§ 7603. Property/casualty insurance security fund. (a) (1) The
property/casualty insurance security fund shall be used in the payment
of allowed claims remaining unpaid, in whole or in part, by reason of
the inability due to insolvency of an authorized insurer to meet its
insurance obligations under policies:

(A) on account of claims from motor vehicle accidents as defined in
subsection (f) of section seven thousand six hundred two of this
article,

(B) for all of the kinds of insurance specified in paragraphs four
through fourteen, sixteen, nineteen through twenty-one, twenty-four and
subparagraphs (A) and (B) of paragraph twenty-six of subsection (a) of
section one thousand one hundred thirteen of this chapter with respect
to coverage of property or risks located or resident in this state, or
outside this state but within the United States, its possessions and
territories, and Canada,

(C) for the kind of insurance providing disability benefits pursuant
to article nine of the workers' compensation law issued by an authorized
insurer licensed under article forty-one, sixty-one or sixty-six of this
chapter with respect to coverage of risks located or resident in this
state,

(D) in the kind of insurance providing workers' compensation insurance
pursuant to subsection (j) of section three thousand four hundred twenty
of this chapter,

(E) for the insurance provided by the medical malpractice insurance
association,

(F) for the insurance provided pursuant to subdivision two-a of
section seventy-six of the workers' compensation law if and when
operative,

(G) for the kinds of credit insurance as defined in subparagraphs (B)
and (C) of paragraph seventeen of subsection (a) of section one thousand
one hundred thirteen of this chapter, and

(H) any obligation for the return of unearned premiums on any policy
specified in subparagraphs (A), (B), (C), (D), (E), (F) and (G) hereof,
which shall, for the purposes of this article, be deemed to include the
obligations of an insurer and the medical malpractice insurance
association under medical malpractice claims-made policies to pay to
successor entities the actuarially appropriate amounts for the provision
of coverage to comply with the requirements of subsections (b), (c) and
(d) of section three thousand four hundred thirty-six and paragraphs
two, three and four of subsection (f) of section five thousand five
hundred four of this chapter.

(2) No payment from the property/casualty insurance security fund
shall be made to any person who owns or controls ten percent or more of
the voting securities of the insolvent insurer and no payment on any one
claim shall exceed one million dollars, provided that the amount of
payment on a claim and the aggregate for all claims shall be further
limited by the provisions of paragraph two of subsection (g) of section
seven thousand six hundred two of this article.

(b) (1) Contributions to the property/casualty insurance security fund
shall be determined on the basis of net direct written premiums on
policies insuring property or risks located or resident in this state.

(2) Every insurer shall pay into such fund, upon filing each quarterly
return pursuant to section seven thousand six hundred five of this
article, one-half of one percent of its net direct written premiums as
shown for the period covered by such return.

(c) (1) Whenever the superintendent determines, pursuant to section
seven thousand six hundred six of this article, that the net value of
the property/casualty insurance security fund is at least one hundred
fifty million dollars, no further contributions shall be made after the
fund year in which the determination is first made, but if thereafter
the superintendent determines that payments made from the fund by the
commissioner to the superintendent acting as liquidator, rehabilitator
or conservator have reduced the net value to an amount less than such
amount, the superintendent shall cause contributions to be resumed until
the end of the fund year in which he first determines that such net
value exceeds such amount.

(2) If contributions are so resumed, they shall be apportioned:

(A) ratably among those kinds of insurance as to which the
commissioner made payments during the fund year in which the net value
of the property/casualty insurance security fund was reduced below such
amount, and

(B) among insurers in accordance with their respective amounts of net
direct premiums written in each such kind of insurance.

(d) (1) All income earned on moneys in the fund (after deducting any
amounts paid for allowed claims and administrative expenses during the
preceding year) shall be credited, upon certification by the
superintendent to the commissioner, to the general fund of the state
treasury; except that with respect to all such income earned on or after
July first, nineteen hundred seventy-nine such moneys shall be
distributed annually in the following manner:

(A) Pursuant to regulations of the superintendent, the deficit from
the operations of the New York property insurance underwriting
association shall be credited with such income earned, upon
certification by the superintendent to the commissioner, in a sum not
exceeding such total income earned or the sum of fifteen million dollars
whichever is the lesser in any one year. Such credit shall be in lieu of
a transfer of such funds to the general fund of the state treasury.

(B) Any balance of earned income shall be credited, upon certification
by the superintendent to the commissioner, to the general fund of the
state treasury; but only when the value of the fund exceeds the sum of
two hundred forty million dollars.

(2) The superintendent, after consultation with the commissioner, may
by regulation provide for contributions to be made in the form of
acceptable securities, and for the management and disposition of such
securities. The income from such securities shall be included in the
distribution outlined in paragraph one hereof.

(3) The superintendent is authorized to use the income earned on the
moneys of the fund to offset the deficit of the New York property
insurance underwriting association in accordance with subsection (d) of
section five thousand four hundred five of this chapter, provided that
any income earned on the moneys of the fund which in any one year
exceeds fifteen million dollars or which the superintendent has not
utilized for the purposes of such subsection shall be credited to the
corpus of the fund until the superintendent determines that its net
value is two hundred forty million dollars, and thereafter shall be
credited, upon certification by the superintendent to the commissioner,
to the general fund of the state treasury.

(e) (1) (A) Notwithstanding any other provision of law to the
contrary, the superintendent shall annually no later than November first
in each year submit to the director of the budget a request for an
appropriation of ninety million dollars. The governor shall include such
amount in a budget bill for the next state fiscal year. The state
comptroller shall encumber the amount so appropriated before the end of
the fiscal year for which any such appropriation is made. If for any
fiscal year commencing on or after April first, nineteen hundred
eighty-three, the governor fails to submit a budget bill containing an
appropriation in the amount requested by the superintendent or the
legislature fails to appropriate the amount in a budget bill submitted
by the governor for such fiscal year, the amount appropriated for and
encumbered during the preceding fiscal year shall be payable forthwith
to the fund on July first of such year in the manner prescribed by law,
provided, however, that such amount shall not exceed the amount of
moneys transferred to the general fund from the fund pursuant to the
provisions of chapter fifty-five of the laws of nineteen hundred
eighty-two.

(B) Any appropriation made to the fund pursuant to this section shall
be included as an asset for the purposes of computing the value or net
value of the fund pursuant to this section.

(C) Any transfer of moneys from the fund to the general fund in
accordance with the provisions of chapter fifty-five of the laws of
nineteen hundred eighty-two is deemed a proper and prudent legal
undertaking for any state officer with the responsibility for the
custody or the investment of the assets of the fund, notwithstanding any
other provision of law to the contrary.

(2) Upon certification by the superintendent that further sums, not
exceeding fifty million dollars in the aggregate, are required by the
public motor vehicle liability security fund to meet its obligations and
accomplish the purposes of this article the commissioner shall transfer
from the assets of the property/casualty insurance security fund to the
public motor vehicle liability security fund amounts to be specified by
the superintendent. Such sums, not exceeding fifty million dollars in
the aggregate, shall be a liability of the public motor vehicle
liability security fund and shall be repaid to the property/casualty
insurance security fund pursuant to a plan of repayment to be prescribed
by the superintendent which may provide for an increase in the level of
payments into the fund provided for in subsection (b) of section seven
thousand six hundred four of this article.