STATE OF NEW YORK ________________________________________________________________________ 7095--A 2023-2024 Regular Sessions IN SENATE May 18, 2023 ___________ Introduced by Sen. BRESLIN -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance -- reported favorably from said committee and committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the insurance law, in relation to group capital calcu- lations, liquidity stress tests, and confidentiality The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraphs 1 and 2 of subsection (a) and subsection (b) of 2 section 110 of the insurance law, paragraphs 1 and 2 of subsection (a) 3 as amended by chapter 238 of the laws of 2013 and subsection (b) as 4 added by chapter 687 of the laws of 2003, are amended to read as 5 follows: 6 (1) may share documents, materials or other information, including 7 confidential [and], privileged, and trade secret documents, materials or 8 information with other local, state, federal, and international regula- 9 tory agencies, with the New York Liquidation Bureau, with the National 10 Association of Insurance Commissioners, its affiliates or subsidiaries, 11 [and] with any third-party consultant designated by the superintendent, 12 with local, state, federal, and international law enforcement authori- 13 ties, including members of any supervisory college described in section 14 three hundred two of this chapter, provided that the recipient has the 15 authority and agrees to maintain the confidentiality and privileged 16 status of the document, material or other information and has verified 17 in writing the legal authority to maintain confidentiality; provided, 18 however, that this paragraph shall not be construed as limiting access 19 to records pursuant to article six of the public officers law, except as 20 provided in paragraph three of subsection (b) of this section; 21 (2) may receive documents, materials or information, including other- 22 wise confidential [and], privileged, and trade secret documents, materi- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08515-05-3
S. 7095--A 2 1 als or information, from the New York Liquidation Bureau, from the 2 National Association of Insurance Commissioners, its affiliates or 3 subsidiaries [and], from regulatory and law enforcement officials of 4 other foreign or domestic jurisdictions, including members of any super- 5 visory college described in section three hundred two of this chapter, 6 and from any other entity designated by the superintendent in a regu- 7 lation, and shall maintain as confidential or privileged any document, 8 material or information received with notice or the understanding that 9 it is confidential or privileged under the laws of the jurisdiction that 10 is the source of the document, material or information; and 11 (b) (1) No waiver of any applicable privilege or claim of confiden- 12 tiality in the documents, materials, or information shall occur as a 13 result of disclosure to the superintendent under this section or as a 14 result of sharing as authorized in this section. 15 (2) The sharing of documents, materials, or information by the super- 16 intendent pursuant to this section shall not constitute a delegation of 17 regulatory authority or rulemaking, and the superintendent is solely 18 responsible for the administration, execution, and enforcement of the 19 provisions of this section. 20 (3) Documents, materials, or other information in the possession or 21 control of the National Association of Insurance Commissioners or third- 22 party consultants pursuant to this section shall be confidential by law 23 and privileged, shall not be subject to article six of the public offi- 24 cers law, shall not be subject to subpoena, and shall not be subject to 25 discovery or admissible in evidence in any private civil action. 26 § 2. Subsection (a) of section 1501 of the insurance law is amended by 27 adding four new paragraphs 8, 9, 10 and 11 to read as follows: 28 (8) "Group capital calculation instructions" means the group capital 29 calculation instructions as adopted by the NAIC and as amended by the 30 NAIC from time to time in accordance with the procedures adopted by the 31 NAIC, except where such instructions conflict with the laws of this 32 state and subject to exceptions the superintendent may take in a regu- 33 lation upon a written finding that the exceptions would not be unduly 34 burdensome on the holding company or insurer. 35 (9) "NAIC" means the National Association of Insurance Commissioners. 36 (10) "NAIC liquidity stress test framework" means an NAIC publication 37 that includes a history of the NAIC's development of regulatory liquidi- 38 ty stress testing, the scope criteria applicable for a specific data 39 year, and the liquidity stress test instructions and reporting templates 40 for a specific data year, such scope criteria, instructions and report- 41 ing template being as adopted by the NAIC and as amended by the NAIC 42 from time to time in accordance with the procedures adopted by the NAIC, 43 except where such instructions conflicts with the laws of this state and 44 subject to exceptions the superintendent may take in a regulation upon a 45 written finding that the exceptions would not be unduly burdensome on 46 the holding company or insurer. 47 (11) "Scope criteria" means the designated exposure bases along with 48 minimum magnitudes thereof for the specified data year, used to estab- 49 lish a preliminary list of insurers considered scoped into the NAIC 50 liquidity stress test framework for that data year. 51 § 3. Section 1503 of the insurance law is amended by adding three new 52 subsections (c), (d) and (e) to read as follows: 53 (c) (1) An ultimate holding company shall file with the superintendent 54 an annual group capital calculation by June thirtieth of each year when 55 this state is the lead state of the holding company system as determined 56 in accordance with the procedures within the financial analysis handbook
