N.Y. ISC Law § 7403 — New York Code / Act ISC / Article 74 / Section 7403
Order of rehabilitation; advances from property/casualty insurance security fund; termination
Status: in_force

§ 7403. Order of rehabilitation; advances from property/casualty\ninsurance security fund; termination. (a) An order to rehabilitate a\ndomestic insurer shall direct the superintendent and his successors in\noffice, as rehabilitator, forthwith to take possession of the property\nof such insurer and to conduct the business thereof, and to take such\nsteps toward the removal of the causes and conditions which have made\nsuch proceeding necessary as the court shall direct.\n  * (b) (1) If: (i) provision is made therefor in an order to\nrehabilitate a domestic insurer, (ii) more than fifty percent of the\ninsurer's net direct premiums in the preceding three calendar years were\nderived from business in this state which is protected by the\nproperty/casualty insurance security fund, and (iii) such insurer has\nconsented to rehabilitation, the commissioner of taxation and finance\nshall advance monies of such fund, in such amounts as specified in the\ncourt's order, to the rehabilitator to enable the insurer to comply with\nany surplus requirement or other requirement of this chapter.\n  (2) Before issuing such order, the court shall determine that the\ninsurer has the potential and capability, pursuant to a plan submitted\nby the rehabilitator, of complying with all surplus and other\nrequirements of this chapter and repaying such advance to the fund\nwithin two years after termination of the rehabilitation proceeding, at\na rate of interest approved by the superintendent to be determined\nannually which shall not be less than the average rate of return of the\nfund as determined by the superintendent for the preceding calendar\nyear.\n  (3) The plan shall include: (i) an explanation of the factors leading\nto the insurer's condition requiring rehabilitation and the procedures\nproposed to improve its condition, and (ii) a provision for posting\ncollateral with the rehabilitator as security for the advance, to the\nextent that the insurer's assets permit.\n  (4) The court shall not order any advance to the rehabilitator without\nhis specific request or if the insurer's required capital or surplus is\nimpaired in an amount exceeding the greater of thirty million dollars or\nfifteen percent of the insurer's net direct premium writings in the\nprevious calendar year. Total advances to an insurer shall not exceed\nthe greater of forty million dollars or twenty percent of such net\ndirect premium writings. No advance shall be made on or after July\nfirst, two thousand which would lower the amount of assets in the fund\nbelow one hundred ninety-five million dollars.\n  (5) Advances shall, in all respects except as to rate of interest, be\nsubject to the provisions of section one thousand three hundred seven of\nthis chapter, provided that in the event that an insurer which has\nreceived an advance pursuant to this subsection is subsequently the\nsubject of an order of liquidation, the claim of the fund for the\nadvance and any accrued interest shall be paid to the fund in accordance\nwith the provisions of section seven thousand four hundred thirty-four\nof this article.\n  (6) This subsection shall expire July first, two thousand, provided\nthat the insurer's obligation to repay to the fund moneys advanced to it\nunder this subsection, and the fund's claim for the advance, and any\naccrued interest, as a priority over all non-secured creditors, shall\nsurvive such expiration date.\n  * NB Expired July 1, 2000\n  (c) If at any time the superintendent deems further efforts to\nrehabilitate such insurer would be futile, he may apply to the court\nunder this article for an order of liquidation.\n  (d) The rehabilitator or any interested person upon due notice to the\nsuperintendent, at any time, may apply for an order terminating any\nrehabilitation proceeding and permitting such insurer to resume\npossession of its property and the conduct of its business, but no such\norder shall be granted except when, after a full hearing, the court\nshall determine that the purposes of the proceeding have been fully\naccomplished.\n