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

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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

Floor Calendar: Mar 29, 2012 , Floor Calendar: Mar 30, 2012 , Floor Calendar: Apr 17, 2012 , Floor Calendar: Apr 18, 2012 , Floor Calendar: Apr 19, 2012 , Floor Calendar: Apr 25, 2012 , Floor Calendar: Apr 26, 2012 , Floor Calendar: Apr 30, 2012 , Floor Calendar: May 1, 2012 , Floor Calendar: May 2, 2012 , Floor Calendar: May 7, 2012 , Floor Calendar: May 8, 2012 , Floor Calendar: May 9, 2012 , Floor Calendar: May 14, 2012 , Floor Calendar: May 15, 2012 , Floor Calendar: May 16, 2012 , Floor Calendar: May 21, 2012 , Floor Calendar: May 22, 2012 , Floor Calendar: May 23, 2012 , Floor Calendar: May 30, 2012 , Floor Calendar: May 31, 2012 , Floor Calendar: Jun 4, 2012

S6710-2011 Votes

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.