NY State Assembly Bill 2009-A9014

Assembly Bill A9014

2009-2010 Legislative Session

Provides an exemption to certain provisions relating to risk-based capital for property/casualty insurance companies and to financial regulation of medical malpractice; repealer

download bill text pdf

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to insurance
Jun 29, 2009	print number 9014a
Jun 29, 2009	amend and recommit to insurance
Jun 19, 2009	referred to insurance

Bill Amendments

Original

A (Active)

2009-A9014 - Details

Current Committee:: Assembly Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§1301, 1311, 2343, 6108, & 6111, rpld & add §1325, add §1326, Ins L
Versions Introduced in Other Legislative Sessions:: 2011-2012: A3728
2013-2014: A1007
2015-2016: A3283

2009-A9014 - Summary

Provides an exemption to certain provisions relating to risk-based capital for property/casualty insurance companies and repeals certain provisions relating thereto, and to financial regulation of medical malpractice insurance liability companies.

2009-A9014 - Sponsor Memo

                                BILL NUMBER:A9014

TITLE OF BILL:  An act to amend the insurance law, in relation to an
exemption to certain provisions of law relating to risk-based capital
for property/casualty insurance companies; and in relation to the finan-
cial regulation of medical malpractice liability insurance companies;
and to repeal certain provisions of such law relating thereto

SUMMARY OF PROVISIONS:  Section 1: Amends Insurance Law section 1301 to
allow medical malpractice insurance to apply the value of surcharges or
assessments to admitted asset calculations without having to collect
such surcharges or assessments, except on a schedule and subject to
limitations already provided for in law.

Section 2: Amends Insurance Law section 1311 to provide for the inclu-
sion of admitted assets allowed under this legislation into the calcu-
lation of required surplus.

Section 3: Amends Insurance Law section 1325 to permanently exempt
medical malpractice insurance companies from the provisions of law
relating to the risk based financial standards applying to all property
casualty insurance companies pursuant to section 1324 of the insurance
law; and directs the superintendent of insurance to develop a new finan-
cial standards framework for medical malpractice insurers operating in
the state that are primarily single-state and mono-line carriers. The
new standards are to be created by June 2011 and put into effect in

January 2012. The standards created are to include consideration of
claims reserve analyses and should be based on consultations with insur-
ers and the commissioner of health.

Section 4: Creates Insurance Law section 1326 to limit the application
of contingent liabilities to the financial statements of medical malp-
ractice insurers. Three of the bill also provides authority for insurers
to adjust rates upward no more than five percent per year on a file and
use basis.

Section 5: Amends Insurance Law section 2343 to make permanent certain
prohibitions on requests for orders of rehabilitation or liquidation for
medical malpractice insurance carriers.

Section 6: Amends Insurance Law section 6108 to create a presumption for
reciprocal insurers that surcharges or assessments are components of
admitted assets.

Section 7: Amends Insurance Law section 6111 to allow for contingent
liabilities of subscribers to be included in the calculation of admitted
assets for the purpose of completion of the financial statement.

JUSTIFICATION:  Medical malpractice insurance is a unique business in
New York. The vast majority of the state's medical malpractice insurance
capacity is provided by admitted, single-state, mono-line insurance
carriers, most of which are mutuals or reciprocal insurers that are

owned or controlled by physicians which provide medical malpractice
coverage to physicians. However, in addition to financial challenges,
these insurers, admitted in New York State, have been confronted with
mounting competition from Federally sanctioned out -of-state Risk
Retention Groups which are less-regulated than New York admitted carri-
ers. These Risk Retention groups may be able to provide cheaper medical
malpractice coverage in the short term, but may not have the financial
wherewithal to pay claims over the long term.

This bill modernizes the Insurance Law as it relates to medical malprac-
tice insurance. It recognizes the unique place that medical malpractice
insurance holds in the provision of health care in New York. Further,
the unique financial realities of these carriers which are mono-line,
doctor-owned entities where premium cost controls and continuity in the
availability of coverage are primary business objectives.

FISCAL INFORMATION:  None of the state.

EFFECTIVE DATE:  Immediately.

