2023 New York Laws › ISC - Insurance › Article 77 - The Life and Health 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, health,
or  property/casualty  insurance  company,  but  in  no  case  may   the
corporation  issue  insurance policies or contracts 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.