2023 New York Laws › ISC - Insurance › Article 77 - The Life and Health Insurance Company Guaranty Corporation of New York Act › 7709 - Assessments.

§  7709.  Assessments.  (a)  For  the  purpose  of providing the funds
necessary to carry out the powers and duties  of  the  corporation,  the
board of directors shall assess the member insurers, separately for each
account,  at such time and for such amounts as the board finds necessary
in accordance with the provisions of paragraph three of  subsection  (c)
of  this  section. Assessments shall be due on the date set by the board
which shall be not less than thirty days nor more than sixty days  after
prior  written  notice  to the member insurers. Assessments shall accrue
interest at the maximum rate allowed by subdivision one of section 5-501
of the general obligations law on and after the due date.
(b) There shall be three classes of assessments, as follows:
(1) Class A assessments shall be  made  for  the  purpose  of  meeting
administrative costs and other general expenses.
(2) Class B assessments shall be made to the extent necessary to carry
out  the  powers  and  duties  of  the  corporation  under section seven
thousand seven hundred eight of this article with regard to an  impaired
or insolvent domestic insurer.
(3) Class C assessments shall be made to the extent necessary to carry
out  the  powers  and  duties  of  the  corporation  under section seven
thousand seven hundred eight of this article with regard to an  impaired
or insolvent foreign or alien insurer.
(c)  (1)  The  amount of any class A assessment shall be determined by
the board and may be made on a non pro rata basis. Such assessment shall
be credited against future impairment  or  insolvency  assessments.  The
maximum  such assessment against any member insurer in any calendar year
shall be determined, in accordance with the table set  forth  below,  on
the  basis  of  its  admitted  assets  as  shown on its annual statement
required by this chapter for the year next preceding the  date  of  such
assessment:
 
Companies with Admitted Assets of                   Maximum Assessment
Up to $50,000,000                                           $200
$50,000,000 to $1,000,000,000                              $1000
$1,000,000,000 or more                                     $2000
(2)  The  amount  of  any  class  B  or class C assessment, except for
assessments related to long-term care insurance, shall be allocated  for
assessment  purposes  among  the  accounts  in  the  proportion that the
premiums received by the impaired or insolvent insurer on  the  policies
or  contracts  covered  by  each  account  for  the  last  calendar year
preceding the assessment in which  the  impaired  or  insolvent  insurer
received  premiums  bears  to  the premiums received by such insurer for
such calendar year on all covered policies. The amount of any class B or
class C assessment for long-term care insurance written by the  impaired
or  insolvent  insurer  shall  be  allocated  according to a methodology
included in the plan of operation and approved  by  the  superintendent.
The  methodology shall provide for fifty percent of the assessment to be
allocated to health insurance company member insurers and fifty  percent
to  be  allocated  to  life insurance company member insurers; provided,
however, that a property/casualty insurer that writes  health  insurance
shall  be considered a health insurance company member for this purpose.
Class B and class C assessments against member insurers for each account
shall be in the proportion that the premiums  received  on  business  in
this  state  by each assessed member insurer on policies covered by each
account for the three calendar years preceding the assessment  bears  to
such premiums received on business in this state for such calendar years
by all assessed member insurers. Class B and Class C assessments against
member  insurers  for  the  health  insurance  account  shall be further

reduced for not-for-profit member insurers  pursuant  to  a  methodology
included  in  the  plan of operation and approved by the superintendent.
Such methodology shall reduce the assessments imposed on  not-for-profit
member  insurers  in  an  amount  that,  when accounting for appropriate
factors, including the value of the tax credits and  a  factor  for  the
time  value  of  money,  results  in  a percentage of net assessments to
premiums that is  equivalent  for  not-for-profit  member  insurers  and
for-profit member insurers.
(3)  Assessments for funds to meet the requirements of the corporation
with respect to an impaired or insolvent insurer shall be made within  a
reasonable   time  after  deemed  necessary  by  the  superintendent  to
implement the purposes of this  article.  Classification  of  assessment
under  subsection  (b)  of  this  section and computation of assessments
under this  subsection  shall  be  made  with  a  reasonable  degree  of
accuracy,  recognizing  that  exact  determinations  may  not  always be
possible.
(d) The corporation may abate or defer,  in  whole  or  in  part,  the
assessment  of a member insurer if, in the opinion of the board, payment
of the assessment would endanger the ability of the  member  insurer  to
fulfill  its contractual obligations. In the event an assessment against
a member insurer is abated, or deferred in whole or in part, the  amount
by  which  such assessment is abated or deferred may be assessed against
the other member insurers in a manner  consistent  with  the  basis  for
assessments set forth in this section.
(e)  (1)  With  respect to a member insurer that is a domestic insurer
and is subject to an order of rehabilitation under article  seventy-four
of  this  chapter  as  of  March  first,  two thousand twelve, the total
assessment against all member insurers for impairments and insolvencies,
less the amount of refunds (not including interest) to  member  insurers
pursuant  to  subsection  (f)  of  this  section,  shall be five hundred
fifty-eight million dollars; provided, however, that such  five  hundred
fifty-eight  million  dollar  total  shall be subject to reduction in an
amount, if any, determined by the superintendent, on a date not  earlier
than  twelve  months  after  the  entry  of an order of liquidation with
respect to such domestic insurer, to be not needed for  the  corporation
to  be able to pay its obligations and reasonable expenses in connection
with the liquidation of such domestic insurer, but  in  no  event  shall
such reduction exceed fifty-eight million dollars.
(2)  The  total  of  all  assessments  upon  a member insurer for each
account shall not in any one calendar year exceed two  percent  of  such
insurer's  premiums  received  in  this  state  during the calendar year
preceding the assessment on the policies covered by the account. If  the
maximum assessment, together with the other assets of the corporation in
either  account,  does  not provide in any one year in either account an
amount sufficient to carry out the responsibilities of the  corporation,
the  necessary  additional funds shall be assessed as soon thereafter as
permitted by this article.
(f) The board may, by an equitable method as established in  the  plan
of  operation,  refund to member insurers, by retirement of certificates
of contribution in proportion to the contribution  of  each  insurer  to
that  account,  the amount by which the assets of the account exceed the
amount the board finds necessary to carry out during the coming year the
obligations of the corporation with regard to  that  account,  including
assets  accruing  from  net  realized  capital  gains  and  income  from
investments. A reasonable amount may  be  retained  in  any  account  to
provide  funds  for  the  continuing expenses of the corporation and for
future losses if refunds are impractical.
(g) It shall be proper for any  member  insurer,  in  determining  its
premium  rates  and  policy  owner dividends as to any kind of insurance
within the scope of this article,  to  consider  the  amount  reasonably
necessary  to  meet  its  assessment obligations under this article with
respect to insurers which have become impaired or insolvent.
(h)  The  corporation shall issue to each insurer paying an assessment
under this article, other than a class A assessment,  a  certificate  of
contribution, in a form prescribed by the superintendent, for the amount
of  the  assessment  so  paid.  All outstanding certificates shall be of
equal dignity and priority irrespective of amounts or dates of issue.  A
certificate of contribution may be shown by the insurer in its financial
statement as an asset in such form and for  such  amount,  if  any,  and
period of time as the superintendent may approve.