2009-A9014 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  9014

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              June 19, 2009
                               ___________

Introduced by M. of A. CARROZZA -- read once and referred to the Commit-
  tee on Insurance

AN  ACT  to  amend  the  insurance  law,  in relation to an exemption to
  certain  provisions  of  law  relating  to  risk-based   capital   for
  property/casualty  insurance  companies; and in relation to the finan-
  cial regulation of medical malpractice liability insurance  companies;
  and to repeal certain provisions of such law relating thereto

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

  Section 1. Subsection (a) of section 1301  of  the  insurance  law  is
amended by adding two new paragraphs 19 and 20 to read as follows:
  (19) FOR THOSE STOCK AND NON-STOCK COMPANIES TO WHICH SUBPARAGRAPH (B)
OF PARAGRAPH TWO OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED
TWENTY-FOUR OF THIS ARTICLE APPLY, THE AMOUNT OF THE SURCHARGE ON PREMI-
UMS TO SATISFY A PROJECTED DEFICIENCY THAT IS ATTRIBUTABLE TO THE PREMI-
UM  LEVELS  ESTABLISHED PURSUANT TO SECTION FORTY OF CHAPTER TWO HUNDRED
SIXTY-SIX OF THE LAWS OF NINETEEN HUNDRED EIGHTY-SIX, AS SUCH  SURCHARGE
IS  PROVIDED  IN SUCH CHAPTER, WHETHER OR NOT SUCH SURCHARGE IS ACTUALLY
IMPOSED BY THE SUPERINTENDENT; PROVIDED, HOWEVER, THAT SUCH  SURCHARGES,
IF  IMPOSED,  WILL  BE  SUBJECT  TO THE LIMITATIONS PROVIDED FOR IN THIS
CHAPTER RELATING TO THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.
  (20) FOR RECIPROCAL INSURERS ORGANIZED AND LICENSED PURSUANT TO  ARTI-
CLE  SIXTY-ONE OF THIS CHAPTER TO WRITE MEDICAL MALPRACTICE INSURANCE AS
THAT TERM IS DEFINED IN SUBSECTION (B) OF  SECTION  FIVE  THOUSAND  FIVE
HUNDRED  ONE OF THIS CHAPTER, THE AMOUNT OF ANY ASSESSMENT AUTHORIZED BY
SUBSECTIONS (A) AND (B) OF SECTION SIX THOUSAND  ONE  HUNDRED  EIGHT  OF
THIS CHAPTER; PROVIDED, HOWEVER, THAT SUCH ASSESSMENTS, IF IMPOSED, WILL
BE  SUBJECT  TO THE LIMITATIONS PROVIDED FOR IN THIS CHAPTER RELATING TO
THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.
  S 2. Section 1311 of the insurance law is  amended  by  adding  a  new
subsection (e) to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11667-05-9

