2012 New York Consolidated Laws
ISC - Insurance
Article 77 - (7701 - 7718) THE LIFE INSURANCE COMPANY GUARANTY CORPORATION OF NEW YORK ACT
7713 - Miscellaneous provisions.

 
    § 7713. Miscellaneous provisions. (a) Nothing in this article shall be
  construed to reduce the liability for unpaid assessments of the insureds
  of  an  impaired  or  insolvent  insurer  operating  under  a  plan with
  assessment liability.
    (b) The corporation shall maintain records  of  all  negotiations  and
  meetings in which the corporation or its representatives are involved to
  discuss the activities of the corporation in carrying out its powers and
  duties under section seven thousand seven hundred eight of this article,
  except  to  the  extent otherwise provided by or pursuant to the plan of
  operation. Records of such negotiations or meetings shall be made public
  only  upon  the  termination  of  a   liquidation,   rehabilitation   or
  conservation  proceeding  involving  the  impaired or insolvent insurer,
  upon the termination of the impairment or insolvency of the insurer,  or
  upon  the  order  of a court of competent jurisdiction.  Nothing in this
  subsection shall limit the duty of the corporation to render a report of
  its activities under section seven thousand seven  hundred  fourteen  of
  this article.
    (c)  (1)  During  an  article  seventy-four rehabilitation proceeding,
  assets of the impaired or insolvent insurer which are determined by  the
  superintendent  to  be  currently  available may be used to continue all
  covered policies, and pay all contractual obligations, of  the  impaired
  or  insolvent insurer that would otherwise be covered by the corporation
  under section seven thousand seven hundred eight of  this  article.  The
  corporation   shall,  subsequent  to  the  termination  of  the  article
  seventy-four rehabilitation proceeding  and  within  a  reasonable  time
  after  the  commencement  of  a  liquidation  proceeding  under  article
  seventy-four of this chapter reimburse the estate  of  the  impaired  or
  insolvent  insurer  for  such portion of the amount of assets so used to
  the extent necessary to pay class one, two and three claims pursuant  to
  paragraph  one, two or three of subsection (a) of section seven thousand
  four hundred thirty-five of this chapter. The corporation shall  have  a
  claim  against  the estate of the impaired or insolvent insurer equal to
  the full amount of such reimbursement, consistent with the provisions of
  paragraph four of subsection (a) of section seven thousand four  hundred
  thirty-five of this chapter.
    (2)  During  an article seventy-four rehabilitation proceeding, assets
  of the impaired  or  insolvent  insurer  which  are  determined  by  the
  superintendent to be currently available may be used to continue covered
  policies,  and pay contractual obligations, of the impaired or insolvent
  insurer, other than the covered  policies  and  contractual  obligations
  that  are  covered by the corporation under section seven thousand seven
  hundred eight of this article, if a corporation,  association  or  other
  organization  which  performs or will perform functions similar to those
  of  the  corporation  enters  into  an  agreement  satisfactory  to  the
  superintendent  prior  to such use of such assets to repay the amount of
  such assets subsequent to the termination of  the  article  seventy-four
  rehabilitation  proceeding  and  within  a  reasonable  time  after  the
  commencement of a liquidation proceeding under article  seventy-four  of
  this chapter.
    (d)  In addition to the duties and powers enumerated elsewhere in this
  chapter, and subject to the limitations and exclusions contained in this
  and  other  sections  of  this  chapter,  upon  the  commencement  of  a
  proceeding  under  article  seventy-four of this chapter with respect to
  any impaired or  insolvent  domestic  insurer,  the  superintendent  may
  request and receive from the corporation, and the corporation shall lend
  to  the  superintendent  upon such request, an amount not to exceed five
  hundred thousand dollars as  determined  by  the  superintendent  to  be
  necessary  on  an  emergency  basis  for  use  by the superintendent, as

