§ 7708. Powers and duties of the corporation. In addition to the
powers and duties enumerated in other sections of this article, and
subject to limitations and exclusions contained in this and other
sections of this article:

(a) (1) If a domestic insurer is an impaired or insolvent insurer, the
corporation shall, with the approval of the superintendent:

(A) guarantee, assume, or reinsure, or cause to be guaranteed,
assumed, or reinsured, the covered policies, or arrange for replacement
by policies found by the superintendent to be substantially similar to
such covered policies;

(B) assure payment of the contractual obligations of the impaired or
insolvent insurer; and

(C) provide such moneys, pledges, notes, guarantees or other means as
are reasonably necessary to discharge such duties.

(2) The aggregate liability of the corporation under this subsection
shall not exceed five hundred thousand dollars for all benefits,
including cash values, with respect to any one life or, to the extent
benefits are not allocated pursuant to a covered policy to any one life,
to any one covered policy; provided, however, that (A) the foregoing
limitation shall not apply to any group or blanket accident or health
insurance or accident and health insurance policy; and (B) the
corporation shall be liable under this subsection in an amount not to
exceed one million dollars for all benefits, including cash values, with
respect to any group annuity contract (or portion of any such contract)
that does not guarantee annuity benefits with respect to any specific
individual identified in the contract and with respect to any funding
agreement issued to fund benefits under any employee benefit plan.

(b) (1) If a foreign or alien insurer is an impaired or insolvent
insurer, the corporation shall, with the approval of the superintendent:

(A) guarantee, assume, or reinsure or cause to be guaranteed, assumed,
or reinsured the covered policies, or arrange for replacement by
policies found by the superintendent to be substantially similar to such
covered policies;

(B) assure payment of the contractual obligations of the insolvent
insurer; and

(C) provide such moneys, pledges, notes, guarantees, or other means as
are reasonably necessary to discharge such duties.

(2) The aggregate liability of the corporation under this subsection
shall be the excess over any amount that the superintendent determines
to be the statutory obligation of the guaranty corporation or
association of the foreign or alien insurer's state of domicile or state
of entry, but in no event shall the corporation's liability, when added
to the amount so determined to be available from such other guaranty
corporation or association, exceed five hundred thousand dollars for all
benefits, including cash values, with respect to any one life, or, to
the extent benefits are not allocated pursuant to a covered policy to
any one life, to any one covered policy; provided, however, that the (A)
foregoing five hundred thousand dollar limitation shall not apply to any
group or blanket accident or health insurance or accident and health
insurance policy; and (B) liability of all such guaranty corporations or
associations may in the aggregate equal, but shall not exceed one
million dollars for all benefits, including cash values, with respect to
any group annuity contract (or portion of any such contract) that does
not guarantee annuity benefits with respect to any specific individual
identified in the contract and with respect to any funding agreement
issued to fund benefits under any employee benefit plan.

(c) (1) The superintendent may, with the approval of the court,
suspend cash surrender rights and policy loan rights under any covered
policy for an initial period not to exceed one year and for additional
successive periods, each not to exceed one year, all in addition to any
contractual provision for deferral of cash or policy loan values, upon a
finding that:

(A) The amounts which can be assessed under this article are less than
the amounts needed to assure full and prompt performance of the impaired
or insolvent insurer's contractual obligations, or that the economic or
financial conditions as they affect member insurers are sufficiently
adverse to render the imposition of policy or contract liens to be in
the public interest, or

(B) Such suspension is necessary and proper to effectuate at a
reasonable cost any guarantee, assumption or reinsurance agreement.

(2) The obligations of the corporation under subsection (a) or (b) of
this section, whichever is applicable, with regard to maintaining in
force any policy or contract of group life insurance or group health
insurance shall be limited to one hundred eighty days from the date the
impaired or insolvent insurer was placed under an order of liquidation,
rehabilitation or conservation under article seventy-four of this
chapter, and the corporation shall have no obligation with regard to any
claim incurred pursuant to any such policy or contract beyond one
hundred eighty days from such date, provided (A) that the superintendent
shall have discretion to extend the period of one hundred eighty days up
to three hundred sixty-six days with regard to any policy or contract
when he believes circumstances warrant, and

(B) that the superintendent and the corporation may make such further
extensions of such period as they mutually agree are warranted.

