDED TO REFLECT THE REDOMESTICATION. (D) After the transferring company has complied with the provisions of this section, the superintendent may, in accordance with section one thousand one hundred two of this chapter issue a new license to the transferring company to reflect the change in its state of corporate domicile. The duration of its license shall be governed by section one thousand one hundred three of this chapter. Upon issuance of such new license the redomestication shall become effective and the transferring company shall be a domestic company OR A FOREIGN COMPANY, AS APPROPRIATE.
[(d)](E) Simultaneous with the redomestication taking effect: (1) all materials and documents that were submitted to the superinten- dent by the transferring company pursuant to the requirements of this section shall be filed in the office of the superintendent SUBJECT TO SUBSECTION (H) OF THIS SECTION; and (2) FOR A TRANSFERRING COMPANY TRANSFERRING TO THIS STATE, the super- intendent shall, in accordance with section one thousand two hundred one or other applicable provisions of this chapter issue to the company a certified copy of its new declaration and charter and a certificate of incorporation. The new charter of the company may provide for the continuation of the corporate existence of the transferring company and in such case the original date of incorporation of the transferring company shall be the date of incorporation of the new domestic company. [(e)](F) All outstanding insurance policies and contracts shall remain in full force and effect with no change and need not be endorsed as to the new name of the company, if any, or its new location unless ordered by the superintendent. [(f)](G) All agents' appointments and licenses, rates, and other items that the superintendent allows, existing at the time of redomesti- cation, shall continue in full force and effect in accordance with applicable provisions of this chapter. (H) THE SUPERINTENDENT SHALL KEEP THE CONTENTS OF ANY REPORT OR INFOR- MATION THE SUPERINTENDENT REQUIRES PURSUANT TO THIS SECTION, AND THAT IS NOT OTHERWISE REQUIRED TO BE SET FORTH IN A PUBLICLY AVAILABLE REPORT OR FILING, CONFIDENTIAL IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND FIVE HUNDRED FOUR OF THIS CHAPTER. S 2. This act shall take effect immediately.