S T A T E   O F   N E W   Y O R K
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                                   7153
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 11, 2023
                                ___________
 
 Introduced by M. of A. SIMONE, STIRPE, HEVESI, FAHY, SEAWRIGHT, BENEDET-
   TO,  MAGNARELLI,  WEPRIN,  THIELE,  PAULIN,  BRAUNSTEIN, OTIS, COLTON,
   JEAN-PIERRE,  PEOPLES-STOKES,  HUNTER,  STECK,  D. ROSENTHAL,  LAVINE,
   L. ROSENTHAL,  DICKENS,  GONZALEZ-ROJAS -- Multi-Sponsored by -- M. of
   A. COOK, EPSTEIN, GLICK, LUPARDO, SIMON -- read once and  referred  to
   the Committee on Insurance
 
 AN ACT to amend the insurance law and the state finance law, in relation
   to creating the health insurance guaranty fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Subsection (e) of section 7402 of  the  insurance  law  is
 amended to read as follows:
   (e)  Is  found,  after  examination,  to be in such condition that its
 further transaction of business will be hazardous to its  policyholders,
 creditors,  or  the  public.    THIS  SHALL INCLUDE A HEALTH INSURER, AS
 DEFINED IN ARTICLE EIGHTY-ONE OF  THIS  CHAPTER,  THAT  IS  CONSISTENTLY
 UNABLE  TO  MEET  THE REQUIREMENTS OF SECTION THREE THOUSAND TWO HUNDRED
 TWENTY-FOUR-A OF THIS CHAPTER.
   § 2. Section 7403 of the insurance law is  amended  by  adding  a  new
 subsection (e) to read as follows:
   (E)(1)  UPON A DETERMINATION BY THE SUPERINTENDENT AND THE REHABILITA-
 TOR THAT FUNDS FROM THE NEW YORK HEALTH  INSURANCE  CONSUMER  PROTECTION
 SECURITY  FUND ARE NECESSARY TO MEET THE REQUIREMENTS OF ARTICLE EIGHTY-
 ONE OF THIS CHAPTER, THE SUPERINTENDENT SHALL MAKE AVAILABLE SUCH  FUNDS
 AS ARE NECESSARY, PURSUANT TO THE REQUIREMENTS OF SUCH ARTICLE.
   (2)  THE  SUPERINTENDENT  SHALL ADVANCE SUCH FUNDS AS MAY BE NECESSARY
 PURSUANT TO SUBSECTION (D) OF SECTION EIGHT THOUSAND ONE HUNDRED FOUR OF
 THIS CHAPTER. THE REHABILITATOR AND THE SUPERINTENDENT SHALL ESTABLISH A
 PLAN, IF POSSIBLE, FOR REPAYMENT OF THE ADVANCE, AT A RATE  OF  INTEREST
 DETERMINED BY THE SUPERINTENDENT.
   (3)  ADVANCES, PURSUANT TO PARAGRAPH TWO OF THIS SUBSECTION, SHALL, IN
 ALL RESPECTS EXCEPT TO RATE OF INTEREST, BE SUBJECT TO THE PROVISIONS OF
 SECTION ONE THOUSAND THREE HUNDRED SEVEN OF THIS CHAPTER, PROVIDED  THAT
 IN  THE  EVENT THAT AN INSURER WHICH HAS RECEIVED AN ADVANCE PURSUANT TO
 
              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07942-01-3
 A. 7153                             2
 
 THIS SUBSECTION IS SUBSEQUENTLY THE SUBJECT OF AN ORDER OF  LIQUIDATION,
 THE  CLAIM  OF  THE  FUND FOR THE ADVANCE AND ANY ACCRUED INTEREST SHALL
 HAVE PRIORITY ABOVE CLAIMS OF ALL  NONSECURED  CREDITORS,  PROVIDED  THE
 REQUIREMENTS  OF  ARTICLE  EIGHTY-ONE OF THIS CHAPTER HAVE BEEN MET, AND
 SHALL BE PAID IMMEDIATELY TO THE FUND OR AS SOON AS ASSETS ARE AVAILABLE
 THEREFOR.