A. 9014                             2

  (E)  IN DETERMINING THE TOTAL ADMITTED ASSETS OF AN INSURER THE SUPER-
INTENDENT SHALL INCLUDE IN SUCH  DETERMINATION  ALL  ASSETS  ALLOWED  AS
ADMITTED ASSETS PURSUANT TO SUBSECTION (A) OF SECTION ONE THOUSAND THREE
HUNDRED ONE OF THIS ARTICLE.
  S  3.  Section 1325 of the insurance law is REPEALED and a new section
1325 is added to read as follows:
  S 1325. EXEMPTION. (A) FOR THE PURPOSES OF EXEMPTING CERTAIN INSURANCE
COMPANIES FROM THE PROVISIONS OF  SECTION  ONE  THOUSAND  THREE  HUNDRED
TWENTY-FOUR OF THIS ARTICLE, THE SUPERINTENDENT SHALL EXEMPT THOSE STOCK
AND NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH
TWO OF SUBSECTION (B) OF SUCH SECTION APPLIES.
  (B)  THE  SUPERINTENDENT SHALL NO LATER THAN JUNE THIRTIETH, TWO THOU-
SAND ELEVEN PROMULGATE,  FOR  APPLICATION  DURING  THE  NEXT  SUCCEEDING
CALENDAR  YEAR,  AND AFTER  CONSULTATION WITH THE COMMISSIONER OF HEALTH
AND DOMESTIC MEDICAL MALPRACTICE INSURERS  WRITING  MEDICAL  MALPRACTICE
INSURANCE  IN  THIS STATE, A REGULATION WHICH PROVIDES A SEPARATE FINAN-
CIAL SECURITY STANDARD AND RATE APPROVAL PROCESS  FOR  THOSE  STOCK  AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF  SUBSECTION  (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF
THIS CHAPTER APPLY. SUCH STANDARD SHALL TAKE INTO ACCOUNT  THE  SPECIAL-
IZED NATURE OF THE COVERAGE PROVIDED BY SUCH COMPANIES, THE MONOLINE AND
SINGLE  STATE STATUS OF SUCH CARRIERS AND THE UNIQUE OBLIGATIONS IMPOSED
ON SUCH COMPANIES BY STATUTE AND REGULATION, AND SHALL BE BASED  ON  ITS
ABILITY  TO  PAY CLAIMS BASED UPON CLAIMS RESERVE ANALYSES. FURTHER, THE
REGULATION SHALL INCLUDE NEW STATUTORY FINANCIAL  STATEMENT  BLANKS  AND
EXAMINATION PROTOCOLS CONSISTENT WITH THE NEW STANDARD.
  (C)  UNTIL  SUCH TIME AS THE SUPERINTENDENT PROMULGATES REGULATIONS IN
ACCORDANCE  WITH  SUBSECTION  (B)  OF  THIS  SECTION,  THOSE  STOCK  AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF  SUBSECTION  (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF
THIS CHAPTER APPLIED, AND NOTWITHSTANDING ANY OTHER PROVISION OF LAW  TO
THE  CONTRARY,  A  CARRIER  MAY  FILE FOR AND USE A RATE INCREASE NOT TO
EXCEED FIVE PERCENT OF THE CARRIER'S CURRENT RATE UPON A FILING WITH THE
SUPERINTENDENT FOR THE NEXT SUCCEEDING POLICY YEAR IF SUCH SUBMISSION IS
FILED WITH THE SUPERINTENDENT NO LATER THAN JULY FIFTEENTH OF  THE  YEAR
PRIOR  TO  WHICH  IT  IS TO BE APPLIED.  IF A CARRIER DOES NOT FILE SUCH
RATE ADJUSTMENT WITHIN SUCH TIME  FRAME,  THEN  SUCH  INSURER  SHALL  BE
SUBJECT  TO  THE RATE APPROVAL PROCESS IN PLACE AT THE TIME THIS SECTION
SHALL TAKE EFFECT.
  S 4. The insurance law is amended by adding a new section 1326 to read
as follows:
  S 1326.  STATUTORY  ASSOCIATION  MEMBERSHIP.    FOR  THOSE  STOCK  AND
NON-STOCK  COMPANIES  TO  WHICH  SUBPARAGRAPH  (B)  OF  PARAGRAPH TWO OF
SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF THIS
ARTICLE APPLY, NO LIABILITIES ARISING FROM ANY MEMBERSHIP IN ANY  STATU-
TORY  ASSOCIATION  SHALL BE DUE AND OWING FROM SUCH COMPANIES UNLESS AND
UNTIL SUCH LIABILITIES CAN ONLY BE SATISFIED BY A CONTRIBUTION FROM  THE
INSURER,  AND  THE  INSURER  IS  NOTIFIED OF SAME NOT LESS THAN ONE YEAR
PRIOR TO THE EXPECTED DATE THAT SUCH OBLIGATION WILL BE DUE  AND  OWING.
SUCH  LIABILITIES  SHALL NOT BE AGGREGATED AND SHALL NOT INCLUDE CONTIN-
GENT LIABILITIES, BUT REFLECT SPECIFIC CLAIMS LIABILITIES  ACTUALLY  DUE
AND  OWING  OR EXPECTED TO BE DUE AND OWING IN THAT YEAR FOR WHICH THERE
ARE NO OTHER ASSOCIATION OR POOL RESOURCES,  INCLUDING  CURRENT  PREMIUM
INCOME, TO SATISFY SUCH OBLIGATIONS; FURTHER, COMPANIES, UPON RECEIPT OF
NOTICE  OF SUCH OBLIGATION, SHALL HAVE THE RIGHT TO AUDIT ANY SUCH ASSO-
CIATION AND ITS REQUEST FOR COVERAGE OF SUCH LIABILITIES.