  liquidator or rehabilitator, in the administration  of  the  affairs  of
  such impaired or insolvent insurer.  To the extent it deems necessary or
  appropriate  to carry out its duties under this section, the corporation
  may  borrow  such  amount  in  accordance with subsection (h) of section
  seven thousand seven hundred eight of this article and may assess member
  insurers for the purpose of repaying such  borrowing.  Such  assessments
  against each member insurer shall be in the proportion that the premiums
  received  by  such insurer on business in this state in all accounts for
  the calendar  year  preceding  the  assessment  bear  to  such  premiums
  received  on  business  in  this state in all accounts for such calendar
  year by all assessable member insurers. The  corporation  shall  have  a
  claim  against the estate of such impaired or insolvent insurer equal to
  the  amount  loaned  to  the  superintendent  in  accordance  with  this
  subsection,  together  with interest thereon at the maximum rate allowed
  by subdivision one of section 5-501 of the general obligations law,  and
  such  claim  shall  be  treated as a class one claim under section seven
  thousand four hundred thirty-five of this chapter.
    (e) The corporation  shall  have  a  claim  against  the  impaired  or
  insolvent  insurer  for  all amounts expended by the corporation for the
  purposes of carrying out its obligations under this article.
    (f) (1) Prior to the  termination  of  any  proceeding  under  article
  seventy-four  of this chapter, the court may take into consideration the
  contributions of the respective parties, including the corporation,  the
  shareholders and policyholders of the impaired or insolvent insurer, and
  any  other  party  with  a  bona  fide  interest, in making an equitable
  distribution of the ownership  rights  of  such  impaired  or  insolvent
  insurer.  In  such  a determination, consideration shall be given to the
  welfare of the policyholders of the continuing or successor insurer.
    (2) No distribution  to  shareholders,  if  any,  of  an  impaired  or
  insolvent  insurer shall be made, and no rehabilitation proceeding shall
  be terminated (except by a final order of liquidation), until and unless
  the total amount of valid  claims  of  the  corporation  for  all  funds
  expended  in  carrying  out  its  powers  and duties under section seven
  thousand seven hundred eight  of  this  article  with  respect  to  such
  insurer,  together  with  interest thereon, have been fully recovered by
  the corporation or an arrangement satisfactory to  the  corporation  has
  been made for their recovery. Such interest shall be at a rate which, in
  the opinion of the court, fairly compensates the corporation for the use
  of  such  funds,  but  in  no  event shall such rate be in excess of the
  maximum rate allowed by subdivision one of section 5-501 of the  general
  obligations law at the time such funds were expended.
    (g)  (1)  If  an order for liquidation or rehabilitation of an insurer
  domiciled in this state has been entered, the receiver  appointed  under
  such  order shall have a right to recover on behalf of the insurer, from
  any parent corporation  or  holding  company  or  person  who  otherwise
  controlled   the  insurer,  the  amount  of  distributions  (other  than
  distributions of shares of the same class of stock) paid by the  insurer
  on  its  capital stock, made at any time during the five years preceding
  the petition for liquidation, conservation  or  rehabilitation,  as  the
  case  may  be,  subject  to the limitations of paragraphs two, three and
  four of this subsection.
    (2) No such distribution shall be recoverable  if  the  insurer  shows
  that  when  paid,  such distribution was reasonable and that the insurer
  did not know and could not reasonably have known that such  distribution
  might  adversely  affect  the  ability  of  the  insurer  to fulfill its
  contractual obligations.   Notice  to  the  superintendent  pursuant  to
  subsection  (a)  of  section  four  thousand  two  hundred seven of this
  chapter and the lack of a prior objection by the superintendent to  such

  distributions  shall  not  constitute evidence to support the showing of
  reasonableness which would prevent the recovery of such distribution.
    (3)  Any  person  who was a parent corporation or holding company or a
  person  who  otherwise  controlled  the  insurer  at   the   time   such
  distributions   were   paid   shall  be  liable  up  to  the  amount  of
  distributions such  persons  received.  Any  person  who  was  a  parent
  corporation  or holding company or a person who otherwise controlled the
  insurer at the time such distributions were declared shall be liable  up
  to  the  amount of distributions he would have received if they had been
  paid immediately. If two or more persons are liable with respect to  the
  same distribution, they shall be jointly and severally liable.
    (4)  The maximum amount recoverable under this subsection shall be the
  amount needed in excess of all other available assets of the impaired or
  insolvent insurer to pay the contractual obligations of the impaired  or
  insolvent insurer and to reimburse the corporation for such payments and
  for all other claims the corporation may have pursuant to subsection (c)
  of this section.
    (5) To the extent that any person liable under paragraph three of this
  subsection  is  insolvent  or  otherwise fails to pay claims due from it
  pursuant to such paragraph, its parent corporation or holding company or
  person who otherwise controlled it at  the  time  the  distribution  was
  paid, shall be jointly and severally liable for any resulting deficiency
  in  the amount recovered from such parent corporation or holding company
  or person who otherwise controlled it.