S. 7095--A 3 1 adopted by the NAIC, as amended from time to time. When the lead state 2 is not this state, an ultimate holding company shall file with the 3 superintendent the annual group capital calculation as adopted by its 4 lead state if the ultimate holding company has filed the annual group 5 capital calculation with the lead state but the lead state is not will- 6 ing or able to share the annual group capital calculation with the 7 superintendent. 8 (2) When this state is the lead state, the ultimate holding company 9 shall complete the annual group capital calculation in accordance with 10 the group capital calculation instructions, which may permit the super- 11 intendent to allow a holding company that is not the ultimate holding 12 company to file the annual group capital calculation. 13 (3) When this state is the lead state, an ultimate holding company 14 shall be exempt from filing an annual group capital calculation if it is 15 part of a holding company system that: 16 (A) has only one insurer within its system that only writes business 17 and is only licensed in its domestic state and assumes no business from 18 any other insurer; 19 (B) is required to perform a group capital calculation specified by 20 the United States Federal Reserve Board, except that the holding company 21 shall not be exempt if the superintendent requests the group capital 22 calculation from the United States Federal Reserve Board under the terms 23 of information sharing agreements in effect and the Federal Reserve 24 Board cannot share the calculation with the superintendent; 25 (C) has a non-United States group-wide supervisor that is located 26 within a reciprocal jurisdiction, as described in part one hundred twen- 27 ty-five of title eleven of the official compilation of codes, rules and 28 regulations of this state, that recognizes the United States state regu- 29 latory approach to group supervision and group capital; or 30 (D)(i) provides information to the superintendent, either directly or 31 indirectly through the group-wide supervisor, who has determined such 32 information is satisfactory to allow the superintendent to comply with 33 the NAIC group supervision approach, as detailed in the NAIC financial 34 analysis handbook; and 35 (ii) has a non-United States group-wide supervisor that is not in a 36 reciprocal jurisdiction that recognizes and accepts, as specified by the 37 superintendent in a regulation, the group capital calculation as the 38 world-wide group capital assessment for United States holding company 39 systems that operate in that jurisdiction. 40 (4) Notwithstanding subparagraphs (C) and (D) of paragraph three of 41 this subsection, when this state is the lead state, the superintendent 42 shall require the group capital calculation for United States operations 43 of any non-United States-based holding company system where, after any 44 necessary consultation with other supervisors or officials, it is deemed 45 appropriate by the superintendent for prudential oversight and solvency 46 monitoring purposes or for ensuring the competitiveness of the insurance 47 marketplace. 48 (5) Notwithstanding the exemptions from filing the group capital 49 calculation set forth in paragraph three of this subsection, when this 50 state is the lead state, the superintendent has the discretion to exempt 51 a holding company from filing an annual group capital calculation or 52 accept a limited group capital calculation filing or report in accord- 53 ance with criteria as specified by the superintendent in a regulation. 54 (6) When this state is the lead state, if the superintendent deter- 55 mines that a holding company no longer meets one or more of the require- 56 ments for an exemption from filing the group capital calculation under
