NY State Senate Bill 2011-S2582

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 26, 2011	referred to insurance

2011-S2582 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add Art 80 §§8001 - 8006, Ins L
Versions Introduced in 2009-2010 Legislative Session:: S1017

2011-S2582 (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.

2011-S2582 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S2582

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 8001 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 8002 of this
bill provides definitions of "natural disaster" or "catastrophic
event" as well as the definition of "fund" pursuant to this article.
Section 8003 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 funds in trust and shall allow them to be
absolved only when participating insurers make claims against the fund.

Section 8004 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 8005 exempts any amounts deposited
into the fund account from taxation by the state or by any county,
municipality or local taxing authority. Section 8006 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, 2012, 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.

2011-S2582 (ACTIVE) - Bill Text download pdf

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

                                  2582

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 26, 2011
                               ___________

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.
                                                           LBD06791-01-1

S. 2582                             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, 2012, 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 S2582

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

2011-S2582 (ACTIVE) - Details

2011-S2582 (ACTIVE) - Summary

2011-S2582 (ACTIVE) - Sponsor Memo

2011-S2582 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2582

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Sponsored By

Carl Kruger

Archive: Last Bill Status - In Senate Committee Insurance Committee

2011-S2582 (ACTIVE) - Details

2011-S2582 (ACTIVE) - Summary

2011-S2582 (ACTIVE) - Sponsor Memo

2011-S2582 (ACTIVE) - Bill Text download pdf

Comments