2012 New York Consolidated Laws
ISC - Insurance
Article 77 - (7701 - 7718) THE LIFE INSURANCE COMPANY GUARANTY CORPORATION OF NEW YORK ACT
7708 - Powers and duties of the corporation.

 
    §  7708.  Powers  and  duties  of  the corporation. In addition to the
  powers and duties enumerated in other  sections  of  this  article,  and
  subject  to  limitations  and  exclusions  contained  in  this and other
  sections of this article:
    (a) If a domestic insurer is an impaired  or  insolvent  insurer,  the
  corporation shall with the approval of the superintendent:
    (1)  guarantee, assume or reinsure, or cause to be guaranteed, assumed
  or  reinsured,  the  covered  policies  of  residents,  or  arrange  for
  replacement  by policies found by the superintendent to be substantially
  similar to such covered policies;
    (2) assure payment of the contractual obligations of the  impaired  or
  insolvent insurer to residents; and
    (3)  provide such moneys, pledges, notes, guarantees or other means as
  are reasonably necessary to discharge such duties.
    The aggregate liability of the corporation under this subsection shall
  not exceed five hundred thousand dollars  for  all  benefits,  including
  cash values, with respect to any one life or, to the extent benefits are
  not  allocated  pursuant to a covered policy to any one life, to any one
  covered policy; provided, however, (i)  that  the  foregoing  limitation
  shall  not apply to any group or blanket accident or health insurance or
  accident and health insurance policy and (ii) that the corporation shall
  be liable under this subsection in an amount not to exceed  one  million
  dollars  for  all  benefits,  including cash values, with respect to any
  group annuity contract (or portion of any such contract) that  does  not
  guarantee  annuity  benefits  with  respect  to  any specific individual
  identified in the contract and with respect  to  any  funding  agreement
  issued to fund benefits under any employee benefit plan.
    (b) If a foreign or alien insurer is an impaired or insolvent insurer,
  the corporation shall with the approval of the superintendent:
    (1)  guarantee,  assume or reinsure or cause to be guaranteed, assumed
  or  reinsured  the  covered  policies  of  residents,  or  arrange   for
  replacement  by policies found by the superintendent to be substantially
  similar to such covered policies;
    (2) assure payment of the contractual  obligations  of  the  insolvent
  insurer to residents; and
    (3)  provide such moneys, pledges, notes, guarantees or other means as
  are reasonably necessary to discharge such duties.
    The aggregate liability of the corporation under this subsection shall
  be the excess over any amount that the superintendent determines  to  be
  the  statutory  obligation of the guaranty corporation or association of
  the foreign or alien insurer's state of domicile or state of entry,  but
  in  no event shall the corporation's liability, when added to the amount
  so determined to be available from such other  guaranty  corporation  or
  association,  exceed  five  hundred  thousand  dollars for all benefits,
  including cash values, with respect to any one life, or, to  the  extent
  benefits are not allocated pursuant to a covered policy to any one life,
  to  any  one  covered  policy; provided, however, (i) that the foregoing
  five hundred thousand dollar limitation shall not apply to any group  or
  blanket  accident  or  health insurance or accident and health insurance
  policy; and (ii) that the liability of all such guaranty corporations or
  associations may in the  aggregate  equal,  but  shall  not  exceed  one
  million dollars for all benefits, including cash values, with respect to
  any  group  annuity contract (or portion of any such contract) that does
  not guarantee annuity benefits with respect to any  specific  individual
  identified  in  the  contract  and with respect to any funding agreement
  issued to fund benefits under any employee benefit plan.
    (c) (1) The superintendent  may,  with  the  approval  of  the  court,
  suspend  cash  surrender rights and policy loan rights under any covered