   § 3. Paragraph 1 of subsection (f) of section 7405  of  the  insurance
 law, as amended by chapter 33 of the laws of 2005, is amended to read as
 follows:
   (1)  No  later  than  one  hundred  eighty days after a final order of
 liquidation with an adjudication of insolvency of an insurer by a  court
 of  competent jurisdiction of this state, the liquidator may in his sole
 discretion make application to the court for approval of a  proposal  to
 disburse  assets  out  of  marshalled  assets, from time to time as such
 assets become available, to any fund established by article  seventy-six
 of  this  chapter, article six-A of the workers' compensation law [and],
 any foreign entity performing a similar function, AND  ANY  FUND  ESTAB-
 LISHED PURSUANT TO ARTICLE EIGHTY-ONE OF THIS CHAPTER, PROVIDED THAT THE
 REQUIREMENTS  OF  SUBSECTION  (A)  OF SECTION EIGHT THOUSAND ONE HUNDRED
 THREE OF THIS CHAPTER HAVE BEEN MET, having obligations because of  such
 insolvency.  If  the  liquidator  determines that there are insufficient
 assets to disburse, the application authorized by this subsection  shall
 be  considered  satisfied  by  a  filing  by  the liquidator stating the
 reasons for this determination.
   § 4. The insurance law is amended by adding a new article 81  to  read
 as follows:
                                 ARTICLE 81
                      HEALTH INSURANCE GUARANTY FUND
 SECTION 8101. PURPOSE.
         8102. DEFINITIONS.
         8103.  NEW  YORK  HEALTH  INSURANCE CONSUMER PROTECTION SECURITY
                 FUND.
         8104. POWERS OF THE SUPERINTENDENT.
   § 8101. PURPOSE. THE PURPOSE OF THIS ARTICLE  IS  TO  PROTECT  COVERED
 INDIVIDUALS  AGAINST  THE  FAILURE  OR  INABILITY OF A HEALTH INSURER TO
 PERFORM ITS CONTRACTUAL  OBLIGATIONS  DUE  TO  FINANCIAL  IMPAIRMENT  OR
 INSOLVENCY. TO PROVIDE THIS PROTECTION, THE LEGISLATURE HEREBY CREATES A
 NEW  YORK HEALTH INSURANCE CONSUMER PROTECTION SECURITY FUND TO SERVE AS
 A GUARANTY FUND MECHANISM CAPABLE OF INSURING THAT THE  FINANCIAL  OBLI-
 GATIONS  OF HEALTH INSURERS TO THEIR ENROLLEES AND HEALTH CARE PROVIDERS
 ARE SATISFIED.
   § 8102. DEFINITIONS. AS USED IN THIS ARTICLE:
   (A) "FUND" MEANS THE NEW YORK  HEALTH  INSURANCE  CONSUMER  PROTECTION
 SECURITY FUND CREATED BY THIS ARTICLE.
   (B)  "HEALTH  INSURER"  MEANS  ANY  ORGANIZATION  OR  ENTITY PROVIDING
 REIMBURSEMENT FOR A COVERED EXPENSE UNDER ANY INDIVIDUAL, GROUP OR BLAN-
 KET POLICY OR CONTRACT COVERING THE KINDS OF INSURANCE DESCRIBED IN ITEM
 (I) OF PARAGRAPH THREE OF SUBSECTION (A) OF  SECTION  ONE  THOUSAND  ONE
 HUNDRED  THIRTEEN  OF THIS CHAPTER AND LICENSED UNDER ARTICLE THIRTY-TWO
 OR FORTY-TWO OF THIS CHAPTER, WHICH IS NOT A MEMBER OF,  OR  PARTICIPANT
 IN,  OR A SUBSIDIARY OF A MEMBER OF OR PARTICIPANT IN, THE FUNDS CREATED
 PURSUANT TO ARTICLES SEVENTY-FIVE,  SEVENTY-SIX,  AND  SEVENTY-SEVEN  OF
 THIS  CHAPTER; A CORPORATION ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS
 CHAPTER; OR AN ORGANIZATION CERTIFIED UNDER ARTICLE  FORTY-FOUR  OF  THE
 PUBLIC HEALTH LAW.
