NY Ins L § 1712 (2021)
2021 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.