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Sponsors
No co-sponsors yet.
History
- Signed chap.1
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading rules cal.1
- Substituted for A9107
- Referred to insurance
- Delivered to assembly
- Passed senateVote 62–0
- Ordered to third reading cal.86
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Relates to the distribution of dividends by domestic stock life insurers
Assembly Floor Calendar · Sponsor Anthony Brindisi
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to the distribution of dividends by domestic stock life insurers
Purpose
To amend and make technical changes to Chapter 586 of the laws of 2015 relating to the distribution of dividends by domestic life insurers
Summary of provisions
Section 1. Amends subsection (a) of Section 4207 of the insurance law by adding a new paragraph (1) defining the term "earned surplus" to mean an amount equal to an insurer's positive unassigned funds, excluding eighty-five percent of the change in net unrealized capital gains or losses less capital gains tax, for the immediately preceding calendar year as set forth in the insurer's most recent annual statutory financial statement filed with the superintendent of financial service pursuant to section 307 of the insurance law.
Read the full memo (656 words)
Paragraph (2) is amended to reflect the change in numbering. It is further amended to allow any domestic stock life insurer to distribute a dividend to its shareholders out of earned surplus the aggregate amount of such insurer's dividends in any calendar year must not exceed the "greater of either: 10% of surplus to policyholders, as of the immediately preceding calendar year, or; its net gain from operations for the immediately preceding calendar year, excluding realized capital gains, not to exceed 30% of its surplus funds.
Paragraph 3 is amended to reflect the numbering change and new language is added stating that any domestic stock life insurance company may distribute a dividend to its shareholders where the aggregate amount of such dividends in any calendar year does not exceed lesser of either 10% of surplus to policyholders or net gain from operations.
Paragraph 4 is added stating that an insurer shall not distribute a dividend pursuant to both paragraph 2 and 3 of this subsection. Paragraphs 5, 6, and 7 is amended to reflect the number change and make technical changes.
Paragraph 8 is added stating that the superintendent may limit or disallow distribution of dividend distributed pursuant to paragraph 2 if it is determined that the domestic stock life insurance company's surplus to policyholders is not reasonable in relation to the company's outstanding liabilities and not adequate to meet its financial needs; or if the company is financially distressed or troubled.
Justification
The bill amends Chapter 586 of the Laws of 2015. It includes a newly defined qualifying term of "earned income" which is necessary for a domestic stock life insurance company to realize before it can avail itself of the "greater than" threshold standard for dividend distribution. If a company realizes earned income then it may distribute dividends not to exceed the "greater of either: 10% of surplus to policyholders, as of the immediately preceding calendar year, or; its net gain from operations for the immediately preceding calendar year, excluding realized capital gains, not to exceed 30% of its surplus funds.
Where a company fails to meet the earned income qualifier, then it may only distribute dividends where the aggregate amount of such dividends in any calendar year does not exceed lesser of either 10% of surplus to policyholders or net gain from operations. This "lesser of threshold was the previous law.
This change will allow New York stock life insurers to be regulated and reviewed by credit rating organizations on the matter of shareholder distributions in the same manner as their competitors in other states. Furthermore, this bill will allow New York to remain consistence with the National Association of Insurance Commissioners (NAIC) Insurance Holding Company System Regulatory Act and maintain accreditation.
Legislative history
New bill.
Fiscal implications
None
Effective date
This act shall take effect on the same date and in the same manner as a chapter of the laws of 2015 amending the insurance law relating to the distribution of dividends by domestic stock life insurers, as proposed in legislative bills numbers S.1380-B and A.5202-B takes effect.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.