S. 7095--A 4 1 this subsection, the holding company shall file the group capital calcu- 2 lation at the next annual filing date unless given an extension by the 3 superintendent based on reasonable grounds shown. 4 (d)(1) An ultimate holding company that directly or indirectly 5 controls an insurer subject to registration and that is scoped into the 6 NAIC liquidity stress test framework shall file the results of a specif- 7 ic year's annual liquidity stress test with the superintendent when this 8 state is the lead state of the holding company system as determined by 9 the procedures within the financial analysis handbook adopted by the 10 NAIC and as amended from time to time. 11 (2) When the lead state is not this state, an ultimate holding company 12 shall file with the superintendent the results of a specific year's 13 liquidity stress test as adopted by its lead state if the ultimate hold- 14 ing company has filed the results with the lead state but the lead state 15 is not willing or able to share the results with the superintendent. 16 (3) When this state is the lead state, the performance of, and filing 17 of the results from, a specific year's liquidity stress test shall 18 comply with the NAIC liquidity stress test framework. 19 (4) When this state is the lead state, any change to the NAIC liquidi- 20 ty stress test framework or to the data year for which the scope crite- 21 ria are to be measured shall be effective on January first of the year 22 following the calendar year when such changes are adopted. 23 (5) When this state is the lead state, an insurer meeting at least one 24 threshold of the scope criteria shall be considered scoped into the NAIC 25 liquidity stress test framework for the specified data year unless the 26 superintendent, in consultation with the NAIC financial stability task 27 force, or its successor, determines the insurer shall not be scoped into 28 the NAIC liquidity stress test framework for that data year. 29 (6) When this state is the lead state, an insurer that does not trig- 30 ger at least one threshold of the scope criteria shall be considered 31 scoped out of the NAIC liquidity stress test framework for the specified 32 data year, unless the superintendent, in consultation with the NAIC 33 financial stability task force, or its successor, determines the insurer 34 shall be scoped into the NAIC liquidity stress test framework for that 35 data year. 36 (7) The superintendent, in consultation with the NAIC financial 37 stability task force, or its successor, shall assess the concern of 38 wishing to avoid having insurers scoped in and out of the NAIC liquidity 39 stress test framework on a frequent basis as part of the determination 40 for an insurer. 41 (e) No insurer, insurance producer, or other person shall make, 42 publish, disseminate, circulate, issue, or place before the public, or 43 cause directly or indirectly to be made, published, disseminated, circu- 44 lated, issued, or placed before the public, in this state, in any news- 45 paper, magazine, or other publication, or in the form of a notice, 46 circular, pamphlet, letter, or poster, or over any radio or television 47 station or any electronic means of communication available to the 48 public, or in any other way as an advertisement, announcement, or state- 49 ment containing a representation or statement with regard to the group 50 capital calculation, group capital ratio, liquidity stress test results, 51 or supporting disclosures for such test, or any component derived in the 52 calculation thereof, of any insurer or holding company system, provided, 53 however, that an insurer may publish, with the superintendent's prior 54 approval, an announcement in a written publication to rebut any mate- 55 rially false statement with respect to the foregoing if the insurer is 56 able to demonstrate to the superintendent with substantial proof the
S. 7095--A 5 1 falsity of such statement or inappropriateness, as the case may be, and 2 if the sole purpose of the announcement is to rebut the materially false 3 statement. 4 § 4. Subsection (c) of section 1504 of the insurance law, as amended 5 by chapter 238 of the laws of 2013, is amended to read as follows: 6 (c) (1) The [superintendent shall keep the] contents of each report 7 and filing made pursuant to this article and any information obtained in 8 connection therewith shall be confidential and proprietary and shall not 9 be subject to subpoena or discovery or admissible in evidence in any 10 private civil action, and the superintendent shall not make the same 11 public without the prior written consent of the controlled insurer to 12 which it pertains unless the superintendent, after notice and an oppor- 13 tunity to be heard, shall determine that the interests of policyholders, 14 shareholders or the public will be served by the publication thereof. In 15 any action or proceeding by the superintendent against the person exam- 16 ined or any other person within the same holding company system a report 17 of such examination published by the superintendent shall be admissible 18 as evidence of the facts stated therein. 19 (2) Neither the superintendent nor any person who received a report or 20 filing made pursuant to this article and any information obtained in 21 connection therewith, through examination or otherwise, while acting 22 under the authority of the superintendent or with whom such report, 23 filing, or information are shared pursuant to this chapter, shall be 24 permitted or required to testify in any private civil action concerning 25 the report, filing, or information. 26 § 5. Subsection (f) of section 1506 of the insurance law, as added by 27 chapter 238 of the laws of 2013, is amended to read as follows: 28 (f) Any holding company seeking to divest its controlling interest in 29 a domestic insurer, in any manner, shall file with the superintendent, 30 with a copy to the insurer, notice of its proposed divestiture at least 31 thirty days prior to the cessation of control, provided, however that 32 this subsection shall not apply if notice is provided as required by 33 subsection (a) of this section. 