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A10229 Summary:

BILL NOA10229
 
SAME ASSAME AS S09344
 
SPONSORRules (Niou)
 
COSPNSR
 
MLTSPNSR
 
Amd Ins L, generally
 
Makes technical corrections to law references in the insurance law; eliminates certain gender-specific language relating to the superintendent of insurance.
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A10229 Actions:

BILL NOA10229
 
05/10/2022referred to insurance
05/11/2022reported referred to rules
05/17/2022reported
05/17/2022rules report cal.279
05/17/2022ordered to third reading rules cal.279
05/17/2022passed assembly
05/17/2022delivered to senate
05/17/2022REFERRED TO INSURANCE
05/24/2022SUBSTITUTED FOR S9344
05/24/20223RD READING CAL.1485
05/24/2022PASSED SENATE
05/24/2022RETURNED TO ASSEMBLY
07/11/2022delivered to governor
07/21/2022signed chap.435
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A10229 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10229
 
SPONSOR: Rules (Niou)
  TITLE OF BILL: An act to amend the insurance law, in relation to making technical corrections to law references and eliminates certain gender-specific language relating to the superintendent of insurance   PURPOSE OR GENERAL IDEA OF BILL:: This bill would make technical changes to the Insurance Law related to fixing references to the Financial Services Law and out-of-date language related to the Superintendent which were not addressed during the 2011 consolidation of the former State Insurance and Banking Departments into the Department of Financial Services.   SUMMARY OF PROVISIONS:: Section One of the bill amends § 314(b)(3) of the Insurance Law to update references to the Financial Services Law. Section Two of the bill amends § 1218(c)(1) of the. Insurance Law to eliminate unnecessary gender-based language, instead inserting "the superintendent" in all instances where such superintendent is merely referred to as "he." This section also updates references to the Finan- cial Services Law. Section Three of the bill amends § 2108(h)(2) of the Insurance Law to update references to the Financial Services Law. Section Four of the bill amends § 2110(f)(3) of the Insurance Law to update references to the Financial Services Law. Section Five of the bill amends § 2405 of the Insurance Law to correct grammatical errors, eliminate unnecessary gender-based language, instead inserting "the superintendent" in all instances where such superinten- dent is merely referred to as "he," and update references to the Finan- cial Services Law. Section Six of the bill amends § 4308(e) of the Insurance Law to correct grammatical errors and update references to the Financial Services Law. Section Seven of the bill amends § 4315(b)of the Insurance Law to make technical language changes and update references to the Financial Services Law. Section Eight of the bill amends § 4521 of the Insurance Law to correct grammatical errors, eliminate unnecessary gender-based language, instead inserting "the superintendent" in all instances where such superinten- dent is merely referred to as "he," and update references to the Finan- cial Services Law. Section Nine of the bill amends § 4523(a) of the Insurance Law to correct grammatical errors and update references to the Financial Services Law. Section Ten of the bill amends § 4711(b) of the Insurance Law to update references to the Financial Services Law. Section Eleven of the bill amends § 5409 of the Insurance Law to update references to the Financial Services Law. Section Twelve of the bill amends § 5603(a) of the Insurance Law to correct grammatical errors and update references to the Financial Services Law. Section Thirteen of the bill amends § 6707(a) of the Insurance Law to update references to the Financial Services Law. Section Fourteen of the bill amends § 7001(b) of the Insurance Law to update references to the Financial Services Law. Section Fifteen of the bill amends § 7003(c)(4) of the Insurance Law to update references to the Financial Services Law. Section Sixteen of the bill amends § 7007 of the Insurance Law to update references to the Financial Services Law. Section Seventeen of the bill amends § 7312(x) of the Insurance Law to update references to the Financial Services Law. Section Eighteen of the bill amends § 7910(b)(1)(C) of the Insurance Law to update references to the Financial Services Law. Section Nineteen of the bill amends § 9109(b)(1) of the Insurance Law to update references to the Financial Services Law. Section Twenty provides for an immediate effective date.   JUSTIFICATION:: This legislation is required to update the Insurance Law in relation to outdated references and verbiage that went unaddressed in the 2011 legislation which authorized the consolidation of the State Insurance and Banking Departments into the Department of Financial Services. This amending language updates technical references to the Financial Services Law as well as removes unnecessary gender-based language related to the Superintendent. These changes will have no impact on the insurance industry nor consumers alike as they are merely technical amendments to clean-up and update the insurance statute.   PRIOR LEGISLATIVE HISTORY:: New Bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:: None noted.   EFFECTIVE DATE:: Immediately.
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A10229 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          10229
 