A. 9014                             3

  S 5. Subsection (c) of section 2343 of the insurance law,  as  amended
by section 27 of part B of chapter 58 of the laws of 2008, is amended to
read as follows:
  (c)  Notwithstanding  any other provision of this chapter, no applica-
tion for an order of rehabilitation or liquidation of a domestic insurer
whose primary liability arises from the business of medical  malpractice
insurance,  as  that  term  is defined in subsection (b) of section five
thousand five hundred one of this chapter, shall be made on the  grounds
specified  in  subsection  (a)  or  (c)  of  section seven thousand four
hundred two of this chapter at any time [prior to  June  thirtieth,  two
thousand eleven].
  S 6. Subsection (b) of section 6108 of the insurance law is amended to
read as follows:
  (b)  If the admitted assets of any such insurer are at any time insuf-
ficient for the payment of losses and expenses after providing  for  all
other liabilities of such insurer and the minimum surplus to policyhold-
ers required by this chapter, the advisory committee shall, within thir-
ty  days thereafter, order an assessment for the amount necessary to pay
such losses and expenses, and authorize the attorney-in-fact to  collect
from  each  subscriber liable therefor a pro rata share of the amount of
such assessment, subject to the limit specified in the contract of  such
subscriber  and to maintain an action therefor in the name of the attor-
ney-in-fact. FOR THE PURPOSES OF THIS SUBSECTION, ADMITTED ASSETS  SHALL
INCLUDE A PRESUMPTION OF A SURCHARGE OR ASSESSMENT, WHERE APPLICABLE, OR
BOTH,  HAVING BEEN AUTHORIZED BY THE ADVISORY COUNCIL OR DIRECTED BY THE
SUPERINTENDENT CONSISTENT WITH THE TERMS OF THE  SUBSCRIBERS'  CONTRACTS
AND COLLECTED BY AN INSURER.
  S 7. Subsection (c) of section 6111 of the insurance law is amended to
read as follows:
  (c) The contingent liability of subscribers for additional premiums or
assessments  shall [not] be included as an asset in the financial state-
ment of a reciprocal insurer.
  S 8. This act shall take effect immediately.

2009-A9014A (ACTIVE) - Details

Current Committee:: Assembly Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§1301, 1311, 2343, 6108, & 6111, rpld & add §1325, add §1326, Ins L
Versions Introduced in Other Legislative Sessions:: 2011-2012: A3728
2013-2014: A1007
2015-2016: A3283

2009-A9014A (ACTIVE) - Summary

2009-A9014A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A9014A

TITLE OF BILL:  An act to amend the insurance law, in relation to an
exemption to certain provisions of law relating to risk-based capital
for property/casualty insurance companies; and in relation to the finan-
cial regulation of medical malpractice liability insurance companies;
and to repeal certain provisions of such law relating thereto

SUMMARY OF PROVISIONS:  Section 1: Amends Insurance Law section 1301 to
allow medical malpractice insurance to apply the value of surcharges or
assessments to admitted asset calculations without having to collect
such surcharges or assessments, except on a schedule and subject to
limitations already provided for in law.

Section 2.: Amends Insurance Law section 1311 to provide for the inclu-
sion of admitted assets allowed under this legislation into the calcu-
lation of required surplus.

Section 3: Amends Insurance Law section 1325 to permanently exempt
medical malpractice insurance companies from the provisions of law
relating to the risk based financial standards applying to all property
casualty insurance companies pursuant to section 1324 of the insurance
law. It also directs the superintendent of insurance to develop a new
financial standards framework for medical malpractice insurers operating
in the state. The new standards are to be created by June 2011 and put
into effect in January 2012. The new financial standards to be developed

by the Department should be based on consultations with insurers and
other interested parties.

Section 4: Creates Insurance Law section 1326 to limit the application
of contingent liabilities to the financial statements of medical malp-
ractice insurers. Three of the bill also provides authority for insurers
to adjust rates upward no more than five percent per year on a file and
use basis.

