Authorizes foreign insurance companies to transfer their corporate domicile to New York

5 Co-sponsors

• Eric Adams
• Ruben Diaz
• Craig M. Johnson
• Kevin S. Parker
• William T. Stachowski

Title of bill

An act to amend the insurance law, in relation to permitting foreign insurance companies to transfer their corporate domicile to New York

Purpose or general idea of bill

This bill would expand the scope of the existing insurer redomestication law (Section 7120 of the Insurance Law) to apply to non-life insurance companies domiciled in another state, but authorized to do insurance business in New York. Currently, the redomestication law applies only to foreign life insurance companies. Under the bill, a foreign non-life insurance company that is authorized in New York would have the ability to change its domicile to New York, with the approval of the New York Superintendent of insurance and the ranking insurance official of the foreign non-life insurer's current state of domicile.

Summary of provisions

Section 1 of the bill amends Section 7120 of the New York Insurance Law to expand the scope of the existing redomestication law to allow any foreign insurance company authorized to do business in the State of New York to transfer its domicile to New York. The bill accomplishes this by deleting the word "life" and "life insurance" in the appropriate places throughout Section 7120 of the Insurance Law. In addition, Section 1 of the bill makes certain changes to Section 7120 to use the Article 71 defined term "company" instead of "insurer" in a number of places. Section 1 of the bill also clarifies that different types of insurers, not only stock and mutual insurers, may redomesticate to New York under Section 7120.

Section 2 of the bill establishes an immediate effective date.

Justification

New York's strength in insurance regulatory matters makes it an attractive state for all insurers, including non-life insurers, to be be domiciled. This bill sends a positive message to all types of foreign insurers that New York is an attractive state in which to do business.

Currently, the process for a New York non-life insurance company to redomesticate to New York is extremely difficult. It requires a foreign insurer to reincorporate in New York and merge the existing insurer into the newly incorporated New York insurer. This process is very time-consuming and, in many states, requires the recently merged New York insurer to obtain new licenses, agent appointments, and rate and policy form approvals. Such procedures necessitate an overly burdensome and expensive regulatory process that does not benefit the State of New York.

In these difficult economic times, it is critical that measures be taken by the Legislature to support economic development in New York. This bill does that by expanding the types of insurers that may redomesticate to New York through a streamlined and more efficient process. Eliminating non-functional impediments to the redomestication process will have a catalytic impact in encouraging all types of insurers to move to New York, thereby elevating the potential for the State to add new jobs and garner enhanced revenues. Further, the bill will serve as yet another tool to maintain New York's position as the worldwide center for the financial services

industry, and reaffirm the State's role as one of the leading regulators for the insurance industry.

Prior legislative history

None.

Fiscal implications

No known costs to the State are associated with this bill.

Effective date

This act shall take effect immediately upon being signed into law.