2023 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 subsidiary, 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.