 A. 7153                             3
 
   (C)  "CONTRACTUAL  OBLIGATION" MEANS ANY PAYMENT OR REIMBURSEMENT OWED
 BY A HEALTH INSURER FOR A COVERED BENEFIT UNDER A POLICY,  CONTRACT,  OR
 COMPREHENSIVE HEALTH BENEFITS PLAN.
   (D)  "IMPAIRED  HEALTH  INSURER"  MEANS  A HEALTH INSURER FOR WHOM THE
 SUPERINTENDENT HAS INITIATED A PROCEEDING UNDER THE PROVISIONS OF  ARTI-
 CLE SEVENTY-FOUR OF THIS CHAPTER.
   (E) "COMMISSIONER" MEANS THE COMMISSIONER OF TAXATION AND FINANCE.
   §  8103.  NEW YORK HEALTH INSURANCE CONSUMER PROTECTION SECURITY FUND.
 (A) CONSISTENT WITH THE PROVISIONS OF SUBDIVISION ONE OF  SECTION  NINE-
 TY-EIGHT-D  OF  THE STATE FINANCE LAW, THERE IS HEREBY ESTABLISHED A NEW
 YORK HEALTH INSURANCE CONSUMER PROTECTION SECURITY FUND. SUCH FUND SHALL
 BE USED IN THE PAYMENT OF UNPAID CONTRACTUAL OBLIGATIONS, IN WHOLE OR IN
 PART, BY AN IMPAIRED HEALTH INSURER,  AFTER  APPLICATION  OF  ANY  FUNDS
 AVAILABLE FROM A PROCEEDING IMPLEMENTED PURSUANT TO ARTICLE SEVENTY-FOUR
 OF THIS CHAPTER.
   (B)(1)  PAYMENT INTO THE FUND BY HEALTH INSURERS SHALL BE MADE THROUGH
 AN ASSESSMENT BASED ON THE PREMIUMS RECEIVED BY  A  HEALTH  INSURER  FOR
 BUSINESS  IN  THIS  STATE  FOR  THE  MOST RECENT CALENDAR YEAR FOR WHICH
 PREMIUM INFORMATION IS AVAILABLE, EXCLUDING PREMIUMS RECEIVED FOR  INDI-
 VIDUALS  UNDER  TITLE XIX OF THE SOCIAL SECURITY ACT. THE SUPERINTENDENT
 SHALL ESTABLISH ASSESSMENT LEVELS SUFFICIENT TO  FULLY  PAY  ALL  UNPAID
 CLAIMS  OF  AN IMPAIRED HEALTH INSURER, PURSUANT TO SUBSECTIONS (B), (C)
 AND (D) OF SECTION EIGHT THOUSAND ONE HUNDRED FOUR OF THIS ARTICLE,  AND
 TO  REPAY  ANY  TRANSFERS  MADE  PURSUANT TO SUBDIVISION FIVE OF SECTION
 SEVENTY-TWO OF THE STATE FINANCE LAW.
   (2) THE SUPERINTENDENT MAY EXEMPT, ABATE OR  DEFER,  IN  WHOLE  OR  IN
 PART,  THE  ASSESSMENT  OF A HEALTH INSURER IF THE SUPERINTENDENT DETER-
 MINES THAT PAYMENT OF THE ASSESSMENT WOULD ENDANGER THE ABILITY  OF  THE
 HEALTH  INSURER  TO  FULFILL  ITS  CONTRACTUAL  OBLIGATIONS OR PLACE THE
 HEALTH INSURER IN AN UNSAFE OR UNSOUND FINANCIAL CONDITION.
   (3) IN THE EVENT AN ASSESSMENT AGAINST A HEALTH INSURER  IS  EXEMPTED,
 ABATED  OR  DEFERRED,  IN  WHOLE  OR  IN  PART, THE AMOUNT BY WHICH THAT
 ASSESSMENT IS EXEMPTED, ABATED OR DEFERRED  SHALL  BE  ASSESSED  AGAINST
 OTHER HEALTH INSURERS IN A MANNER CONSISTENT WITH THIS SECTION.
