2023 New York Laws › ISC - Insurance › Article 42 - Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies › 4219 - Limitation on Accumulation of Surplus of Life Insurance Companies.

§  4219.  Limitation  on  accumulation  of  surplus  of life insurance
companies. (a) (1)  Any  domestic  mutual  life  insurance  company  may
maintain  a  surplus, above all of its reserves and liabilities required
or specifically permitted by this chapter, not exceeding the greatest of
(A) eight hundred fifty thousand dollars, or  (B)  ten  percent  of  its
policy reserves and policy liabilities, or (C) ten percent of its policy
reserves  and  policy  liabilities plus (i) the product of three and its
authorized control level RBC as determined in  accordance  with  section
one  thousand  three  hundred  twenty-two of this chapter minus (ii) the
asset valuation reserve as reported in its annual statement, or (D)  the
minimum  amount  of capital and surplus required by law of another state
in which the company is authorized to do business.
(2) Any domestic stock life insurance  company  issuing  participating
policies  only  or  both participating and non-participating policies or
contracts in accordance with subsection (f) of section four thousand two
hundred  thirty-one  of  this  article,  may  maintain  a  participating
policyholders'  surplus,  above  all  of  its  reserves  and liabilities
arising  out  of  participating  policies,  required   or   specifically
permitted  by the provisions of this chapter, not exceeding the greatest
of (A) two hundred fifty thousand dollars, or (B) ten  percent  of  such
policy  reserves and such policy liabilities, or (C) ten percent of such
policy reserves and  policy  liabilities  plus  the  amount  derived  by
prorating,  based  upon  the  ratio  of participating assets to admitted
assets, (i) the product of three and its authorized control level RBC as
determined  in  accordance  with  section  one  thousand  three  hundred
twenty-two  of  this  chapter  minus (ii) the asset valuation reserve as
reported in its annual statement.
(3) In this section, "policy reserves and policy liabilities" includes
reserves  and  liabilities  on  outstanding  life  insurance   policies,
accident  and health insurance policies and annuity contracts, contracts
supplemental thereto or in connection therewith or  provisions  included
therein  insuring  against  disability  or against death by accident and
including liabilities required under optional modes  of  settlement  and
for  dividends  left  on  deposit,  after deducting the net value of its
risks reinsured by other solvent assuming insurers. Policy reserves  and
liabilities  shall  also  include  the  reserves  and liabilities of the
domestic life insurance company and the policy reserves and  liabilities
of  any  and all wholly-owned subsidiary life insurance companies of the
domestic life insurance company, to the extent  that  the  surpluses  of
such  subsidiary life insurance companies are included in the surplus of
the domestic life insurance company  for  purposes  of  determining  the
limit pursuant to this section.
(4) In the case of a mutual life insurance company that is reorganized
into  a  stock life insurance company under section seven thousand three
hundred twelve of this chapter, the limitation  contained  in  paragraph
one  of  this  subsection  shall  not  affect  that part of the existing
surplus of such reorganized company that is allocated  to  participating
policies  and contracts of the mutual life insurance company which is in
excess of such limitation on the effective date of  the  reorganization,
provided such excess, in addition to any further accretions occurring in
the  normal  course of business, shall be equitably distributed to these
participating policyholders and contractholders over  a  period  not  to
exceed ten years.
(b) The superintendent may, for good cause shown, by order, permit any
such  company  to maintain a surplus in excess of the maximum prescribed
by subsection (a) hereof, for a specified period, not exceeding one year
under any one order. The superintendent shall state in  such  order  his

reasons  therefor  and  shall  cause  a statement of such order and such
reasons to be published in his next annual report to the legislature.
(c)  This  section shall not apply to any stock life insurance company
doing exclusively a non-participating business.