2012 New York Consolidated Laws
ISC - Insurance
Article 77 - (7701 - 7718) THE LIFE INSURANCE COMPANY GUARANTY CORPORATION OF NEW YORK ACT
7709 - Assessments.

 
    §  7709.  Assessments.  (a)  For  the  purpose  of providing the funds
  necessary to carry out the powers and duties  of  the  corporation,  the
  board of directors shall assess the member insurers, separately for each
  account,  at such time and for such amounts as the board finds necessary
  in accordance with the provisions of paragraph three of  subsection  (c)
  of  this  section. Assessments shall be due on the date set by the board
  which shall be not less than thirty days nor more than sixty days  after
  prior  written  notice  to the member insurers. Assessments shall accrue
  interest at the maximum rate allowed by subdivision one of section 5-501
  of the general obligations law on and after the due date.
    (b) There shall be three classes of assessments, as follows:
    (1) Class A assessments shall be  made  for  the  purpose  of  meeting
  administrative costs and other general expenses.
    (2) Class B assessments shall be made to the extent necessary to carry
  out  the  powers  and  duties  of  the  corporation  under section seven
  thousand seven hundred eight of this article with regard to an  impaired
  or insolvent domestic insurer.
    (3) Class C assessments shall be made to the extent necessary to carry
  out  the  powers  and  duties  of  the  corporation  under section seven
  thousand seven hundred eight of this article with regard to an  impaired
  or insolvent foreign or alien insurer.
    (c)  (1)  The  amount of any class A assessment shall be determined by
  the board and may be made on a non pro rata basis. Such assessment shall
  be credited against future impairment  or  insolvency  assessments.  The
  maximum  such assessment against any member insurer in any calendar year
  shall be determined, in accordance with the table set  forth  below,  on
  the  basis  of  its  admitted  assets  as  shown on its annual statement
  required by this chapter for the year next preceding the  date  of  such
  assessment:
 
  Companies with Admitted Assets of                   Maximum Assessment
  Up to $50,000,000                                           $200
  $50,000,000 to $1,000,000,000                              $1000
  $1,000,000,000 or more                                     $2000
 
    (2) The amount of any class B or class C assessment shall be allocated
  for  assessment  purposes  among the accounts in the proportion that the
  premiums received by the impaired or insolvent insurer on  the  policies
  or  contracts  covered  by  each  account  for  the  last  calendar year
  preceding the assessment in which  the  impaired  or  insolvent  insurer
  received  premiums  bears  to  the premiums received by such insurer for
  such calendar year  on  all  covered  policies.  Class  B  and  class  C
  assessments  against  member  insurers  for each account shall be in the
  proportion that the premiums received on business in this state by  each
  assessed  member  insurer  on  policies  covered by each account for the
  three calendar years preceding the assessment  bears  to  such  premiums
  received  on  business  in  this  state  for  such calendar years by all
  assessed member insurers.
    (3) Assessments for funds to meet the requirements of the  corporation
  with  respect to an impaired or insolvent insurer shall be made within a
  reasonable  time  after  deemed  necessary  by  the  superintendent   to
  implement  the  purposes  of  this article. Classification of assessment
  under subsection (b) of this  section  and  computation  of  assessments
  under  this  subsection  shall  be  made  with  a  reasonable  degree of
  accuracy, recognizing  that  exact  determinations  may  not  always  be
  possible.
    (d)  The  corporation  may  abate  or  defer, in whole or in part, the
  assessment of a member insurer if, in the opinion of the board,  payment

  of  the  assessment  would endanger the ability of the member insurer to
  fulfill its contractual obligations. In the event an assessment  against
  a  member insurer is abated, or deferred in whole or in part, the amount
  by  which  such assessment is abated or deferred may be assessed against
  the other member insurers in a manner  consistent  with  the  basis  for
  assessments set forth in this section.
    (e)  (1)  The  total  assessment  against  all member insurers for all
  impairments and insolvencies, less the amount of refunds (not  including
  interest) to member insurers pursuant to subsection (f) of this section,
  shall  not exceed five hundred million dollars, except that with respect
  to a member insurer that is a domestic insurer  and  is  subject  to  an
  order of rehabilitation under article seventy-four of this chapter as of
  March  first  two  thousand  twelve, such assessment limit shall be five
  hundred fifty-eight million dollars; provided, however, that  such  five
  hundred  fifty-eight  million dollar limit shall be subject to reduction
  in an amount, if any, determined by the superintendent, on  a  date  not
  earlier  than  twelve  months after the entry of an order of liquidation
  with respect to  such  domestic  insurer,  to  be  not  needed  for  the
  corporation to be able to pay its obligations and reasonable expenses in
  connection  with  the  liquidation  of  such domestic insurer, but in no
  event shall such reduction exceed fifty-eight million dollars.
    (2) The total of all  assessments  upon  a  member  insurer  for  each
  account  shall  not  in any one calendar year exceed two percent of such
  insurer's premiums received in  this  state  during  the  calendar  year
  preceding  the assessment on the policies covered by the account. If the
  maximum assessment, together with the other assets of the corporation in
  either account, does not provide in any one year in  either  account  an
  amount  sufficient to carry out the responsibilities of the corporation,
  the necessary additional funds shall be assessed as soon  thereafter  as
  permitted by this article.
    (f)  The  board may, by an equitable method as established in the plan
  of operation, refund to member insurers, by retirement  of  certificates
  of  contribution  in  proportion  to the contribution of each insurer to
  that account, the amount by which the assets of the account  exceed  the
  amount the board finds necessary to carry out during the coming year the
  obligations  of  the  corporation with regard to that account, including
  assets  accruing  from  net  realized  capital  gains  and  income  from
  investments.  A  reasonable  amount  may  be  retained in any account to
  provide funds for the continuing expenses of  the  corporation  and  for
  future losses if refunds are impractical.
    (g)  It  shall  be  proper  for any member insurer, in determining its
  premium rates and policy owner dividends as to  any  kind  of  insurance
  within  the  scope  of  this  article, to consider the amount reasonably
  necessary to meet its assessment obligations  under  this  article  with
  respect to insurers which have become impaired or insolvent.
    (h)  The  corporation shall issue to each insurer paying an assessment
  under this article, other than a class A assessment,  a  certificate  of
  contribution, in a form prescribed by the superintendent, for the amount
  of  the  assessment  so  paid.  All outstanding certificates shall be of
  equal dignity and priority irrespective of amounts or dates of issue.  A
  certificate of contribution may be shown by the insurer in its financial
  statement as an asset in such form and for  such  amount,  if  any,  and
  period of time as the superintendent may approve.