   (C)  REPAYMENT  OF  HEALTH INSURERS WHEN FUNDS BECOME AVAILABLE FROM A
 PROCEEDING PURSUANT TO ARTICLE SEVENTY-FOUR OF  THIS  CHAPTER  SHALL  BE
 PROPORTIONATE TO THE CONTRIBUTION FROM EACH HEALTH INSURER.
   §  8104.  POWERS  OF  THE  SUPERINTENDENT. (A) FOR ANY IMPAIRED HEALTH
 INSURER, THE  SUPERINTENDENT  SHALL  DIRECT  THE  COMMISSIONER  TO  MAKE
 PAYMENTS FROM THE NEW YORK HEALTH INSURANCE CONSUMER PROTECTION SECURITY
 FUND  TO  ENSURE  THAT  PAYMENTS  TO HEALTH CARE PROVIDERS, OR INDEMNITY
 PAYMENTS TO COVERED INDIVIDUALS, ARE MADE IN FULL FOR SERVICES  PROVIDED
 THAT  WOULD  NOT  OTHERWISE  BE FULLY REIMBURSED DESPITE THE PROCEEDINGS
 IMPLEMENTED PURSUANT TO ARTICLE SEVENTY-FOUR OF THIS  CHAPTER.  SERVICES
 PROVIDED  EITHER PRIOR TO THE IMPLEMENTATION OF A PROCEEDING UNDER ARTI-
 CLE SEVENTY-FOUR  OF  THIS  CHAPTER  OR  AFTER  IMPLEMENTATION  OF  SUCH
 PROCEEDING  SHALL  BE  ELIGIBLE  FOR REIMBURSEMENT, IN PART OR IN WHOLE,
 FROM THE FUND. PAYMENT IN FULL SHALL BE DETERMINED BY THE TERMS  OF  THE
 HEALTH  INSURANCE  CONTRACT, ANY CONTRACT BETWEEN A HEALTH CARE PROVIDER
 AND THE IMPAIRED HEALTH INSURER AND ANY APPLICABLE STATE OR FEDERAL LAWS
 OR REGULATIONS INCLUDING BUT NOT LIMITED TO PART H OF CHAPTER  SIXTY  OF
 THE LAWS OF TWO THOUSAND FOURTEEN AND SECTION TWO THOUSAND NINETEEN-A OF
 THE PUBLIC HEALTH SERVICES ACT, AS AMENDED BY THE PATIENT PROTECTION AND
 AFFORDABLE CARE ACT.
   (B)  THE SUPERINTENDENT SHALL DIRECT THE COMMISSIONER TO MAKE PAYMENTS
 TO ENSURE THAT PAYMENT IN FULL IS MADE  TO  HEALTH  CARE  PROVIDERS,  OR
 A. 7153                             4

 INDEMNITY  PAYMENTS TO COVERED INDIVIDUALS, FOR SERVICES PROVIDED BEFORE
 THE IMPLEMENTATION OF PROCEEDINGS PURSUANT TO  ARTICLE  SEVENTY-FOUR  OF
 THIS  CHAPTER  WITHIN THIRTY DAYS OF THE IMPLEMENTATION OF SUCH PROCEED-
 ING.
   (C)  THE  SUPERINTENDENT  SHALL DIRECT THE COMMISSIONER TO ENSURE THAT
 PAYMENT IN FULL IS MADE TO HEALTH CARE PROVIDERS, OR INDEMNITY  PAYMENTS
 TO  COVERED  INDIVIDUALS, FOR SERVICES PROVIDED AFTER THE IMPLEMENTATION
 OF PROCEEDINGS PURSUANT TO ARTICLE SEVENTY-FOUR OF THIS  CHAPTER  WITHIN
 THIRTY DAYS OF RECEIPT OF A CLAIM.
   (D)  IF NECESSARY, THE SUPERINTENDENT SHALL DIRECT THE COMMISSIONER TO
 ADVANCE  MONIES  FROM  THE  FUND  TO  COMPLY  WITH  THE  PROVISIONS   OF
 SUBSECTIONS (B) AND (C) OF THIS SECTION.