                   IN ASSEMBLY
 
                                      May 10, 2022
                                       ___________
 
        Introduced  by  COMMITTEE  ON  RULES -- (at request of M. of A. Niou) --
          read once and referred to the Committee on Insurance
 
        AN ACT to amend the insurance  law,  in  relation  to  making  technical
          corrections  to  law references and eliminates certain gender-specific
          language relating to the superintendent of insurance
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Paragraph 3 of subsection (b) of section 314 of the insur-
     2  ance law is amended to read as follows:
     3    (3) to make an examination into the affairs of every system, including
     4  compliance with the standards  established  pursuant  to  paragraph  two
     5  [hereof]  of  this section, at least once in every five years in accord-
     6  ance with the provisions of sections three hundred  ten,  three  hundred
     7  eleven  and  three  hundred  twelve  of  this article and to recover the
     8  expenses of such examination from such system  in  accordance  with  the
     9  provisions  of  subsection  (f)  of section [three hundred thirteen] two
    10  hundred six of [this article] the financial services law.    A  copy  of
    11  each  report  on  examination  as  filed  for public inspection shall be
    12  forwarded to the governor, state comptroller and legislature and, in the
    13  case of systems of the city of New York, to the mayor, city  comptroller
    14  and president of the city council.
    15    §  2.  Paragraph  1 of subsection (c) of section 1218 of the insurance
    16  law is amended to read as follows:
    17    (1)  Whenever  the  superintendent  believes  this  section  is  being
    18  violated, [he] the superintendent shall serve upon the insurer or insur-
    19  ers and the director or directors, as the case may be, a notice pursuant
    20  to  section  three  hundred [three] four of [this chapter] the financial
    21  services law of a hearing before the superintendent to be held not  less
    22  than thirty days after such service and requiring such insurer or insur-
    23  ers  and  such  director or directors, as the case may be, to show cause
    24  why an order should not be made by  the  superintendent  directing  such
    25  insurer  or insurers and such director or directors, as the case may be,
    26  to cease and desist from such violation.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15787-02-2

