S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7087
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                               May 27, 2021
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on  Energy  and  Telecommuni-
   cations
 
 AN  ACT  to amend the public authorities law, the tax law and the insur-
   ance law, in relation to authorizing the power authority of the  state
   of New York to form a pure captive insurance company

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 1005 of the public authorities law  is  amended  by
 adding a new subdivision 28 to read as follows:
   28.  THE  AUTHORITY  MAY  ESTABLISH  A  SUBSIDIARY CORPORATION FOR THE
 PURPOSE OF FORMING A PURE  CAPTIVE  INSURANCE  COMPANY  AS  PROVIDED  IN
 SECTION  SEVEN  THOUSAND  TWO  OF THE INSURANCE LAW. THE MEMBERS OF SUCH
 SUBSIDIARY CORPORATION OF THE AUTHORITY SHALL BE THE SAME PERSONS  HOLD-
 ING THE OFFICES OF MEMBERS OF THE AUTHORITY. SUCH SUBSIDIARY CORPORATION
 SHALL  HAVE  ALL OF THE PRIVILEGES, IMMUNITIES, TAX EXEMPTIONS AND OTHER
 EXEMPTIONS OF THE AUTHORITY AND OF THE AUTHORITY'S  PROPERTY,  FUNCTIONS
 AND  ACTIVITIES.  THE  SUBSIDIARY  CORPORATION OF THE AUTHORITY SHALL BE
 SUBJECT TO SUIT IN ACCORDANCE WITH SECTION  ONE  THOUSAND  SEVENTEEN  OF
 THIS  TITLE.  THE  EMPLOYEES  OF ANY SUCH SUBSIDIARY CORPORATION, EXCEPT
 THOSE WHO ARE ALSO EMPLOYEES OF  THE  AUTHORITY,  SHALL  NOT  BE  DEEMED
 EMPLOYEES OF THE AUTHORITY.
   §  2.  Subdivision  (a)  of section 1500 of the tax law, as amended by
 section 21 of part A of chapter 59 of the laws of 2014,  is  amended  to
 read as follows:
   (a)  The  term "insurance corporation" includes a corporation, associ-
 ation, joint stock company or association, person, society,  aggregation
 or  partnership,  by  whatever  name known, doing an insurance business,
 and, notwithstanding the provisions of section fifteen hundred twelve of
 this article, shall include (1) a risk retention  group  as  defined  in
 subsection  (n)  of section five thousand nine hundred two of the insur-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10382-02-1

 S. 7087                             2
 
 ance law, (2) the state insurance fund and (3)  a  corporation,  associ-
 ation,  joint stock company or association, person, society, aggregation
 or partnership doing an insurance business as a member of the  New  York
 insurance  exchange described in section six thousand two hundred one of
 the  insurance  law.  The  definition  of  the  "state  insurance  fund"
 contained  in  this  subdivision  shall  be limited in its effect to the
 provisions of this article and the related provisions  of  this  chapter
 and  shall  have  no  force  and  effect other than with respect to such
 provisions. The  term  "insurance  corporation"  shall  also  include  a
 captive insurance company doing a captive insurance business, as defined
 in  subsections (c) and (b), respectively, of section seven thousand two
 of the insurance law; provided, however, "insurance  corporation"  shall
 not include the metropolitan transportation authority, THE POWER AUTHOR-
 ITY  OF  NEW YORK OR ANY STATUTORY SUBSIDIARY OR AFFILIATE THEREOF, or a
 public benefit corporation or not-for-profit  corporation  formed  by  a
 city with a population of one million or more pursuant to subsection (a)
 of  section  seven  thousand five of the insurance law, each of which is
 expressly exempt from the payment of fees, taxes or assessments, whether
 state or local; and provided further "insurance  corporation"  does  not
 include  any  combinable  captive insurance company. The term "insurance
 corporation" shall also include an unauthorized insurer  operating  from
 an office within the state, pursuant to paragraph five of subsection (b)
 of  section  one  thousand one hundred one and subsection (i) of section
 two thousand one hundred  seventeen  of  the  insurance  law.  The  term
 "insurance  corporation" also includes a health maintenance organization
 required to obtain a certificate of authority under  article  forty-four
 of the public health law.
   §  3. Subsections (e) and (g) of section 7002 of the insurance law, as
 amended by chapter 188 of the laws of  2003,  are  amended  to  read  as
 follows:
   (e) "Industrial insured" means an insured:
   (1) whose net worth exceeds one hundred million dollars;
   (2)  who  is  a  member  of  a  holding company system whose net worth
 exceeds one hundred million dollars;
   (3) who is the metropolitan transportation authority and its statutory
 subsidiaries. When filing an application to form a pure  captive  insur-
 ance  company  the  metropolitan  transportation  authority shall submit
 written notice of such filing to the governor, the  temporary  president
 of the senate and the speaker of the assembly; [or]
   (4) WHO IS THE POWER AUTHORITY OF THE STATE OF NEW YORK AND ANY STATU-
 TORY SUBSIDIARY OR AFFILIATE THEREOF. WHEN FILING AN APPLICATION TO FORM
 A  PURE CAPTIVE INSURANCE COMPANY THE POWER AUTHORITY SHALL SUBMIT WRIT-
 TEN NOTICE OF SUCH FILING TO THE GOVERNOR, THE  TEMPORARY  PRESIDENT  OF
 THE SENATE AND THE SPEAKER OF THE ASSEMBLY; OR
   (5)  who  is  a  city  with  a population of one million or more. When
 filing an application to form a pure captive insurance company,  a  city
 with  a population of one million or more shall submit written notice of
 such filing to the governor, the temporary president of the  senate  and
 the speaker of the assembly.
   (g)  "Industrial insured group" means any group of unaffiliated indus-
 trial insureds that are engaged in  similar  or  related  businesses  or
 activities,  however,  the  metropolitan  transportation  authority, THE
 POWER AUTHORITY OF THE STATE OF NEW YORK AND ANY STATUTORY SUBSIDIARY OR
 AFFILIATE THEREOF and cities with a population of one  million  or  more
 shall  not  be a member of an industrial insured group, and that collec-
 tively:

