NY Ins L § 7708 (2021)
2021 New York Laws ISC - Insurance Article 77 - The Life Insurance Company Guaranty Corporation of New York Act 7708 - Powers and Duties of the Corporation.

§  7708.  Powers  and  duties  of  the corporation. In addition to the powers and duties enumerated in other  sections  of  this  article,  and subject  to  limitations  and  exclusions  contained  in  this and other sections of this article:  (a) (1) If a domestic insurer is an impaired or insolvent insurer, the corporation shall, with the approval of the superintendent:  (A) guarantee,  assume,  or  reinsure,  or  cause  to  be  guaranteed, assumed,  or reinsured, the covered policies, or arrange for replacement by policies found by the superintendent to be substantially  similar  to such covered policies;  (B)  assure  payment of the contractual obligations of the impaired or insolvent insurer; and  (C) provide such moneys, pledges, notes, guarantees or other means  as are reasonably necessary to discharge such duties.  (2)  The  aggregate liability of the corporation under this subsection shall not  exceed  five  hundred  thousand  dollars  for  all  benefits, including  cash  values,  with respect to any one life or, to the extent benefits are not allocated pursuant to a covered policy to any one life, to any one covered policy; provided, however,  that  (A)  the  foregoing limitation  shall  not  apply to any group or blanket accident or health insurance  or  accident  and  health  insurance  policy;  and  (B)   the corporation  shall  be  liable under this subsection in an amount not to exceed one million dollars for all benefits, including cash values, with respect to any group annuity contract (or portion of any such  contract) that  does  not  guarantee annuity benefits with respect to any specific individual identified in the contract and with respect  to  any  funding agreement issued to fund benefits under any employee benefit plan.  (b)  (1)  If  a  foreign  or alien insurer is an impaired or insolvent insurer, the corporation shall, with the approval of the superintendent:  (A) guarantee, assume, or reinsure or cause to be guaranteed, assumed, or reinsured  the  covered  policies,  or  arrange  for  replacement  by policies found by the superintendent to be substantially similar to such covered policies;  (B)  assure  payment  of  the contractual obligations of the insolvent insurer; and  (C) provide such moneys, pledges, notes, guarantees, or other means as are reasonably necessary to discharge such duties.  (2) The aggregate liability of the corporation under  this  subsection shall  be  the excess over any amount that the superintendent determines to  be  the  statutory  obligation  of  the  guaranty   corporation   or association of the foreign or alien insurer's state of domicile or state of  entry, but in no event shall the corporation's liability, when added to the amount so determined to be available  from  such  other  guaranty corporation or association, exceed five hundred thousand dollars for all benefits,  including  cash  values, with respect to any one life, or, to the extent benefits are not allocated pursuant to a  covered  policy  to any one life, to any one covered policy; provided, however, that the (A) foregoing five hundred thousand dollar limitation shall not apply to any group  or  blanket  accident  or health insurance or accident and health insurance policy; and (B) liability of all such guaranty corporations or associations may in the  aggregate  equal,  but  shall  not  exceed  one million dollars for all benefits, including cash values, with respect to any  group  annuity contract (or portion of any such contract) that does not guarantee annuity benefits with respect to any  specific  individual identified  in  the  contract  and with respect to any funding agreement issued to fund benefits under any employee benefit plan.  (c) (1) The superintendent  may,  with  the  approval  of  the  court, suspend  cash  surrender rights and policy loan rights under any covered  policy for an initial period not to exceed one year and  for  additional successive  periods, each not to exceed one year, all in addition to any contractual provision for deferral of cash or policy loan values, upon a finding that:  (A) The amounts which can be assessed under this article are less than the amounts needed to assure full and prompt performance of the impaired or  insolvent insurer's contractual obligations, or that the economic or financial conditions as they affect  member  insurers  are  sufficiently adverse  to  render  the imposition of policy or contract liens to be in the public interest, or  (B) Such suspension  is  necessary  and  proper  to  effectuate  at  a reasonable cost any guarantee, assumption or reinsurance agreement.  (2)  The obligations of the corporation under subsection (a) or (b) of this section, whichever is applicable, with  regard  to  maintaining  in force  any  policy  or  contract of group life insurance or group health insurance shall be limited to one hundred eighty days from the date  the impaired  or insolvent insurer was placed under an order of liquidation, rehabilitation  or  conservation  under  article  seventy-four  of  this chapter, and the corporation shall have no obligation with regard to any claim  incurred  pursuant  to  any  such  policy  or contract beyond one hundred eighty days from such date, provided (A) that the superintendent shall have discretion to extend the period of one hundred eighty days up to three hundred sixty-six days with regard to any  policy  or  contract when he believes circumstances warrant, and  (B)  that the superintendent and the corporation may make such further extensions of such period as they mutually agree are warranted.  (3) If the superintendent or the corporation shall find  that  at  the time a covered annuity contract or funding agreement or a class thereof, other than an annuity contract, funding agreement or class thereof which funds  a  compromise  or  settlement  contained  in  a judgment or order entered pursuant to the provisions of section twelve  hundred  seven  of the  civil  practice  law  and  rules,  was  issued  by  the impaired or insolvent insurer the interest rate guaranteed under  such  contract  or agreement or class thereof was clearly excessive, the superintendent may petition  the  court having jurisdiction in this state, upon appropriate notice  to  and  opportunity  for  submission  of  comments   from   the corporation  and  owners  of  contracts  and  agreements  proposed to be affected, to limit the corporation's obligations under this article with respect to payment of interest to an interest rate which the court finds would have been appropriate and reasonable at the time the  contract  or agreement  or class thereof was issued. Nothing in this subsection shall limit the rights of a holder of a contract or agreement so  affected  as against the impaired or insolvent insurer.  (4) Notwithstanding anything to the contrary in this article, under no circumstances shall the corporation have any obligation on account of an impaired  or insolvent insurer either to, or which inures to the benefit of, any person or firm  which  at  the  time  the  policy,  contract  or agreement  was  issued  or renewed or within ninety days of the date the insurer was determined to be impaired or insolvent, as the case may  be, directly  or  indirectly owned ten percent or more of or controlled such impaired or insolvent insurer; provided, however, that nothing  in  this subsection  shall  relieve the corporation of responsibility with regard to  contractual  obligations  of  such  insurer  under  certificates  of insurance issued to, and inuring solely to the benefit of, the employees of such person or firm.  (d) If the corporation fails to act within a reasonable period of time as  provided  in  subsection  (a)  or  (b) of this section, whichever is applicable, the superintendent shall have the powers and duties  of  the  corporation under this article with respect to any impaired or insolvent insurer.  (e)   The   corporation  may  render  assistance  and  advice  to  the superintendent, upon his request, concerning rehabilitation, payment  of claims, continuance of coverage, or the performance of other contractual obligations of any impaired or insolvent insurer.  (f)  When  any  person  receives  benefits  under  this  article,  the corporation shall possess all of the rights  under  the  covered  policy that  such  person  had immediately before such receipt to the extent of the benefits received because of this article whether the  benefits  are payments   of  contractual  obligations  or  continuation  of  coverage; provided, however, that the  corporation  shall  not  have  any  greater priority  against  the  assets  of  an  impaired or insolvent insurer by reason of this subsection than  is  expressly  given  by  section  seven thousand  four  hundred thirty-five of this chapter. The corporation may require an assignment to it, or the execution of  any  other  instrument evidencing  the  corporation's  possession, of such rights by any payee, policy or contract owner, beneficiary, insured or annuitant. The receipt of  such  assignment  or  other  instrument,  and   its   validity   and enforceability by the corporation in accordance with its terms under the laws  of  the  insurer's state of domicile or state of entry, shall be a condition precedent to the receipt of any rights or  benefits  conferred by this article upon such person.  (g)  The  contractual obligations of the impaired or insolvent insurer for which the corporation becomes or  may  become  liable  shall  be  no greater  than  the  contractual obligations of the impaired or insolvent insurer would have been in the absence of an impairment or insolvency.  (h) The corporation may:  (1) enter into such contracts as are necessary or proper to carry  out the provisions and purposes of this article;  (2)  sue  or  be sued, including taking any legal actions necessary or proper for recovery  of  any  unpaid  assessments  under  section  seven thousand seven hundred nine of this article;  (3)  borrow  money  to  effect the purposes of this article, provided, however,  that  the  corporation  may  agree,  as  a  condition  of  any borrowing,  that  the  lender  will  be  subrogated to the rights of the corporation against the impaired or insolvent insurer to the  extent  of the  amount borrowed and interest accruing thereon, and provided further that any note or other evidence of indebtedness of the  corporation  not in  default shall be a legal investment for domestic insurers and may be carried as admitted assets;  (4) employ or retain such persons as are necessary or proper to handle the financial transactions of the corporation, and to perform such other functions as become necessary or proper under this article;  (5) with the approval of the superintendent,  negotiate  and  contract with any liquidator, rehabilitator, conservator or ancillary receiver to carry out the powers and duties of the corporation;  (6)  take  such  legal  action as may be necessary to avoid payment of improper claims;  (7) exercise, for the purposes of  this  article  and  to  the  extent approved  by the superintendent, the powers of a domestic life insurance company, but in no case may the corporation issue insurance policies  or annuity  contracts  other  than  those issued to perform the contractual obligations of the impaired or insolvent insurer;  (8) fund a resolution facility established pursuant to  section  seven thousand seven hundred nineteen of this article; and  (9)  exercise  all  powers necessary or convenient for the purposes of this article.