  policy for an initial period not to exceed one year and  for  additional
  successive  periods, each not to exceed one year, all in addition to any
  contractual provision for deferral of cash or policy loan values, upon a
  finding that:
    (A) The amounts which can be assessed under this article are less than
  the amounts needed to assure full and prompt performance of the impaired
  or  insolvent insurer's contractual obligations, or that the economic or
  financial conditions as they affect  member  insurers  are  sufficiently
  adverse  to  render  the imposition of policy or contract liens to be in
  the public interest, or
    (B) Such suspension  is  necessary  and  proper  to  effectuate  at  a
  reasonable cost any guarantee, assumption or reinsurance agreement.
    (2)  The obligations of the corporation under subsection (a) or (b) of
  this section, whichever is applicable, with  regard  to  maintaining  in
  force  any  policy  or  contract of group life insurance or group health
  insurance shall be limited to one hundred eighty days from the date  the
  impaired  or insolvent insurer was placed under an order of liquidation,
  rehabilitation  or  conservation  under  article  seventy-four  of  this
  chapter, and the corporation shall have no obligation with regard to any
  claim  incurred  pursuant  to  any  such  policy  or contract beyond one
  hundred eighty days from such date, provided (A) that the superintendent
  shall have discretion to extend the period of one hundred eighty days up
  to three hundred sixty-six days with regard to any  policy  or  contract
  when he believes circumstances warrant, and
    (B)  that the superintendent and the corporation may make such further
  extensions of such period as they mutually agree are warranted.
    (3) If the superintendent or the corporation shall find  that  at  the
  time a covered annuity contract or funding agreement or a class thereof,
  other than an annuity contract, funding agreement or class thereof which
  funds  a  compromise  or  settlement  contained  in  a judgment or order
  entered pursuant to the provisions of section twelve  hundred  seven  of
  the  civil  practice  law  and  rules,  was  issued  by  the impaired or
  insolvent insurer the interest rate guaranteed under  such  contract  or
  agreement or class thereof was clearly excessive, the superintendent may
  petition  the  court having jurisdiction in this state, upon appropriate
  notice  to  and  opportunity  for  submission  of  comments   from   the
  corporation  and  owners  of  contracts  and  agreements  proposed to be
  affected, to limit the corporation's obligations under this article with
  respect to payment of interest to an interest rate which the court finds
  would have been appropriate and reasonable at the time the  contract  or
  agreement  or class thereof was issued. Nothing in this subsection shall
  limit the rights of a holder of a contract or agreement so  affected  as
  against the impaired or insolvent insurer.
    (4) Notwithstanding anything to the contrary in this article, under no
  circumstances shall the corporation have any obligation on account of an
  impaired  or insolvent insurer either to, or which inures to the benefit
  of, any person or firm  which  at  the  time  the  policy,  contract  or
  agreement  was  issued  or renewed or within ninety days of the date the
  insurer was determined to be impaired or insolvent, as the case may  be,
  directly  or  indirectly owned ten percent or more of or controlled such
  impaired or insolvent insurer; provided, however, that nothing  in  this
  subsection  shall  relieve the corporation of responsibility with regard
  to  contractual  obligations  of  such  insurer  under  certificates  of
  insurance issued to, and inuring solely to the benefit of, the employees
  of such person or firm.
    (d) If the corporation fails to act within a reasonable period of time
  as  provided  in  subsection  (a)  or  (b) of this section, whichever is
  applicable, the superintendent shall have the powers and duties  of  the

  corporation under this article with respect to any impaired or insolvent
  insurer.
    (e)   The   corporation  may  render  assistance  and  advice  to  the
  superintendent, upon his request, concerning rehabilitation, payment  of
  claims, continuance of coverage, or the performance of other contractual
  obligations of any impaired or insolvent insurer.
    (f)  When  any  person  receives  benefits  under  this  article,  the
  corporation shall possess all of the rights  under  the  covered  policy
  that  such  person  had immediately before such receipt to the extent of
  the benefits received because of this article whether the  benefits  are
  payments   of  contractual  obligations  or  continuation  of  coverage;
  provided, however, that the  corporation  shall  not  have  any  greater
  priority  against  the  assets  of  an  impaired or insolvent insurer by
  reason of this subsection than  is  expressly  given  by  section  seven
  thousand  four  hundred thirty-five of this chapter. The corporation may
  require an assignment to it, or the execution of  any  other  instrument
  evidencing  the  corporation's  possession, of such rights by any payee,
  policy or contract owner, beneficiary, insured or annuitant. The receipt
  of  such  assignment  or  other  instrument,  and   its   validity   and
  enforceability by the corporation in accordance with its terms under the
  laws  of  the  insurer's state of domicile or state of entry, shall be a
  condition precedent to the receipt of any rights or  benefits  conferred
  by this article upon such person.
    (g)  The  contractual obligations of the impaired or insolvent insurer
  for which the corporation becomes or  may  become  liable  shall  be  no
  greater  than  the  contractual obligations of the impaired or insolvent
  insurer would have been in the absence of an impairment or insolvency.
    (h) The corporation may:
    (1) Enter into such contracts as are necessary or proper to carry  out
  the provisions and purposes of this article.
    (2)  Sue  or  be sued, including taking any legal actions necessary or
  proper for recovery  of  any  unpaid  assessments  under  section  seven
  thousand seven hundred nine of this article.
    (3)  Borrow  money  to  effect  the  purposes  of  this  article.  The
  corporation may agree, as a condition of any borrowing, that the  lender
  will be subrogated to the rights of the corporation against the impaired
  or  insolvent  insurer to the extent of the amount borrowed and interest
  accruing thereon. Any note or other  evidence  of  indebtedness  of  the
  corporation  not  in  default  shall  be a legal investment for domestic
  insurers and may be carried as admitted assets.
    (4) Employ or retain such persons as are necessary or proper to handle
  the financial transactions of the corporation, and to perform such other
  functions as become necessary or proper under this article.
    (5) With the approval of the superintendent,  negotiate  and  contract
  with any liquidator, rehabilitator, conservator or ancillary receiver to
  carry out the powers and duties of the corporation.
    (6)  Take  such  legal  action as may be necessary to avoid payment of
  improper claims.
    (7) Exercise, for the purposes of  this  article  and  to  the  extent
  approved  by the superintendent, the powers of a domestic life insurance
  company, but in no case may the corporation issue insurance policies  or
  annuity  contracts  other  than  those issued to perform the contractual
  obligations of the impaired or insolvent insurer.
    (8) Exercise all powers necessary or convenient for  the  purposes  of
  this article.