 S. 7087                             3
 
   (1) own, control or hold with power to vote  all  of  the  outstanding
 voting shares of stock of a group captive insurance company incorporated
 as a stock insurer; or
   (2)  represent  one  hundred  percent of the voting members of a group
 captive insurance company organized as a mutual insurer.
   § 4. Subdivision (a) of section 1502-b of the tax law, as  amended  by
 section  22  of  part A of chapter 59 of the laws of 2014, is amended to
 read as follows:
   (a) In lieu of the taxes and tax surcharge imposed by sections fifteen
 hundred one, fifteen hundred two-a, fifteen hundred five-a, and  fifteen
 hundred ten of this article, every captive insurance company licensed by
 the  superintendent  of financial services pursuant to the provisions of
 article seventy of the insurance law, other than the metropolitan trans-
 portation authority, THE POWER AUTHORITY OF NEW YORK  OR  ANY  STATUTORY
 SUBSIDIARY  OR  AFFILIATE  THEREOF,  and a public benefit corporation or
 not-for-profit corporation formed by a city with  a  population  of  one
 million  or  more  pursuant  to subsection (a) of section seven thousand
 five of the insurance law, each of which is expressly  exempt  from  the
 payment  of fees, taxes or assessments whether state or local, and other
 than combinable captive insurance company, shall, for the  privilege  of
 exercising  its  corporate  franchise, pay a tax on (1) all gross direct
 premiums, less return premiums thereon,  written  on  risks  located  or
 resident  in  this  state and (2) all assumed reinsurance premiums, less
 return premiums thereon, written on risks located or  resident  in  this
 state.  The  rate  of  the tax imposed on gross direct premiums shall be
 four-tenths of one percent on all  or  any  part  of  the  first  twenty
 million  dollars  of premiums, three-tenths of one percent on all or any
 part of the second twenty million dollars of premiums, two-tenths of one
 percent on all or any part of the third twenty million dollars of premi-
 ums, and seventy-five thousandths of  one  percent  on  each  dollar  of
 premiums thereafter. The rate of the tax on assumed reinsurance premiums
 shall  be  two  hundred twenty-five thousandths of one percent on all or
 any part of the first twenty million dollars of  premiums,  one  hundred
 and  fifty  thousandths  of one percent on all or any part of the second
 twenty million dollars of premiums, fifty thousandths of one percent  on
 all  or  any  part  of  the third twenty million dollars of premiums and
 twenty-five thousandths of one percent on each dollar of premiums there-
 after. The tax imposed by this section shall be equal to the greater  of
 (i)  the  sum  of  the  tax imposed on gross direct premiums and the tax
 imposed on assumed reinsurance premiums or (ii) five thousand dollars.
   § 5. This act shall take effect immediately.