Section 5: Amends Insurance Law section 2342 to make permanent certain
prohibitions on requests for orders of rehabilitation or liquidation for
medical malpractice insurance carriers.

Section 6; Amends Insurance Law section 510!l to create a presumption
for reciprocal insurers that surcharges or assessments are components of
admitted assets.

Section 7: Amends Insurance Law section 6111 to allow for contingent
liabilities of subscribers to be included in the calculation of admitted
assets for the purpose of completion of the financial statement.

JUSTIFICATION:  Medical malpractice insurance is a unique business in
New York. The vast majority of the state's medical malpractice insurance
capacity is provided by admitted, single-state, mono-line insurance
carriers, most of which are mutuals or reciprocal insurers that are
owned or controlled by physicians which provide medical malpractice

coverage to physicians. However, in addition to financial challenges,
these insurers, admitted in New York State, have been confronted with
mounting competition from Federally sanctioned out-of-state Risk
Retention Groups which are less-regulated than New York admitted carri-
ers, These Risk Retention groups may be able to provide cheaper medical
malpractice coverage in the short term, but may not have the financial
wherewithal to pay claims over the long term.

This bill modernizes the insurance Law as it relates to medical malprac-
tice insurance. It recognizes the unique place that medical malpractice
insurance holds in the provision of health care in New York. Further,
the unique financial realities of these carriers which are mono-line,
doctor-owned entities where premium.cost controls and continuity in the
availability of coverage are primary business objectives.

FISCAL INFORMATION: None to the State.

EFFECTIVE DATE:  Immediately.

2009-A9014A (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 9014--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              June 19, 2009
                               ___________

Introduced by M. of A. CARROZZA -- read once and referred to the Commit-
  tee  on  Insurance  --  committee  discharged,  bill  amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the insurance  law,  in  relation  to  an  exemption  to
  certain   provisions   of  law  relating  to  risk-based  capital  for
  property/casualty insurance companies; and in relation to  the  finan-
  cial  regulation of medical malpractice liability insurance companies;
  and to repeal certain provisions of such law relating thereto

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

  Section  1.  Subsection  (a)  of  section 1301 of the insurance law is
amended by adding two new paragraphs 19 and 20 to read as follows:
  (19) FOR THOSE STOCK AND NON-STOCK COMPANIES TO WHICH SUBPARAGRAPH (B)
OF PARAGRAPH TWO OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED
TWENTY-FOUR OF THIS ARTICLE APPLY, THE AMOUNT OF THE SURCHARGE ON PREMI-
UMS TO SATISFY A PROJECTED DEFICIENCY THAT IS ATTRIBUTABLE TO THE PREMI-
UM LEVELS ESTABLISHED PURSUANT TO SECTION FORTY OF CHAPTER  TWO  HUNDRED
SIXTY-SIX  OF THE LAWS OF NINETEEN HUNDRED EIGHTY-SIX, AS SUCH SURCHARGE
IS PROVIDED IN SUCH CHAPTER, WHETHER OR NOT SUCH SURCHARGE  IS  ACTUALLY
IMPOSED  BY THE SUPERINTENDENT; PROVIDED, HOWEVER, THAT SUCH SURCHARGES,
IF IMPOSED, WILL BE SUBJECT TO THE  LIMITATIONS  PROVIDED  FOR  IN  THIS
CHAPTER RELATING TO THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.
  (20)  FOR RECIPROCAL INSURERS ORGANIZED AND LICENSED PURSUANT TO ARTI-
CLE SIXTY-ONE OF THIS CHAPTER TO WRITE MEDICAL MALPRACTICE INSURANCE  AS
THAT  TERM  IS  DEFINED  IN SUBSECTION (B) OF SECTION FIVE THOUSAND FIVE
HUNDRED ONE OF THIS CHAPTER, THE AMOUNT OF ANY ASSESSMENT AUTHORIZED  BY
SUBSECTIONS  (A)  AND  (B)  OF SECTION SIX THOUSAND ONE HUNDRED EIGHT OF
THIS CHAPTER; PROVIDED, HOWEVER, THAT SUCH ASSESSMENTS, IF IMPOSED, WILL
BE SUBJECT TO THE LIMITATIONS PROVIDED FOR IN THIS CHAPTER  RELATING  TO
THE AMOUNTS TO BE COLLECTED IN A GIVEN POLICY YEAR.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11667-07-9