34 § 6. The insurance law is amended by adding a new section 1511 to read 35 as follows: 36 § 1511. Expenses for group-wide supervision. A controlled insurer 37 shall be liable for and shall pay the reasonable expenses of the super- 38 intendent's participation in the administration of group-wide super- 39 vision of internationally active insurance groups, including the engage- 40 ment of attorneys, actuaries, and any other professionals and all 41 reasonable travel expenses. 42 § 7. Subsection (d) of section 1603 of the insurance law, as added by 43 chapter 238 of the laws of 2013, is amended to read as follows: 44 (d) Any domestic insurer seeking to divest its controlling interest in 45 another domestic insurer, in any manner, shall file with the superinten- 46 dent, with a copy to the insurer, notice of its proposed divestiture at 47 least thirty days prior to the cessation of control, provided, however 48 that this subsection shall not apply if notice is provided as required 49 by subsection (a) of this section. 50 § 8. Section 1604 of the insurance law is amended by adding four new 51 subsections (c), (d), (e) and (f) to read as follows: 52 (c) (1) An authorized domestic insurer, other than a domestic insurer 53 required to register as a controlled insurer pursuant to section one 54 thousand five hundred three of this chapter, shall file with the super- 55 intendent an annual group capital calculation by June thirtieth of each 56 year when this state is the lead state as determined in accordance with
S. 7095--A 6 1 the procedures within the financial analysis handbook adopted by the 2 NAIC, as amended from time to time. 3 (2) When the lead state is not this state, an authorized domestic 4 insurer shall file with the superintendent the annual group capital 5 calculation as adopted by its lead state if the authorized domestic 6 insurer has filed the annual group capital calculation with the lead 7 state but the lead state is not willing or able to share the annual 8 group capital calculation with the superintendent. 9 (3) When this state is the lead state, the authorized domestic insurer 10 shall complete the annual group capital calculation in accordance with 11 the group capital calculation instructions, which may permit the super- 12 intendent to allow a subsidiary to file the annual group capital calcu- 13 lation. 14 (4) When this state is the lead state, an authorized domestic insurer 15 shall be exempt from filing an annual group capital calculation if it: 16 (A) has only one insurer subsidiary that only writes business and is 17 only licensed in its domestic state and assumes no business from any 18 other insurer; 19 (B) is required to perform a group capital calculation specified by 20 the United States Federal Reserve Board, except that the authorized 21 domestic insurer shall not be exempt if the superintendent requests the 22 group capital calculation from the United States Federal Reserve Board 23 under the terms of information sharing agreements in effect and the 24 Federal Reserve Board cannot share the calculation with the superinten- 25 dent; 26 (C) has a non-United States group-wide supervisor that is located 27 within a reciprocal jurisdiction, as described in part one hundred twen- 28 ty-five of title eleven of the official compilation of codes, rules and 29 regulations of this state, that recognizes the United States state regu- 30 latory approach to group supervision and group capital; or 31 (D)(i) provides information to the superintendent, either directly or 32 indirectly through the group-wide supervisor, who has determined such 33 information is satisfactory to allow the superintendent to comply with 34 the NAIC group supervision approach, as detailed in the NAIC financial 35 analysis handbook; and 36 (ii) has a non-United States group-wide supervisor that is not in a 37 reciprocal jurisdiction and that recognizes and accepts, as specified by 38 the superintendent in a regulation, the group capital calculation as the 39 world-wide group capital assessment for United States systems that oper- 40 ate in that jurisdiction. 41 (5) Notwithstanding subparagraphs (C) and (D) of paragraph four of 42 this subsection, when this state is the lead state, the superintendent 43 shall require the group capital calculation for United States operations 44 of any non-United States-based system where, after any necessary consul- 45 tation with other supervisors or officials, it is deemed appropriate by 46 the superintendent for prudential oversight and solvency monitoring 47 purposes or for ensuring the competitiveness of the insurance market- 48 place. 49 (6) Notwithstanding the exemptions from filing the group capital 50 calculation set forth in paragraph four of this subsection, when this 51 state is the lead state, the superintendent has the discretion to exempt 52 an authorized domestic insurer from filing an annual group capital 53 calculation or accept a limited annual group capital calculation filing 54 or report in accordance with criteria as specified by the superintendent 55 in a regulation.
