Relates to the regulation of health maintenance organizations

The purpose of this bill is to: (1) apply the risk-based capital ("RBC") requirements to organizations organized pursuant to Insurance Law Article 43 ("Article 43 corporations") and certain health maintenance organizations ("HMOs") (Part A); (2) amend the Insurance Law in order to extend several important provisions of the law that promote the stability of the property/casualty insurance market (Part B); (3) amend the Banking Law to extend provisions permitting a state chartered banking institution to directly exercise any federally permitted power of its federally chartered counterpart and to amend the Insurance Law to extend provisions that exempt a person from having to be licensed as an insurance agent or broker when such a person makes a referral to a licensed insurance agent or broker provided that there is no discussion of specific policy terms or conditions and there is no compensation paid for the referral (Part C); and (4) extend by five years the 2009 legislation that: (a) requires a lender, an assignee, or a mortgage loan servicer, with regard to all home loans, to send a notice to borrowers at least 90 days before commencing legal action against the borrower; and (b) extends mandatory settlement conferences to all borrowers, not just borrowers of "high-cost," "subprime," and "non-traditional" home loans (Part D).

Part A:

Summary of Provisions:

Section 1 of the bill would amend Insurance Law § 1109(a) to apply Insurance Law § 1322 to HMOs that are domiciled in New York and certified or operating in at least one other state (a "domestic multi-state HMO").

Section 2 would amend the title of Insurance Law § 1322 to include Article 43 corporations and domestic multi-state HMOs.

Section 3 would amend Insurance Law § 1322(a)(3) to include within the definition of "domestic insurer" an Article 43 corporation and domestic multi-state HMO.

Section 4 would amend Insurance Law § 1322(b) to state that § 1322 applies to Article 43 corporations and domestic multi-state HMOs.

Section 4 also would amend Insurance Law § 1322(c)(1) to require a domestic multi-state HMO to submit an RBC report to the Superintendent of Financial Services on or prior to each April 15.

Section 5 would amend Insurance Law § 1322(c)(2)(D) to correct a typographical error.

Section 6 would amend Insurance Law § 1322(d)(1) to increase the RBC trend test trigger from 2.5 times the authorized control level RBC to

3.0 times. Section 6 also would amend Insurance Law § 1322(d)(1) to make grammatical changes.

Section 7 would amend Insurance Law § 1322 to make grammatical changes.

Section 8 would provide for an immediate effective date.

Existing Law:

HMOs and Article 43 corporations currently are not subject to the RBC requirements set forth in Insurance Law § 1322. In addition, the RBC trend test trigger currently set forth in Insurance Law § 1322 is 2.5 times the authorized control level RBC.

Legislative History:

This is a new bill.

Statement in Support:

This part would amend the Insurance Law to conform to the National Association of Insurance Commissioners' ("NAIC's") RBC for Health Organizations Model Act. Specifically, this bill would make domestic multi-state HMOs and Article 43 corporations subject to the RBC requirements set forth in Insurance Law § 1322. The bill also would increase the RBC trend test trigger from 2.5 times the authorized control level RBC to 3.0 times. Effective January 1, 2015, the NAIC's RBC for Health Organizations Model Act will become an accreditation standard and conformance therewith will be necessary for the Department of Financial Services ("Department") to maintain its accreditation status with the NAIC.

Budget Implications:

None.

Local impact:

None.

Effective Date:

This bill would take effect immediately.

Part B:

Summary of Provisions:

Section 1 of the bill would extend sections 2328 and 2329 of the Insurance Law dealing with commercial motor vehicle insurance rates to June 30, 2019.

Sections 2 and 3 would extend for five years provisions of section 3425 of the Insurance Law dealing with non-renewal requirements for automobile insurance.

Section 4 would extend the expiration of subsection (a) of section 2305 of the insurance law relating to prior approval of certain insurance rates to June 30, 2019.

Section 5 would extend section 2342 of the Insurance. Law which extends the expiration of sections 2307(c), 2308, 2310(a), 2316, 2320, 2323, 2326, 2335, and 2336(b) to June 30, 2019.

Section 6 would extend subsection (h) of section 2344 of the Insurance Law dealing with flexible rate limitations in problem markets to June 30, 2019.

Section 7 provides for an immediate effective date.

