2019 New York Laws
ISC - Insurance
Article 17 - Subsidiaries of Domestic Life Insurance Companies and Certain Other Entities
1712 - Relationships and Transactions Between Parent Corporation and Subsidiary.

§  1712. Relationships and transactions between parent corporation and
subsidiary. (a)  The  business  operations,  corporate  proceedings  and
fiscal  and  accounting  records  of  subsidiaries shall be conducted or
maintained so as to assure the separate legal and  operating  identities
of  the  parent  corporation  and  subsidiary,  but nothing herein shall
preclude arrangements for common management or the cooperative or  joint
use  of personnel, property, or services, otherwise consistent with this
chapter.  All  transactions  between  the  parent  corporation  and  its
subsidiaries  shall  be fair and equitable, charges or fees for services
performed shall be reasonable and all  expenses  incurred  and  payments
received  shall  be  allocated to the parent corporation on an equitable
basis  in  conformity  with  customary  insurance  accounting  practices
consistently  applied.  The books, accounts and records of each party to
all such transactions shall be so maintained as to disclose clearly  and
accurately  the  nature  and details of the transactions, including such
accounting information as is necessary to support the reasonableness  of
the charges or fees to the respective parties.
  (b)  The  following  transactions between a parent corporation and any
subsidiary may not be entered into unless  the  parent  corporation  has
notified  the  superintendent  in writing of its intention to enter into
any such transaction at least thirty days prior thereto, or with  regard
to  reinsurance  treaties  or  agreements at least forty-five days prior
thereto, or such shorter period as the superintendent  may  permit,  and
the superintendent has not disapproved it within such period:
  (1)  sales,  purchases,  exchanges,  loans,  extensions  of credit, or
investments with a subsidy, provided the transactions are  equal  to  or
exceed:
  (A)  three percent of the parent corporation's admitted assets at last
year-end, with regard to a domestic life insurance company; or
  (B) the lesser of three percent of the parent  corporation's  admitted
assets  or  twenty-five percent of capital and surplus at last year-end,
with regard to a domestic corporation subject to article forty-three  of
this chapter; or
  (2)  loans  or  extensions  of  credit  to  any  person  who  is not a
subsidiary, where the parent corporation makes loans  or  extensions  of
credit  with  the  agreement  or understanding that the proceeds of such
transactions, in whole or in substantial part, are to be  used  to  make
loans   or  extensions  of  credit  to,  purchase  assets  of,  or  make
investments in, any subsidiary of  the  parent  corporation  making  the
loans or extensions of credit, provided the transactions are equal to or
exceed:
  (A)  three percent of the parent corporation's admitted assets at last
year-end, with regard to a domestic life insurance company; or
  (B) the lesser of three percent of the parent  corporation's  admitted
assets  or  twenty-five percent of capital and surplus at last year-end,
with regard to a domestic corporation subject to article forty-three  of
this chapter; or
  (3)  reinsurance  treaties  or  agreements  with a subsidiary that the
parent corporation has not otherwise submitted  to  the  superintendent.
This  shall  include  agreements that may require, as consideration, the
transfer of assets from a parent corporation to a non-subsidiary, if  an
agreement  or  understanding  exists  between the parent corporation and
non-subsidiary that any portion of the assets will be transferred to one
or more subsidiaries of the parent corporation; and
  (4)  management  agreements,   service   contracts,   tax   allocation
agreements, guarantees, and all cost-sharing arrangements.