        A. 10229                            2
 
     1    § 3. Paragraph 2 of subsection (h) of section 2108  of  the  insurance
     2  law,  as  amended by chapter 257 of the laws of 1995, is amended to read
     3  as follows:
     4    (2)  Notwithstanding the requirement of subsection (f) of this section
     5  that each individual applicant for an independent adjuster's license  or
     6  sub-license  shall take and pass a personal written examination in order
     7  to satisfy the superintendent as to trustworthiness and competency,  the
     8  superintendent may in the superintendent's discretion, if satisfied that
     9  the  person applying for such temporary permit has in all other respects
    10  met the requirements of this section with respect to  the  licensing  of
    11  independent  adjusters  and  is  qualified by training and experience to
    12  adjust claims as an employee of a licensed independent adjuster, author-
    13  ized insurer, or any adjustment bureau or association  owned  and  main-
    14  tained  by  insurers  to adjust or investigate motor vehicle body damage
    15  losses, issue such temporary permit to be effective for such  period  of
    16  time  as  the superintendent may specify therein but, in no event, for a
    17  period in excess of one hundred  twenty  days.  The  superintendent  may
    18  summarily suspend or revoke any temporary permit issued pursuant to this
    19  subsection  upon  ten [days] days' notice in writing to the permittee of
    20  the superintendent's intention to do so, which notice shall be given  in
    21  accordance  with the applicable provisions of subsections (a) and (d) of
    22  section three hundred [three]  four  of  [this  chapter]  the  financial
    23  services law.
    24    §  4.  Paragraph  3 of subsection (f) of section 2110 of the insurance
    25  law, as amended by chapter 687 of the laws of 2003, is amended  to  read
    26  as follows:
    27    (3) Before revoking the license of any non-resident insurance producer
    28  in accordance with this section, the superintendent shall give ten days'
    29  notice  in  writing to such producer of the action proposed to be taken,
    30  which notice shall be given in accordance with the applicable provisions
    31  of subsections (a) and (d) of section  three  hundred  [three]  four  of
    32  [this chapter] the financial services law.
    33    § 5. Section 2405 of the insurance law is amended to read as follows:
    34    §  2405.  Hearings  and  reports  on defined violations and determined
    35  violations. (a) Whenever the superintendent has reason to believe that a
    36  person has committed or is committing a defined violation  or  has  been
    37  engaged  in  or  is engaging in any method of competition, or any act or
    38  practice, [which]  could  become  a  determined  violation  and  that  a
    39  proceeding  thereon  would  be  in  the interest of the public, [he] the
    40  superintendent shall serve upon the person in  the  manner  provided  by
    41  section  three  hundred  [three]  four  of  [this chapter] the financial
    42  services law, a statement of the charges and notice of a hearing  to  be
    43  held  at  a time not less than ten days after the date of service of the
    44  notice and at the place fixed in the notice.
    45    (b) The person shall have an opportunity at the hearing  to  be  heard
    46  personally  or  by  counsel, and, in the case of a defined violation, to
    47  show cause why an order should not be made by the superintendent requir-
    48  ing the person to cease and desist from the charged  defined  violation.
    49  Upon  good cause shown, the superintendent shall permit anyone to inter-
    50  vene, appear and be heard at the hearing personally or by counsel.
    51    (c) After the hearing, the superintendent shall make a written  report
    52  containing  [his]  the superintendent's findings, and shall serve a copy
    53  of the report upon the person and any intervenor.
    54    § 6. Subsection (e) of section 4308 of the insurance law,  as  amended
    55  by chapter 107 of the laws of 2010, is amended to read as follows:

        A. 10229                            3
 
     1    (e)  Notwithstanding  any  other  provision of law, the superintendent
     2  shall have the power to require  independent  management  and  financial
     3  audits of corporations subject to the provisions of this article whenev-
     4  er  in  the judgment of the superintendent, losses sustained by a corpo-
     5  ration jeopardize its ability to provide meaningful coverage at afforda-
     6  ble rates or when such audit would be necessary to protect the interests
     7  of  subscribers.  The  audit  shall  include,  but not be limited to, an
     8  investigation of the corporation's provision of benefits to senior citi-
     9  zens,  individual  and  family,  and  small  group  and  small  business
    10  subscribers  in  relation  to  the needs of those subscribers. The audit
    11  shall also include an evaluation of the efficiency of the  corporation's
    12  management,  particularly with respect to lines of business [which] that
    13  are experiencing losses. In  every  case  in  which  the  superintendent
    14  chooses  to require an audit provided for in this subsection, the super-
    15  intendent shall have the authority to  select  the  auditor.  Any  costs
    16  incurred  as  a  result  of  the  operation  of this subsection shall be
    17  assessed on all domestic insurers in the same manner as provided for  in
    18  section  [three]  two  hundred  [thirty-two]  six  of [this chapter] the
    19  financial services law.
    20    § 7. Subsection (b) of section 4315 of the insurance law is amended to
    21  read as follows:
    22    (b) Except as provided in subsection (a) [hereof] of this section, all
    23  orders of the superintendent and all final orders or  decisions  of  the
    24  commissioner  of  health made under the provisions of this article shall
    25  be subject to judicial review  as  provided  in  section  three  hundred
    26  [twenty-six] eight of [this chapter] the financial services law.
    27    § 8. Section 4521 of the insurance law is amended to read as follows:
    28    §  4521.  Grounds  for revocation or suspension of license. The super-
    29  intendent may revoke or suspend the license to do business in this state
    30  of any domestic, foreign or alien society, if, after notice to and hear-
    31  ing of such society in accordance with sections  three  hundred  [three]
    32  four,  three  hundred  [four] five and three hundred [five] six of [this
    33  chapter] the financial services law, [he] the superintendent  finds  any
    34  one or more of the following grounds therefor:
    35    (a)  that  such  society  has exceeded its powers under its charter or
    36  under its license to do business;
    37    (b) that such society has failed to comply  with  any  requirement  of
    38  this chapter applicable thereto;
    39    (c)  that  such  society  is conducting its insurance business fraudu-
    40  lently or in a way hazardous  to  its  members,  its  creditors  or  the
    41  public;
    42    (d) that such society is not carrying out its contracts in good faith;
    43  and
    44    (e) in the case of a foreign or alien society, that the society is not
    45  conforming  in  substance to all of the requirements imposed on domestic
    46  societies, and in such a case, the revocation may be in addition to,  or
    47  in  lieu  of, a proceeding under article seventy-four of this chapter in
    48  the circumstances specified in section four thousand five hundred  nine-
    49  teen of this article.
    50    § 8. Section 4521 of the insurance law is amended to read as follows:
    51    §  4521.  Grounds  for revocation or suspension of license. The super-
    52  intendent may revoke or suspend the license to do business in this state
    53  of any domestic, foreign or alien society, if, after notice to and hear-
    54  ing of such society in accordance with sections  three  hundred  [three]
    55  four,  three  hundred  [four] five and three hundred [five] six of [this