Existing Law:

The existing provisions of the Insurance Law that are the subject of this part will expire June 30, 2014.

Legislative History:

This is a new bill. These provisions were previously extended for a three year period by Chapter 102 of the Laws of 2011.

Statement in Support:

Many of the provisions of this part are important consumer protections that have been in place for years regarding rate regulation in certain areas of insurance. Several provisions of the bill also enable insurers to continue making certain types of insurance readily available in New York.

Extending the sunset dates for -the Article 23 provisions assures the insurance industry that the file-and-use and flexible rating provisions will remain in effect. These file-and-use and flexible rating approaches enable insurers to respond to changing market conditions in a more expedited manner than the prior approval approach, to which the law would revert back if these key provisions of Article 23 are permitted to sunset.

Insurance Law § 3425 provides an equitable balance among the often competing forces of policyholders' expectations, insurers' legitimate prerogatives in evaluating and assuming risk, and the realities of the private passenger automobile insurance marketplace. It provides the foundation for a reliable automobile insurance market that promotes stability and protects consumers against arbitrary cancellation or nonrenewal of coverage. The 2% rule is also an essential component of ongoing efforts to depopulate the New York Automobile Insurance Plan ("NYAIP").

Budget Implications:

None.

Local impact:

None.

Effective Date:

This bill would take effect immediately.

Part C:

Summary of Provisions:

Section 1 of the bill would amend section 6 of Chapter 322 of the Laws of 2007 to extend the expiration date from September 10, 2014 to September 10, 2017.

Section 2 would amend section 7 of Chapter 3 of the Laws of 1997 to extend the expiration from September 10, 2014 to September 10, 2017.

Section 3 provides for an immediate effective date.

Existing Law:

Section 6 of Chapter 322 of the Laws of 2007 is set to expire September 10, 2014.

Section 7 of Chapter 3 of the Laws of 1997 is set to expire September 10, 2014.

Legislative History:

This is a new bill. These provisions were previously. extended for a three year period by sections 95 and 95-a of Part A of Chapter 62 of the Laws of 2011.

Statement in Support:

The New York Banking "wild card" statute that is due to expire enhances the value of the New York State bank charters. The Insurance Law provisions that are extended by this part ensure consistency with the federal Gramm-Leach Bliley Act. These Banking and Insurance Law provisions operate to the benefit of the financial services markets in New York.

Budget Implications:

None.

Local Impact:

None.

Effective Date:

This bill would take effect immediately.

Part D:

Summary of Provisions:

Section 1 would extend by five years subdivisions a and e of Chapter 507 of the Laws of 2009, amending the Real Property Actions and Proceedings Law (RPAPL), and the CPLR. These provisions now set to expire on, respectively, January 14, 2015 and February 13, 2015.

Section 2 contains a severability clause.

Section 3 provides for an immediate effective date.

Existing Law:

The amendments made to Sections 1304(1), (2) and (5) of RPAPL by Chapter 507 of the Laws of 2009 are set to expire on January 14, 2015.

The amendments made to CPLR Rule 3408(a) by Chapter 507 of the Laws of 2009 are set to expire on February 13, 2015.

Legislative History:

This is a new bill.

Statement in Support:

Years after the height of the financial crisis, homeowners nationwide are still reeling in the aftermath of the housing fallout as thousands continue down the path toward foreclosure. In many cases, this path has proven to be riddled with systemic deficiencies, characterized by inefficient and ineffective use of homeowner, bank, and judicial resources, and widespread delays in the foreclosure process. Far from being immune to these problems, New York State is reported to have the longest foreclosure timeline in the nation, averaging more than 1,000 days from the filing of the foreclosure action to bank repossession.

This part would extend by five years the 2009 legislation that: (a) requires a lender, an assignee, or a mortgage loan servicer, with regard to all home loans, to send a notice to borrowers at least 90 days before commencing legal action against the borrower; and (b) extends mandatory settlement conferences to all borrowers, not just borrowers of "high-cost," "subprime," and "non-traditional" home loans.

Budget Implications:

None.

Local Impact:

This bill would reduce the number of vacant and abandoned homes that are in the foreclosure process, which will reduce the financial burden on local governments to maintain these abandoned properties.

Effective Date:

This bill would take effect immediately.