S. 7095--A 7 1 (7) When this state is the lead state, if the superintendent deter- 2 mines that an authorized domestic insurer no longer meets one or more of 3 the requirements for an exemption from filing the group capital calcu- 4 lation under this subsection, the authorized domestic insurer shall file 5 the group capital calculation at the next annual filing date unless 6 given an extension by the superintendent based on reasonable grounds 7 shown. 8 (d)(1) An authorized domestic insurer, other than a domestic insurer 9 required to register as a controlled insurer pursuant to section one 10 thousand five hundred three of this chapter, that has a subsidiary that 11 is scoped into the NAIC liquidity stress test framework shall file the 12 results of a specific year's annual liquidity stress test with the 13 superintendent when this state is the lead state as determined by the 14 procedures within the financial analysis handbook adopted by the NAIC 15 and as amended from time to time. 16 (2) When the lead state is not this state, an authorized domestic 17 insurer shall file with the superintendent the results of a specific 18 year's liquidity stress test as adopted by its lead state if the author- 19 ized domestic insurer has filed the results with the lead state but the 20 lead state is not willing or able to share the results with the super- 21 intendent. 22 (3) When this state is the lead state, the performance of, and filing 23 of the results from, a specific year's liquidity stress test shall 24 comply with the NAIC liquidity stress test framework. 25 (4) When this state is the lead state, any change to the NAIC liquidi- 26 ty stress test framework or to the data year for which the scope crite- 27 ria are to be measured shall be effective on January first of the year 28 following the calendar year when such changes are adopted. 29 (5) When this state is the lead state, an insurer meeting at least one 30 threshold of the scope criteria shall be considered scoped into the NAIC 31 liquidity stress test framework for the specified data year unless the 32 superintendent, in consultation with the NAIC financial stability task 33 force, or its successor, determines the insurer shall not be scoped into 34 the NAIC liquidity stress test framework for that data year. 35 (6) When this state is the lead state, an insurer that does not trig- 36 ger at least one threshold of the scope criteria shall be considered 37 scoped out of the NAIC liquidity stress test framework for the specified 38 data year, unless the superintendent, in consultation with the NAIC 39 financial stability task force, or its successor, determines the insurer 40 shall be scoped into the NAIC liquidity stress test framework for that 41 data year. 42 (7) The superintendent, in consultation with the NAIC financial 43 stability task force, or its successor, shall assess the concern of 44 wishing to avoid having insurers scoped in and out of the NAIC liquidity 45 stress test framework on a frequent basis as part of the determination 46 for an insurer. 47 (e) No insurer, insurance producer, or other person shall make, 48 publish, disseminate, circulate, issue, or place before the public, or 49 cause directly or indirectly to be made, published, disseminated, circu- 50 lated, issued, or placed before the public, in this state, in a newspa- 51 per, magazine, or other publication, or in the form of a notice, circu- 52 lar, pamphlet, letter, or poster, or over any radio or television 53 station or any electronic means of communication available to the 54 public, or in any other way as an advertisement, announcement, or state- 55 ment containing a representation or statement with regard to the group 56 capital calculation, group capital ratio, liquidity stress test results,
S. 7095--A 8 1 or supporting disclosures for such test, or any component derived in the 2 calculation thereof, of any authorized domestic insurer or subsidiary 3 thereof, provided, however, that an insurer may publish, with the super- 4 intendent's prior approval, announcements in a written publication to 5 rebut any materially false statement with respect to the foregoing if 6 the insurer is able to demonstrate to the superintendent with substan- 7 tial proof the falsity of such statement or the inappropriateness, as 8 the case may be, and if the sole purpose of the announcement is to rebut 9 the materially false statement. 10 (f) For the purpose of this section: 11 (1) "Group capital calculation instructions" means the group capital 12 calculation instructions as adopted by the NAIC and as amended by the 13 NAIC from time to time in accordance with the procedures adopted by the 14 NAIC, except where such instructions conflict with the laws of this 15 state and subject to exceptions the superintendent may take in a regu- 16 lation upon a written finding that the exceptions would not be unduly 17 burdensome on the domestic insurer or subsidiary. 18 (2) "NAIC" means the National Association of Insurance Commissioners. 