   (E)  THE SUPERINTENDENT SHALL NOTIFY THE DIRECTOR OF THE BUDGET OF THE
 NEED FOR MONIES TO  BE  TRANSFERRED  PURSUANT  TO  SUBDIVISION  FIVE  OF
 SECTION SEVENTY-TWO OF THE STATE FINANCE LAW TO MEET THE REQUIREMENTS OF
 SUBSECTIONS (B), (C) AND (D) OF THIS SECTION.
   (F) THE SUPERINTENDENT SHALL DIRECT THE COMMISSIONER TO USE THE MONIES
 OF  THE FUND TO REPAY ANY TRANSFERS MADE PURSUANT TO SUBDIVISION FIVE OF
 SECTION SEVENTY-TWO OF THE STATE FINANCE LAW, WHEN SUCH FUNDS  ARE  PAID
 PURSUANT  TO  SUBSECTION (B) OF SECTION EIGHT THOUSAND ONE HUNDRED THREE
 OF THIS ARTICLE.
   (G) THE SUPERINTENDENT SHALL  ENSURE  THAT  THE  COST  OF  ASSESSMENTS
 ESTABLISHED  PURSUANT  TO  SUBDIVISION (B) OF SECTION EIGHT THOUSAND ONE
 HUNDRED THREE OF THIS ARTICLE ARE NOT INCLUDED IN PREMIUMS BY ANY HEALTH
 INSURER.
   § 5. Section 72 of the state finance law is amended by  adding  a  new
 subdivision 5 to read as follows:
   5.  NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, UPON NOTIFI-
 CATION FROM THE SUPERINTENDENT OF FINANCIAL SERVICES  OF  THE  NEED  FOR
 MONIES  TO  MEET  THE  REQUIREMENTS  OF  SUBSECTIONS (B), (C) AND (D) OF
 SECTION EIGHT THOUSAND ONE HUNDRED FOUR OF THE INSURANCE LAW, THE DIREC-
 TOR OF THE BUDGET SHALL TRANSFER SUCH FUNDS AS ARE NECESSARY.
   § 6. The state finance law is amended by adding a new section 98-d  to
 read as follows:
   §  98-D.  NEW YORK HEALTH INSURANCE CONSUMER PROTECTION SECURITY FUND.
 1. THERE IS HEREBY ESTABLISHED IN THE CUSTODY OF THE COMMISSIONER OF THE
 DEPARTMENT OF TAXATION AND  FINANCE  AN  ACCOUNT  OF  THE  MISCELLANEOUS
 SPECIAL  REVENUE  FUND  TO  BE  KNOWN  AS  THE NEW YORK HEALTH INSURANCE
 CONSUMER PROTECTION SECURITY FUND ACCOUNT.
   2. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE  CONTRARY,
 THE  COMMISSIONER  OF  TAXATION  AND  FINANCE  IS  HEREBY AUTHORIZED AND
 DIRECTED TO RECEIVE FOR DEPOSIT TO THE CREDIT OF  THE  NEW  YORK  HEALTH
 INSURANCE CONSUMER PROTECTION SECURITY FUND ACCOUNT, ASSESSMENTS IMPOSED
 PURSUANT  TO  ARTICLE EIGHTY-ONE OF THE INSURANCE LAW AND TRANSFERS FROM
 THE GENERAL FUND PURSUANT TO SUBDIVISION FIVE OF SECTION SEVENTY-TWO  OF
 THIS ARTICLE.
   3.  THE  COMMISSIONER OF TAXATION AND FINANCE SHALL MAKE PAYMENTS FROM
 THE MONIES  ON  DEPOSIT  IN  THE  NEW  YORK  HEALTH  INSURANCE  CONSUMER
 PROTECTION  SECURITY FUND ACCOUNT IN THE AMOUNTS AND AT THE TIMES DETER-
 MINED BY THE SUPERINTENDENT OF INSURANCE.
   § 7. This act shall take effect immediately and shall be applicable to
 any  health  insurer  determined  by  the  superintendent  of  financial
 services,  on  or  after such effective date, to be insolvent within the
 meaning of section 1309 of the insurance law.