        A. 10229                            4

     1  chapter] the financial services law, [he] the superintendent  finds  any
     2  one or more of the following grounds therefor:
     3    (a)  that  such  society  has exceeded its powers under its charter or
     4  under its license to do business;
     5    (b) that such society has failed to comply  with  any  requirement  of
     6  this chapter applicable thereto;
     7    (c)  that  such  society  is conducting its insurance business fraudu-
     8  lently or in a way hazardous  to  its  members,  its  creditors  or  the
     9  public;
    10    (d) that such society is not carrying out its contracts in good faith;
    11  and
    12    (e) in the case of a foreign or alien society, that the society is not
    13  conforming  in  substance to all of the requirements imposed on domestic
    14  societies, and in such a case, the revocation may be in addition to,  or
    15  in  lieu  of, a proceeding under article seventy-four of this chapter in
    16  the circumstances specified in section four thousand five hundred  nine-
    17  teen of this article.
    18    § 9. Subsection (a) of section 4523 of the insurance law is amended to
    19  read as follows:
    20    (a)  Any  person,  firm, association or corporation who or which shall
    21  solicit a member or members for, or in any way  assist  in  procuring  a
    22  member  or members for, or collect payments or dues for or in connection
    23  with the membership of, any fraternal benefit society  [which]  that  is
    24  not  licensed  to  do  business  in  this  state and [which] that is not
    25  exempted under the provisions of  section  four  thousand  five  hundred
    26  twenty-two  of  this  article  shall  be guilty of a misdemeanor, and in
    27  addition, such person, firm, association or corporation shall be  liable
    28  to  a  penalty of one hundred dollars for each person so solicited or so
    29  procured to become a member in such unauthorized  society,  and  may  in
    30  addition  to  either  of  the foregoing, be enjoined from doing any such
    31  unlawful acts, in the manner specified in section three  hundred  [twen-
    32  ty-seven] nine of [this chapter] the financial services law.
    33    § 10. Subsection (b) of section 4711 of the insurance law, as added by
    34  chapter 689 of the laws of 1994, is amended to read as follows:
    35    (b) In connection with such examinations, the superintendent may exer-
    36  cise the powers set forth in sections [three hundred four, three hundred
    37  five,]  three hundred six, three hundred eight, three hundred ten, three
    38  hundred eleven, and three hundred twelve[, and three  hundred  thirteen]
    39  of  this  chapter  and  subsection  (f)  of  section two hundred six and
    40  sections three hundred five and  three  hundred  six  of  the  financial
    41  services  law,  and  may  also  require special reports from a municipal
    42  cooperative health benefit plan as specified in  section  three  hundred
    43  eight of this chapter.
    44    § 11. Section 5409 of the insurance law is amended to read as follows:
    45    § 5409. Examinations. The superintendent may, in accordance with arti-
    46  cle  three  of this chapter, make an examination into the affairs of the
    47  association whenever [he] the superintendent  deems  it  expedient.  The
    48  expenses  of every such examination shall be borne and paid by the asso-
    49  ciation in the manner prescribed by subsection (f)  of  section  [three]
    50  two hundred [thirteen] six of [this chapter] the financial services law.
    51    § 12. Subsection (a) of section 5603 of the insurance law, as added by
    52  chapter 266 of the laws of 1986, is amended to read as follows:
    53    (a) There is established within the department an arbitration adminis-
    54  tration  fund  which shall be considered to be an expense of the depart-
    55  ment and shall be funded by order of  the  superintendent,  pursuant  to
    56  section  [three]  two  hundred  [thirty-two]  six  of [this chapter] the

