NY State Senate Bill 2009-S1017

Archive: Last Bill Status - In Senate Committee Insurance 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
Jan 22, 2009	referred to insurance

2009-S1017 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add Art 80 §§8001 - 8006, Ins L
Versions Introduced in 2011-2012 Legislative Session:: S2582

2009-S1017 (ACTIVE) - Summary

Creates the natural disaster reinsurance fund financed through voluntary participation by insurers in the state to provide additional protection in the case of catastrophic events; exempts any amounts deposited into the fund from taxation by the state, county, municipality or local taxing authority; prohibits participating insurers from increasing any premiums based upon payments to such fund.

2009-S1017 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S1017

 TITLE OF BILL :
An act to amend the insurance law, in relation to creating a state
natural disaster reinsurance fund


 SUMMARY :
This bill amends the insurance law by adding a new article 80.  The
purpose of this bill found in Section 7901 is to create a natural
disaster reinsurance fund to be financed through voluntary
participation of insurers. The fund will provide subscribing companies
with a pool of available funds to be accessed when a catastrophic
event raises claims above a given level and will thus reduce the
potential for insurance company insolvencies due to natural disasters
and other catastrophic events. Section 7902 of this bill provides
definitions of "natural disaster" or "catastrophic event" as well as
the definition of "fund" pursuant to this article.  Section 7903
states that the superintendent will have custody of the natural
disaster reinsurance fund.

Also, when necessary the state shall establish and adjust the rates
for the reinsurance coverage using generally accepted actuarial
principles.  The state will hold these fun~s in trust and shall allow
them to be absolved only when participating insurers make claims
against the fund.  Section 7904 provides that participating insurers

are eligible to make claims against the fund when a natural disaster,
or a series of natural disasters, occurs which results in claims
exceeding 15% of the industry's surplus. Section 7905 exempts any
amounts deposited into the fund account from taxation by the state or
by any county, municipality or local taxing authority. Section 7906 of
this bill prohibits participating insurers from increasing any
premiums based upon payments made to the fund.

 JUSTIFICATION :
This legislation would create a fund which insurance companies can tap
into in the case of a natural disaster or catastrophic event.
Currently, in the instance of a catastrophic event, insurers must bear
the expenses incurred upon them by their clients. This bill would
prevent insurance company insolvencies should their claims rise above
a given level due to natural disasters or catastrophic events.  This
bill is a preventative measure we must make in case of future crisis
in this state. This bill provides protection for consumers from
insurance companies raising premiums to cover abundant claims in the
event of a natural disaster.

 FISCAL IMPLICATION :
To be determined.

 EFFECTIVE DATE :
This act shall take effect January 1, 2010, provided however, that the
superintendent of insurance shall promulgate any rules and regulations
necessary for the timely implementation of this act on or before its
effective date.

2009-S1017 (ACTIVE) - Bill Text download pdf

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

                                  1017

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            January 22, 2009
                               ___________

Introduced  by  Sen.  KRUGER -- 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  creating  a  state
  natural disaster reinsurance fund

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

  Section 1. The insurance law is amended by adding a new article 80  to
read as follows:
                                ARTICLE 80
                    NATURAL DISASTER REINSURANCE FUND
SECTION 8001. PURPOSE.
        8002. DEFINITIONS.
        8003. NATURAL DISASTER REINSURANCE FUND.
        8004. OPERATION OF THE FUND.
        8005. TAXATION.
        8006. PROHIBITIONS.
  S  8001. PURPOSE. THE PURPOSE OF THIS ARTICLE IS TO CREATE THE NATURAL
DISASTER REINSURANCE FUND TO BE FINANCED THROUGH VOLUNTARY PARTICIPATION
BY INSURERS. THE FUND WILL PROVIDE SUBSCRIBING COMPANIES WITH A POOL  OF
AVAILABLE  FUNDS  TO BE ACCESSED WHEN A CATASTROPHIC EVENT RAISES CLAIMS
ABOVE A GIVEN LEVEL AND WILL THUS REDUCE  THE  POTENTIAL  FOR  INSURANCE
COMPANY  INSOLVENCIES  DUE  TO  NATURAL DISASTERS AND OTHER CATASTROPHIC
EVENTS.
  S 8002. DEFINITIONS. AS USED IN THIS ARTICLE THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  (A) "NATURAL DISASTER" OR "CATASTROPHIC  EVENT"  SHALL  MEAN  A  MAJOR
HURRICANE,  TORNADO,  EARTHQUAKE,  TIDAL  WAVE, MAJOR FLOOD OR ANY OTHER
EVENT DECLARED A DISASTER BY THE GOVERNOR.
  (B) "FUND" SHALL MEAN THE NATURAL DISASTER REINSURANCE FUND CREATED BY
THIS ARTICLE.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06661-01-9

