Relates to the redomestication of insurance companies

BILL NUMBER:S3366

Title of bill

An act to amend the insurance law, in relation to the redomestication of insurance companies

Purpose

To provide for the more efficient regulation of insurance entities by more closely conforming New York law governing the redomestication of insurance companies to the National Association of Insurance Commissioners (NAIC) Redomestication Model Act

Summary of provisions

This bill would amend §7120 to the Insurance Law by adding a new subsection (c) and subsection (h) to more closely conform New York law governing the redomestication of insurance companies to the NARC Redomestication Model Bill. Specifically, this bill would include provisions governing the redomestication of a domestic insurance company to another state upon the approval of the Superintendent of Insurance. Upon approval of redomestication by the Superintendent, the transferring company would be authorized to transact business in New York State as a foreign company, provided that the insurer meets all of the requirements for operation as a foreign company. Such company could continue to utilize policy forms previously approved by the Superintendent for their use as a domestic insurer, with the proper endorsements.

Existing law

Currently, §7120 only contains the provisions of the NAIC Model relating to the transfer to this state of the corporate domicile of an authorized foreign company.

Justification

This bill will improve the efficiency of the regulation and oversight of affiliated groups of insurance companies domiciled in multiple states and will help to preserve the continuation of state regulation of insurance. Forty-one states have adopted a version of the NAIC Redomestication Model Act, which provides for a redomestication process which is efficient, effective and not unduly cumbersome. New York State has not adopted the provisions of the Model Act relating to the transfer of a domestic insurer to another state and, thus, under current New York law, the process for consolidating affiliates is a very difficult, time consuming and cumbersome one By adopting the balance of the NAIC Redomestication Model Bill, this legislation will also further uniformity among states relative to the regulation of insurance companies and would make the current state-based system for the regulation of insurance companies more efficient As the threat of the federal regulation of the insurance industry continues to loom, it is

important that states demonstrate their ability to work together and adopt uniform laws where such laws would provide for the more effective regulation of insurance companies, The enactment of this legislation would further this goal.

Legislative history

New bill.

Fiscal implications

None.

Effective date

Immediately.