NY State Senate Bill 2009-S7640

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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 28, 2010	referred to insurance

2009-S7640 (ACTIVE) - Details

See Assembly Version of this Bill:: A10481
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §7120, Ins L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S3366, A5859, A8899
2013-2014: S3543, A6326
2015-2016: S1434
2017-2018: S697
2019-2020: S3504
2021-2022: S3773
2023-2024: S2792

2009-S7640 (ACTIVE) - Summary

Relates to the redomestication of insurance companies.

2009-S7640 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S7640

 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 Bill.

 SUMMARY OF PROVISIONS :
This bill would amend §7120 to the Insurance Law to more closely
conform New York law 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.  In order to be eligible for
redomestication, the insurer would have to demonstrate to the
satisfaction of the Superintendent that the redomestication would
further the regulatory efficiency of the holding company system which
controls the insurer. The redomesticating insurer would also be
required to demonstrate that, upon redomestication, it will be in
compliance with all applicable requirements of the Insurance Law. In

addition, the redomesticating insurer would be required to demonstrate
to the satisfaction of the Superintendent that the redomestication
will not result in a reduction in the number of employees employed by
the company in New York State or a reduction in the number of offices
or facilities located in New York State.

Upon redomestication, 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.

 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. The need for this bill became apparent as insurance
regulators in various states attempted to sort out the problems
resulting from the downfall of AIG. Due to the complexity of AIG's
corporate structure and the fact that AIG had affiliated insurance
companies domiciled in nineteen different states, the NAIC had to form
a task force of insurance commissioners from nineteen states to
effectively monitor AIG's financial condition.  This cumbersome
arrangement made it difficult to unravel the problems resulting from
the downfall of AIG and ensure appropriate regulation of AIG's
insurance entities going forward.

The AIG experience led state regulators to examine the corporate
structures of insurance companies within their jurisdictions and they
have found that other insurance companies have similarly complex
corporate structures. Some large insurance companies have subsidiaries
domiciled in multiple states because as they have grown, they have
acquired subsidiaries domiciled in different states.  Accordingly,
some insurance regulators have urged insurers to simplify their
corporate structures so as to increase regulatory effectiveness and
efficiency. The Massachusetts Insurance Commissioner, in particular,
has urged holding companies domiciled in Massachusetts to endeavor to
reduce the complexity of their corporate structures by reducing the
number of states in which subsidiaries are domiciled.


Forty-one states have adopted a version of the NAIC Redomestication
Model Bill, which provides for a redomestication process which is
efficient, effective and not unduly cumbersome. Unfortunately,
however, New York State has not adopted this law and under current New
York law, the redomestication process is a very difficult, time
consuming, confusing and cumbersome process. Accordingly, insurers
seeking to comply with the wishes of their home state regulator to
simplify their corporate structure have run into a roadblock if they
have a subsidiary domiciled in New York. This bill would remove this
roadblock by enacting substantial parts of the NAIC Redomestication
Model Bill in New York.

By adopting substantial parts 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.

It is important to note that this bill would only allow an insurance
company to redomesticate if the company demonstrates to the
satisfaction of the Superintendent of Insurance that the
redomestication will increase regulatory efficiency and will not
result in a loss of jobs in New York state or a closure of New York
offices or facilities, thereby ensuring that this legislation will not
have a negative impact on employment in New York State.

 LEGISLATIVE HISTORY :
New Bill.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
Immediately.

2009-S7640 (ACTIVE) - Bill Text download pdf

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

                                  7640

                            I N  S E N A T E

                             April 28, 2010
                               ___________

Introduced  by  Sen. BRESLIN -- 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; and
  (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.
  (B-1) A TRANSFERRING COMPANY TRANSFERRING FROM THIS STATE SHALL:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD16668-02-0

S. 7640                             2

  (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 SHALL CEASE TO BE A DOMESTIC COMPA-
NY, AND SHALL BE ADMITTED TO THIS STATE IF QUALIFIED AS A FOREIGN COMPA-
NY.  THE  SUPERINTENDENT  SHALL  APPROVE  THE  TRANSFER UNLESS HE OR SHE
DETERMINES THE TRANSFER IS NOT IN THE INTEREST OF THE  POLICYHOLDERS  OF
THIS STATE;
  (2)  COMPLY WITH THE APPLICABLE REQUIREMENTS OF THIS CHAPTER REGARDING
THE ORGANIZATION AND LICENSING OF A FOREIGN COMPANY OF THE SAME TYPE;
  (3) DEMONSTRATE TO THE SATISFACTION OF  THE  SUPERINTENDENT  THAT  THE
REDOMESTICATION  WILL NOT RESULT IN A REDUCTION IN THE NUMBER OF EMPLOY-
EES EMPLOYED BY THE TRANSFERRING COMPANY IN THIS STATE OR A REDUCTION IN
THE NUMBER OF THE COMPANY'S OFFICES OR FACILITIES LOCATED IN THIS STATE;
  (4) DEMONSTRATE TO THE SATISFACTION OF  THE  SUPERINTENDENT  THAT  THE
REDOMESTICATION  WILL FURTHER THE MORE EFFICIENT REGULATION OF THE HOLD-
ING COMPANY SYSTEM WHICH CONTROLS THE COMPANY;
  (5) 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 FOREIGN COMPANY OF THE SAME TYPE;
  (6) SUBMIT TO THE SUPERINTENDENT ALL DOCUMENTS AND  FILINGS  NECESSARY
TO COMPLY WITH PARAGRAPHS TWO AND THREE OF THIS SUBSECTION; AND
  (7)  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) 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) 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; 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) 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) All agents' appointments and licenses, rates, and other items that
the  superintendent  allows,  existing  at  the time of redomestication,
shall continue in full force and effect in  accordance  with  applicable
provisions of this chapter.
  S 2. This act shall take effect immediately.

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Senate Bill S7640

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

2009-S7640 (ACTIVE) - Details

2009-S7640 (ACTIVE) - Summary

2009-S7640 (ACTIVE) - Sponsor Memo

2009-S7640 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S7640

Share this bill

Sponsored By

Neil D. Breslin

Archive: Last Bill Status - In Senate Committee Insurance Committee

2009-S7640 (ACTIVE) - Details

2009-S7640 (ACTIVE) - Summary

2009-S7640 (ACTIVE) - Sponsor Memo

2009-S7640 (ACTIVE) - Bill Text download pdf

Comments