A. 9014--A                          2

  S  2.  Section  1311  of  the insurance law is amended by adding a new
subsection (e) to read as follows:
  (E)  IN DETERMINING THE TOTAL ADMITTED ASSETS OF AN INSURER THE SUPER-
INTENDENT SHALL INCLUDE IN SUCH  DETERMINATION  ALL  ASSETS  ALLOWED  AS
ADMITTED ASSETS PURSUANT TO SUBSECTION (A) OF SECTION ONE THOUSAND THREE
HUNDRED ONE OF THIS ARTICLE.
  S  3.  Section 1325 of the insurance law is REPEALED and a new section
1325 is added to read as follows:
  S 1325. EXEMPTION. (A) FOR THE PURPOSES OF EXEMPTING CERTAIN INSURANCE
COMPANIES FROM THE PROVISIONS OF  SECTION  ONE  THOUSAND  THREE  HUNDRED
TWENTY-FOUR OF THIS ARTICLE, THE SUPERINTENDENT SHALL EXEMPT THOSE STOCK
AND NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH
TWO OF SUBSECTION (B) OF SUCH SECTION APPLIES.
  (B)  THE  SUPERINTENDENT SHALL NO LATER THAN JUNE THIRTIETH, TWO THOU-
SAND ELEVEN PROMULGATE,  FOR  APPLICATION  DURING  THE  NEXT  SUCCEEDING
CALENDAR  YEAR,  AND AFTER  CONSULTATION WITH THE COMMISSIONER OF HEALTH
AND DOMESTIC MEDICAL MALPRACTICE INSURERS  WRITING  MEDICAL  MALPRACTICE
INSURANCE  IN  THIS STATE, A REGULATION WHICH PROVIDES A SEPARATE FINAN-
CIAL SECURITY STANDARD AND RATE APPROVAL PROCESS  FOR  THOSE  STOCK  AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF  SUBSECTION  (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF
THIS CHAPTER APPLY. SUCH STANDARD SHALL BE  SUFFICIENTLY  DISTINCT  FROM
THAT  PROVIDED  FOR IN THIS CHAPTER OR RELATED REGULATION OR UTILIZED BY
THE SUPERINTENDENT IN THE EXAMINATION OF PROPERTY AND CASUALTY  CARRIERS
SO  AS  TO  REFLECT  THE  UNIQUE MARKET, FINANCIAL AND LEGAL OBLIGATIONS
IMPOSED UPON MEDICAL MALPRACTICE INSURANCE CARRIERS. FURTHER, THE  REGU-
LATION  SHALL INCLUDE NEW STATUTORY FINANCIAL STATEMENT BLANKS AND EXAM-
INATION PROTOCOLS CONSISTENT WITH THE NEW STANDARD.
  (C) UNTIL SUCH TIME AS THE SUPERINTENDENT PROMULGATES  REGULATIONS  IN
ACCORDANCE  WITH  SUBSECTION  (B)  OF  THIS  SECTION,  THOSE  STOCK  AND
NON-STOCK INSURANCE COMPANIES TO WHICH SUBPARAGRAPH (B) OF PARAGRAPH TWO
OF SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED  TWENTY-FOUR  OF
THIS  CHAPTER APPLIED, AND NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO
THE CONTRARY, A CARRIER MAY FILE FOR AND USE  A  RATE  INCREASE  NOT  TO
EXCEED FIVE PERCENT OF THE CARRIER'S CURRENT RATE UPON A FILING WITH THE
SUPERINTENDENT FOR THE NEXT SUCCEEDING POLICY YEAR IF SUCH SUBMISSION IS
FILED  WITH  THE SUPERINTENDENT NO LATER THAN JULY FIFTEENTH OF THE YEAR
PRIOR TO WHICH IT IS TO BE APPLIED.   IF A CARRIER DOES  NOT  FILE  SUCH
RATE  ADJUSTMENT  WITHIN  SUCH  TIME  FRAME,  THEN SUCH INSURER SHALL BE
SUBJECT TO THE RATE APPROVAL PROCESS IN PLACE AT THE TIME  THIS  SECTION
SHALL TAKE EFFECT.
  S 4. The insurance law is amended by adding a new section 1326 to read
as follows:
  S  1326.  STATUTORY  ASSOCIATION  MEMBERSHIP.    FOR  THOSE  STOCK AND
NON-STOCK COMPANIES TO  WHICH  SUBPARAGRAPH  (B)  OF  PARAGRAPH  TWO  OF
SUBSECTION (B) OF SECTION ONE THOUSAND THREE HUNDRED TWENTY-FOUR OF THIS
ARTICLE  APPLY, NO LIABILITIES ARISING FROM ANY MEMBERSHIP IN ANY STATU-
TORY ASSOCIATION SHALL BE DUE AND OWING FROM SUCH COMPANIES  UNLESS  AND
UNTIL  SUCH LIABILITIES CAN ONLY BE SATISFIED BY A CONTRIBUTION FROM THE
INSURER, AND THE INSURER IS NOTIFIED OF SAME  NOT  LESS  THAN  ONE  YEAR
PRIOR  TO  THE EXPECTED DATE THAT SUCH OBLIGATION WILL BE DUE AND OWING.
SUCH LIABILITIES SHALL NOT BE AGGREGATED AND SHALL NOT  INCLUDE  CONTIN-
GENT  LIABILITIES,  BUT REFLECT SPECIFIC CLAIMS LIABILITIES ACTUALLY DUE
AND OWING OR EXPECTED TO BE DUE AND OWING IN THAT YEAR FOR  WHICH  THERE
ARE  NO  OTHER  ASSOCIATION OR POOL RESOURCES, INCLUDING CURRENT PREMIUM
INCOME, TO SATISFY SUCH OBLIGATIONS; FURTHER, COMPANIES, UPON RECEIPT OF