        A. 10229                            5
 
     1  financial services law in such amount as shall be sufficient  to  defray
     2  the actual administrative expenses of the department and the arbitration
     3  administrator  for the projected number of arbitration proceedings for a
     4  [twelve  month] twelve-month period, after taking into consideration any
     5  excessive or insufficient amounts from  the  previous  assessments,  any
     6  appropriation  of  public funds for this purpose and any funds collected
     7  from claimants participating in the arbitration. If the amount  assessed
     8  for  any  [twelve  month]  twelve-month period is insufficient to defray
     9  expenses during that period, a further assessment may be ordered by  the
    10  superintendent. The arbitration administrator shall establish reasonable
    11  fees  for  claimants  who participate in the arbitration, subject to the
    12  approval of the superintendent.
    13    § 13. Subsection (a) of section 6707 of the insurance law, as added by
    14  chapter 598 of the laws of 2000, is amended to read as follows:
    15    (a) Every nonprofit property/casualty insurance company subject to the
    16  provisions of this article shall be exempt from any fees, taxes, special
    17  ad valorem levies or assessments of any kind, including, but not limited
    18  to, franchise taxes, sales taxes or other taxes, upon or with respect to
    19  any property owned by it or under its jurisdiction,  control  or  super-
    20  vision,  or upon the uses thereof, or upon or with respect to its activ-
    21  ities or operations in furtherance of the powers conferred  upon  it  by
    22  this  article,  or  upon or with respect to any revenues or other income
    23  received by the nonprofit property/casualty  insurance  company,  except
    24  that every nonprofit property/casualty insurance company licensed pursu-
    25  ant  to  this  article  shall be subject to the assessment upon domestic
    26  insurers under section [three] two hundred  [thirty-two]  six  of  [this
    27  chapter]  the  financial  services  law,  the assessments upon insurance
    28  carriers under sections one hundred fifty-one and  two  hundred  twenty-
    29  eight  of the workers' compensation law and all special fund assessments
    30  upon insurance carriers under the workers' compensation law.
    31    § 14. Subsection (b) of section 7001 of the insurance law, as added by
    32  section 146 of part A of chapter 389 of the laws of 1997, is amended  to
    33  read as follows:
    34    (b)  In  addition  to  the provisions of this article and this chapter
    35  specifically referred to in this article, the  following  provisions  of
    36  this chapter shall apply to captive insurance companies:
    37    (1) article one of this chapter, pertaining to general provisions;
    38    (2)  sections  three  hundred  one,  [three hundred two, three hundred
    39  three, three hundred four, three hundred five,] three hundred six, three
    40  hundred eight, three hundred ten, three hundred  eleven,  three  hundred
    41  twelve[, three hundred thirteen, three hundred twenty-six, three hundred
    42  twenty-seven,]  and  three hundred twenty-nine[, and three hundred thir-
    43  ty-two] of this chapter and sections  two  hundred  six,  three  hundred
    44  three,  three hundred four, three hundred five, three hundred six, three
    45  hundred eight, and three hundred nine of  the  financial  services  law,
    46  pertaining to certain administrative and procedural provisions; and
    47    (3)  article  seventy-four  of  this  chapter, pertaining to rehabili-
    48  tation, liquidation, conservation and dissolution of insurers.
    49    § 15. Paragraph 4 of subsection (c) of section 7003 of  the  insurance
    50  law,  as  added  by  section 146 of part A of chapter 389 of the laws of
    51  1997, is amended to read as follows:
    52    (4) In order to provide for the review of  the  application  submitted
    53  pursuant  to  this subsection in a timely manner, the superintendent may
    54  engage such other qualified persons and services as  may  be  necessary.
    55  Prior  to  retaining  any  such persons and services, the superintendent
    56  shall notify the applicant and provide an estimate of the cost  of  such

