2013 New York Consolidated Laws
ISC - Insurance
Article 76 - (7601 - 7614) PROPERTY/CASUALTY SECURITY FUNDS
7603 - Property/casualty insurance security fund.

 
    §  7603.  Property/casualty  insurance  security  fund.  (a)  (1)  The
  property/casualty insurance security fund shall be used in  the  payment
  of  allowed  claims  remaining unpaid, in whole or in part, by reason of
  the inability due to insolvency of an authorized  insurer  to  meet  its
  insurance obligations under policies:
    (A)  on  account  of claims from motor vehicle accidents as defined in
  subsection (f) of  section  seven  thousand  six  hundred  two  of  this
  article,
    (B)  for  all  of  the kinds of insurance specified in paragraphs four
  through fourteen, sixteen, nineteen through twenty-one, twenty-four  and
  subparagraphs  (A)  and (B) of paragraph twenty-six of subsection (a) of
  section one thousand one hundred thirteen of this chapter  with  respect
  to  coverage  of property or risks located or resident in this state, or
  outside this state but within the United  States,  its  possessions  and
  territories, and Canada,
    (C)  for  the kind of insurance providing disability benefits pursuant
  to article nine of the workers' compensation law issued by an authorized
  insurer licensed under article forty-one, sixty-one or sixty-six of this
  chapter with respect to coverage of risks located or  resident  in  this
  state,
    (D) in the kind of insurance providing workers' compensation insurance
  pursuant to subsection (j) of section three thousand four hundred twenty
  of this chapter,
    (E)  for  the  insurance provided by the medical malpractice insurance
  association,
    (F) for the  insurance  provided  pursuant  to  subdivision  two-a  of
  section  seventy-six  of  the  workers'  compensation  law  if  and when
  operative,
    (G) for the kinds of credit insurance as defined in subparagraphs  (B)
  and (C) of paragraph seventeen of subsection (a) of section one thousand
  one hundred thirteen of this chapter, and
    (H)  any  obligation for the return of unearned premiums on any policy
  specified in subparagraphs (A), (B), (C), (D), (E), (F) and (G)  hereof,
  which  shall, for the purposes of this article, be deemed to include the
  obligations  of  an  insurer  and  the  medical  malpractice   insurance
  association  under  medical  malpractice  claims-made policies to pay to
  successor entities the actuarially appropriate amounts for the provision
  of coverage to comply with the requirements of subsections (b), (c)  and
  (d)  of  section  three  thousand four hundred thirty-six and paragraphs
  two, three and four of subsection (f)  of  section  five  thousand  five
  hundred four of this chapter.
    (2)  No  payment  from  the  property/casualty insurance security fund
  shall be made to any person who owns or controls ten percent or more  of
  the voting securities of the insolvent insurer and no payment on any one
  claim  shall  exceed  one  million  dollars, provided that the amount of
  payment on a claim and the aggregate for all  claims  shall  be  further
  limited  by the provisions of paragraph two of subsection (g) of section
  seven thousand six hundred two of this article.
    (b) (1) Contributions to the property/casualty insurance security fund
  shall be determined on the basis  of  net  direct  written  premiums  on
  policies insuring property or risks located or resident in this state.
    (2) Every insurer shall pay into such fund, upon filing each quarterly
  return  pursuant  to  section  seven  thousand  six hundred five of this
  article, one-half of one percent of its net direct written  premiums  as
  shown for the period covered by such return.
    (c)  (1)  Whenever  the superintendent determines, pursuant to section
  seven thousand six hundred six of this article, that the  net  value  of
  the  property/casualty  insurance  security fund is at least one hundred

