Makes technical corrections relating to the treatment of qualified financial contracts in an insurance insolvency proceeding affecting a domestic, foreign or alien insurer.
TITLE OF BILL:
An act to amend the insurance law, in relation to making technical corrections thereto
This bill would make technical corrections to Chapter 600 of the Laws of 2011.
SUMMARY OF SPECIFIC PROVISIONS:
Specifically, this bill would make technical corrections to Chapter 600 of the Laws of 2011 (S.2713-A/A.6603-A) which amended the insurance law, in relation to the treatment of qualified financial contracts in an insurance insolvency proceeding affecting a domestic, foreign or alien insurer (so as to increase the certainty of insurers and their creditors with respect to the enforceability of certain financial market transactions and related netting agreements in the event of insurer insolvency). These technical corrections would amend such chapter to include contracts in connection with netting agreements, and to expressly exclude rights against an insurer licensed to write financial guaranty insurance.
This bill would make two clarifying amendments to Chapter 600, so as to specify that financial guaranty insurance would not be included within its provisions, and that contracts in connection with netting agreements would be so included, as was the intent of the original chapter.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
This act would be deemed to have taken effect on December 12, 2011 (the effective date of Chapter 600).
STATE OF NEW YORK ________________________________________________________________________ 6131 IN SENATE (PREFILED) January 4, 2012 ___________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 making technical corrections thereto THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subsection (b) of section 7437 of the insur- ance law, as added by chapter 600 of the laws of 2011, is amended to read as follows: (1) Notwithstanding any other provision of this article, including any other provision of this article permitting the modification of contracts, or other law of this state, no person shall be stayed or prohibited from exercising: (A) a contractual right to cause the termi- nation, liquidation, acceleration or close out of any obligation under OR IN CONNECTION WITH a netting agreement or qualified financial contract with an insurer, other than an insurer licensed to write finan- cial guaranty insurance, because of: (i) the insolvency, financial condition or default of the insurer at any time, provided that the right is enforceable under applicable law other than this article; or (ii) the commencement of any proceeding under this article; (B) any right under a security arrangement relating to one or more netting agreements or qual- ified financial contracts, OTHER THAN A RIGHT AGAINST AN INSURER LICENSED TO WRITE FINANCIAL GUARANTY INSURANCE; or (C) subject to any provision of subsection (b) of section seven thousand four hundred twen- ty-seven of this article, any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with one or more qualified financial contracts, OTHER THAN A RIGHT AGAINST AN INSURER LICENSED TO WRITE FINANCIAL GUARANTY INSURANCE, where the counterparty or its guarantor is organized under the laws of the United States, a state, or a foreign jurisdiction approved by the Securities Valuation Office of the National Association of Insurance Commissioners as eligible for netting. S 2. This act shall take effect on the same date and in the same manner as chapter 600 of the laws of 2011 took effect.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD05498-08-2