(3) If the superintendent or the corporation shall find that at the
time a covered annuity contract or funding agreement or a class thereof,
other than an annuity contract, funding agreement or class thereof which
funds a compromise or settlement contained in a judgment or order
entered pursuant to the provisions of section twelve hundred seven of
the civil practice law and rules, was issued by the impaired or
insolvent insurer the interest rate guaranteed under such contract or
agreement or class thereof was clearly excessive, the superintendent may
petition the court having jurisdiction in this state, upon appropriate
notice to and opportunity for submission of comments from the
corporation and owners of contracts and agreements proposed to be
affected, to limit the corporation's obligations under this article with
respect to payment of interest to an interest rate which the court finds
would have been appropriate and reasonable at the time the contract or
agreement or class thereof was issued. Nothing in this subsection shall
limit the rights of a holder of a contract or agreement so affected as
against the impaired or insolvent insurer.

(4) Notwithstanding anything to the contrary in this article, under no
circumstances shall the corporation have any obligation on account of an
impaired or insolvent insurer either to, or which inures to the benefit
of, any person or firm which at the time the policy, contract or
agreement was issued or renewed or within ninety days of the date the
insurer was determined to be impaired or insolvent, as the case may be,
directly or indirectly owned ten percent or more of or controlled such
impaired or insolvent insurer; provided, however, that nothing in this
subsection shall relieve the corporation of responsibility with regard
to contractual obligations of such insurer under certificates of
insurance issued to, and inuring solely to the benefit of, the employees
of such person or firm.

(d) If the corporation fails to act within a reasonable period of time
as provided in subsection (a) or (b) of this section, whichever is
applicable, the superintendent shall have the powers and duties of the
corporation under this article with respect to any impaired or insolvent
insurer.

(e) The corporation may render assistance and advice to the
superintendent, upon his request, concerning rehabilitation, payment of
claims, continuance of coverage, or the performance of other contractual
obligations of any impaired or insolvent insurer.

(f) When any person receives benefits under this article, the
corporation shall possess all of the rights under the covered policy
that such person had immediately before such receipt to the extent of
the benefits received because of this article whether the benefits are
payments of contractual obligations or continuation of coverage;
provided, however, that the corporation shall not have any greater
priority against the assets of an impaired or insolvent insurer by
reason of this subsection than is expressly given by section seven
thousand four hundred thirty-five of this chapter. The corporation may
require an assignment to it, or the execution of any other instrument
evidencing the corporation's possession, of such rights by any payee,
policy or contract owner, beneficiary, insured or annuitant. The receipt
of such assignment or other instrument, and its validity and
enforceability by the corporation in accordance with its terms under the
laws of the insurer's state of domicile or state of entry, shall be a
condition precedent to the receipt of any rights or benefits conferred
by this article upon such person.

(g) The contractual obligations of the impaired or insolvent insurer
for which the corporation becomes or may become liable shall be no
greater than the contractual obligations of the impaired or insolvent
insurer would have been in the absence of an impairment or insolvency.

(h) The corporation may:

(1) enter into such contracts as are necessary or proper to carry out
the provisions and purposes of this article;

(2) sue or be sued, including taking any legal actions necessary or
proper for recovery of any unpaid assessments under section seven
thousand seven hundred nine of this article;

(3) borrow money to effect the purposes of this article, provided,
however, that the corporation may agree, as a condition of any
borrowing, that the lender will be subrogated to the rights of the
corporation against the impaired or insolvent insurer to the extent of
the amount borrowed and interest accruing thereon, and provided further
that any note or other evidence of indebtedness of the corporation not
in default shall be a legal investment for domestic insurers and may be
carried as admitted assets;

(4) employ or retain such persons as are necessary or proper to handle
the financial transactions of the corporation, and to perform such other
functions as become necessary or proper under this article;

(5) with the approval of the superintendent, negotiate and contract
with any liquidator, rehabilitator, conservator or ancillary receiver to
carry out the powers and duties of the corporation;

(6) take such legal action as may be necessary to avoid payment of
improper claims;

(7) exercise, for the purposes of this article and to the extent
approved by the superintendent, the powers of a domestic life, health,
or property/casualty insurance company, but in no case may the
corporation issue insurance policies or contracts or annuity contracts
other than those issued to perform the contractual obligations of the
impaired or insolvent insurer;

(8) fund a resolution facility established pursuant to section seven
thousand seven hundred nineteen of this article; and

(9) exercise all powers necessary or convenient for the purposes of
this article.