  fifty million dollars, no further contributions shall be made after  the
  fund  year  in  which the determination is first made, but if thereafter
  the superintendent determines that payments made from the  fund  by  the
  commissioner  to  the superintendent acting as liquidator, rehabilitator
  or conservator have reduced the net value to an amount  less  than  such
  amount, the superintendent shall cause contributions to be resumed until
  the  end  of  the  fund  year in which he first determines that such net
  value exceeds such amount.
    (2) If contributions are so resumed, they shall be apportioned:
    (A)  ratably  among  those  kinds  of  insurance  as  to   which   the
  commissioner  made  payments during the fund year in which the net value
  of the property/casualty insurance security fund was reduced below  such
  amount, and
    (B)  among insurers in accordance with their respective amounts of net
  direct premiums written in each such kind of insurance.
    (d) (1) All income earned on moneys in the fund (after  deducting  any
  amounts  paid  for allowed claims and administrative expenses during the
  preceding  year)  shall  be  credited,   upon   certification   by   the
  superintendent  to  the  commissioner,  to the general fund of the state
  treasury; except that with respect to all such income earned on or after
  July  first,  nineteen  hundred  seventy-nine  such  moneys   shall   be
  distributed annually in the following manner:
    (A)  Pursuant  to  regulations of the superintendent, the deficit from
  the  operations  of  the  New  York  property   insurance   underwriting
  association   shall   be   credited   with   such  income  earned,  upon
  certification by the superintendent to the commissioner, in  a  sum  not
  exceeding such total income earned or the sum of fifteen million dollars
  whichever is the lesser in any one year. Such credit shall be in lieu of
  a transfer of such funds to the general fund of the state treasury.
    (B) Any balance of earned income shall be credited, upon certification
  by  the  superintendent  to the commissioner, to the general fund of the
  state treasury; but only when the value of the fund exceeds the  sum  of
  two hundred forty million dollars.
    (2)  The superintendent, after consultation with the commissioner, may
  by regulation provide for contributions  to  be  made  in  the  form  of
  acceptable  securities,  and  for the management and disposition of such
  securities. The income from such securities shall  be  included  in  the
  distribution outlined in paragraph one hereof.
    (3)  The  superintendent is authorized to use the income earned on the
  moneys of the fund to offset  the  deficit  of  the  New  York  property
  insurance  underwriting association in accordance with subsection (d) of
  section five thousand four hundred five of this chapter,  provided  that
  any  income  earned  on  the  moneys  of  the fund which in any one year
  exceeds fifteen million dollars or  which  the  superintendent  has  not
  utilized  for  the  purposes of such subsection shall be credited to the
  corpus of the fund until the  superintendent  determines  that  its  net
  value  is  two  hundred  forty  million dollars, and thereafter shall be
  credited, upon certification by the superintendent to the  commissioner,
  to the general fund of the state treasury.
    (e)  (1)  (A)  Notwithstanding  any  other  provision  of  law  to the
  contrary, the superintendent shall annually no later than November first
  in each year submit to the director of  the  budget  a  request  for  an
  appropriation of ninety million dollars. The governor shall include such
  amount  in  a  budget  bill  for  the  next state fiscal year. The state
  comptroller shall encumber the amount so appropriated before the end  of
  the  fiscal  year  for  which any such appropriation is made. If for any
  fiscal year  commencing  on  or  after  April  first,  nineteen  hundred
  eighty-three,  the  governor fails to submit a budget bill containing an

  appropriation in the amount  requested  by  the  superintendent  or  the
  legislature  fails  to appropriate the amount in a budget bill submitted
  by the governor for such fiscal year, the amount  appropriated  for  and
  encumbered  during  the preceding fiscal year shall be payable forthwith
  to the fund on July first of such year in the manner prescribed by  law,
  provided,  however,  that  such  amount  shall  not exceed the amount of
  moneys transferred to the general fund from the  fund  pursuant  to  the
  provisions  of  chapter  fifty-five  of  the  laws  of  nineteen hundred
  eighty-two.
    (B) Any appropriation made to the fund pursuant to this section  shall
  be  included  as an asset for the purposes of computing the value or net
  value of the fund pursuant to this section.
    (C) Any transfer of moneys from  the  fund  to  the  general  fund  in
  accordance  with  the  provisions  of  chapter fifty-five of the laws of
  nineteen hundred  eighty-two  is  deemed  a  proper  and  prudent  legal
  undertaking  for  any  state  officer  with  the  responsibility for the
  custody or the investment of the assets of the fund, notwithstanding any
  other provision of law to the contrary.
    (2) Upon certification by the superintendent that  further  sums,  not
  exceeding  fifty  million  dollars in the aggregate, are required by the
  public motor vehicle liability security fund to meet its obligations and
  accomplish the purposes of this article the commissioner shall  transfer
  from  the assets of the property/casualty insurance security fund to the
  public motor vehicle liability security fund amounts to be specified  by
  the  superintendent.  Such  sums, not exceeding fifty million dollars in
  the aggregate,  shall  be  a  liability  of  the  public  motor  vehicle
  liability  security  fund  and  shall be repaid to the property/casualty
  insurance security fund pursuant to a plan of repayment to be prescribed
  by the superintendent which may provide for an increase in the level  of
  payments  into  the fund provided for in subsection (b) of section seven
  thousand six hundred four of this article.