A. 9014--A                          3

NOTICE OF SUCH OBLIGATION, SHALL HAVE THE RIGHT TO AUDIT ANY SUCH  ASSO-
CIATION AND ITS REQUEST FOR COVERAGE OF SUCH LIABILITIES.
  S  5.  Subsection (c) of section 2343 of the insurance law, as amended
by section 27 of part B of chapter 58 of the laws of 2008, is amended to
read as follows:
  (c) Notwithstanding any other provision of this chapter,  no  applica-
tion for an order of rehabilitation or liquidation of a domestic insurer
whose  primary liability arises from the business of medical malpractice
insurance, as that term is defined in subsection  (b)  of  section  five
thousand  five hundred one of this chapter, shall be made on the grounds
specified in subsection (a)  or  (c)  of  section  seven  thousand  four
hundred  two  of  this chapter at any time [prior to June thirtieth, two
thousand eleven].
  S 6. Subsection (b) of section 6108 of the insurance law is amended to
read as follows:
  (b) If the admitted assets of any such insurer are at any time  insuf-
ficient  for  the payment of losses and expenses after providing for all
other liabilities of such insurer and the minimum surplus to policyhold-
ers required by this chapter, the advisory committee shall, within thir-
ty days thereafter, order an assessment for the amount necessary to  pay
such  losses and expenses, and authorize the attorney-in-fact to collect
from each subscriber liable therefor a pro rata share of the  amount  of
such  assessment, subject to the limit specified in the contract of such
subscriber and to maintain an action therefor in the name of the  attor-
ney-in-fact.  FOR THE PURPOSES OF THIS SUBSECTION, ADMITTED ASSETS SHALL
INCLUDE A PRESUMPTION OF A SURCHARGE OR ASSESSMENT, WHERE APPLICABLE, OR
BOTH, HAVING BEEN AUTHORIZED BY THE ADVISORY COUNCIL OR DIRECTED BY  THE
SUPERINTENDENT  CONSISTENT  WITH THE TERMS OF THE SUBSCRIBERS' CONTRACTS
AND COLLECTED BY AN INSURER.
  S 7. Subsection (c) of section 6111 of the insurance law is amended to
read as follows:
  (c) The contingent liability of subscribers for additional premiums or
assessments shall [not] be included as an asset in the financial  state-
ment of a reciprocal insurer.
  S 8. This act shall take effect immediately.

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