S. 1017                             2

  S 8003. NATURAL DISASTER REINSURANCE FUND. THERE SHALL BE  CREATED  IN
THE  CUSTODY  OF  THE SUPERINTENDENT A NATURAL DISASTER REINSURANCE FUND
FINANCED THROUGH VOLUNTARY PARTICIPATION OF INSURERS IN THIS STATE.  THE
STATE  SHALL  ESTABLISH  AND  ADJUST,  WHEN NECESSARY, THE RATES FOR THE
REINSURANCE COVERAGE USING GENERALLY ACCEPTED ACTUARIAL PRINCIPLES. SUCH
FUNDS  SHALL BE HELD IN TRUST BY THE STATE AND SHALL BE REMITTED ONLY IN
ACCORDANCE WITH THE TERMS OF SECTION EIGHT THOUSAND FOUR OF  THIS  ARTI-
CLE.  THE  STATE  SHALL  INVEST  A PERCENTAGE OF THE AMOUNTS AS IT DEEMS
APPROPRIATE.
  S 8004. OPERATION OF THE FUND.  ANY  PARTICIPATING  INSURER  SHALL  BE
ELIGIBLE  TO  MAKE  A  CLAIM  AGAINST THE FUND IF A NATURAL DISASTER, OR
SERIES OF NATURAL DISASTERS OCCURRING  WITHIN  A  TWELVE  MONTH  PERIOD,
RESULTS  IN  CLAIMS EXCEEDING FIFTEEN PERCENT OF THE INDUSTRY'S SURPLUS.
CLAIMS SHALL BE PAID IN ACCORDANCE WITH PROCEDURES  PROMULGATED  BY  THE
SUPERINTENDENT.
  S 8005. TAXATION. ANY AMOUNTS DEPOSITED INTO THE FUND ACCOUNT, INCLUD-
ING  INVESTMENTS  MADE  PURSUANT TO SECTION EIGHT THOUSAND THREE OF THIS
ARTICLE, SHALL BE EXEMPT FROM TAXATION BY THE STATE OR  BY  ANY  COUNTY,
MUNICIPALITY OR LOCAL TAXING AUTHORITY.
  S  8006.  PROHIBITIONS.  INSURERS  PARTICIPATING  IN THE FUND SHALL BE
PROHIBITED FROM INCREASING ANY PREMIUMS BASED UPON PAYMENTS MADE TO  THE
FUND.
  S  2.  This  act shall take effect January 1, 2010, provided, however,
that the superintendent of insurance may promulgate any rules and  regu-
lations necessary for the timely implementation of this act on or before
its effective date.

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Senate Bill S1017

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

2009-S1017 (ACTIVE) - Details

2009-S1017 (ACTIVE) - Summary

2009-S1017 (ACTIVE) - Sponsor Memo

2009-S1017 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1017

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Sponsored By

Carl Kruger

Archive: Last Bill Status - In Senate Committee Insurance Committee

2009-S1017 (ACTIVE) - Details

2009-S1017 (ACTIVE) - Summary

2009-S1017 (ACTIVE) - Sponsor Memo

2009-S1017 (ACTIVE) - Bill Text download pdf

Comments