        A. 10229                            6
 
     1  services.  The  superintendent  shall  recover  such costs in the manner
     2  prescribed in subsection (f) of section [three] two  hundred  [thirteen]
     3  six of [this chapter] the financial services law.
     4    §  16.  Section  7007 of the insurance law, as added by section 146 of
     5  part A of chapter 389 of the  laws  of  1997,  is  amended  to  read  as
     6  follows:
     7    §  7007.    Examinations.   The superintendent may make an examination
     8  into the affairs of any captive  insurance  company  licensed  to  do  a
     9  captive insurance business in this state whenever it is deemed necessary
    10  for  the protection of the interests of the people of this state but the
    11  superintendent shall conduct at least one examination every five  years.
    12  Such  examinations  shall be conducted in accordance with the provisions
    13  of sections three hundred  ten,  three  hundred  eleven,  three  hundred
    14  twelve  [and  three hundred thirteen] of this chapter and subsection (f)
    15  of section two hundred six of the financial services law.
    16    § 17. Subsection (x) of section 7312 of the insurance law, as added by
    17  chapter 683 of the laws of 1988, is amended to read as follows:
    18    (x) Effect on department personnel. Notwithstanding subsection (a)  of
    19  section  [two]  five  hundred [four] one of [this chapter] the financial
    20  services law, the superintendent, any deputy or other  employee  of  the
    21  department  shall  be  permitted  to  receive  and  exercise  any rights
    22  received as a policyholder in connection with a reorganization.
    23    § 18. Subparagraph (C) of paragraph 1 of  subsection  (b)  of  section
    24  7910  of the insurance law, as added by chapter 614 of the laws of 1997,
    25  is amended to read as follows:
    26    (C) At the hearing, the burden shall be on the superintendent to  show
    27  why  the  order  issued  pursuant  to  this  paragraph is justified. The
    28  provisions of section three hundred [four] five of  [this  chapter]  the
    29  financial  services  law  shall  apply to a hearing requested under this
    30  paragraph.
    31    § 19. Paragraph 1 of subsection (b) of section 9109 of  the  insurance
    32  law is amended to read as follows:
    33    (1)  If  a  company, association or person fails within the prescribed
    34  time to file any report or statement required  by  this  article  or  by
    35  section  two  thousand  one hundred eighteen of this chapter, or to make
    36  any payment due under the provisions of this article or sections  [three
    37  hundred thirteen, three hundred thirty-two,] three hundred thirty-three,
    38  one  thousand  one  hundred  twelve,  two thousand one hundred five, two
    39  thousand one hundred eighteen or four thousand  four  hundred  seven  of
    40  this  chapter  or section two hundred six of the financial services law,
    41  the superintendent may order such company, association or person to  pay
    42  to the people of this state the following penalties:
    43    (A)  not  less than one hundred nor more than five hundred dollars for
    44  each and every failure to file a report or  statement  within  the  time
    45  prescribed;
    46    (B)  five  percent  of the principal amount of any payment due plus an
    47  additional one percent of said sum for the second and subsequent  months
    48  or fractions thereof during which payment has not been made.
    49    § 20. This act shall take effect immediately.
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