19 (3) "NAIC liquidity stress test framework" means an NAIC publication 20 that includes a history of the NAIC's development of regulatory liquidi- 21 ty stress testing, the scope criteria applicable for a specific data 22 year, and the liquidity stress test instructions and reporting templates 23 for a specific data year, such scope criteria, instructions and report- 24 ing template being as adopted by the NAIC and as amended by the NAIC 25 from time to time in accordance with the procedures adopted by the NAIC, 26 except where such publication conflicts with the laws of this state and 27 subject to exceptions the superintendent may take in a regulation upon a 28 written finding that the exceptions would not be unduly burdensome on 29 the domestic insurer or subsidiary. 30 (4) "Scope criteria" means the designated exposure bases along with 31 minimum magnitudes thereof for the specified data year, used to estab- 32 lish a preliminary list of insurers considered scoped into the NAIC 33 liquidity stress test framework for that data year. 34 § 9. The insurance law is amended by adding two new sections 1613 and 35 1614 to read as follows: 36 § 1613. Expenses for group-wide supervision. An authorized domestic 37 insurer shall be liable for and shall pay the reasonable expenses of the 38 superintendent's participation in the administration of group-wide 39 supervision of internationally active insurance groups, including the 40 engagement of attorneys, actuaries, and any other professionals and all 41 reasonable travel expenses. 42 § 1614. Confidentiality of reports and filings. The contents of each 43 report and filing submitted pursuant to this article and information 44 pertaining thereto shall be kept confidential, shall not be subject to 45 subpoena or discovery, shall not be admissible in evidence in any 46 private civil action, and shall not be made public unless, after notice 47 and opportunity to be heard, the superintendent determines that the 48 interests of policyholders, subscribers, stockholders or the public will 49 be served by the publication thereof. Neither the superintendent nor any 50 person who received a report or filing submitted pursuant to this arti- 51 cle and information pertaining thereto, through examination or other- 52 wise, while acting under the authority of the superintendent or with 53 whom such report or information are shared pursuant to this chapter, 54 shall be permitted or required to testify in any private civil action 55 concerning the report, filing, or information.
S. 7095--A 9 1 § 10. The section heading of section 1702 of the insurance law, as 2 amended by chapter 238 of the laws of 2013, is amended to read as 3 follows: 4 [Meaning of "subsidiary", "parent corporation" and "enterprise risk"; 5 certain types of subsidiaries defined] Definitions. 6 § 11. Section 1702 of the insurance law is amended by adding four new 7 subsections (g), (h), (i) and (j) to read as follows: 8 (g) "Group capital calculation instructions" means the group capital 9 calculation instructions as adopted by the NAIC and as amended by the 10 NAIC from time to time in accordance with the procedures adopted by the 11 NAIC, except where such instructions conflict with the laws of this 12 state and subject to exceptions the superintendent may take in a regu- 13 lation upon a written finding that the exceptions would not be unduly 14 burdensome on the parent corporation or subsidiary. 15 (h) "NAIC" means the National Association of Insurance Commissioners. 16 (i) "NAIC liquidity stress test framework" means an NAIC publication 17 that includes a history of the NAIC's development of regulatory liquidi- 18 ty stress testing, the scope criteria applicable for a specific data 19 year, and the liquidity stress test instructions and reporting templates 20 for a specific data year, such scope criteria, instructions and report- 21 ing template being as adopted by the NAIC and as amended by the NAIC 22 from time to time in accordance with the procedures adopted by the NAIC, 23 except where such instructions conflict with the laws of this state and 24 subject to exceptions the superintendent may take in a regulation upon a 25 written finding that the exceptions would not be unduly burdensome on 26 the parent corporation or subsidiary. 27 (j) "Scope criteria" means the designated exposure bases along with 28 minimum magnitudes thereof for the specified data year, used to estab- 29 lish a preliminary list of insurers considered scoped into the NAIC 30 liquidity stress test framework for that data year. 31 § 12. Section 1709 of the insurance law, as amended by chapter 381 of 32 the laws of 1986, is amended to read as follows: 33 § 1709. Confidentiality of [information] reports and filings. The 34 contents of each [information] report [filed hereunder] and filing 35 submitted pursuant to this article and information pertaining thereto 36 shall be kept confidential, shall not be subject to subpoena or discov- 37 ery, shall not be admissible in evidence in any private civil action, 38 and shall not be made public unless, after notice and opportunity to be 39 heard, the superintendent determines that the interests of policyhold- 40 ers, subscribers, stockholders or the public will be served by the 41 publication thereof. The provisions of this section shall not be appli- 42 cable to any [information] report [filed hereunder] or filing submitted 43 pursuant to this article and any information pertaining thereto, if the 44 parent corporation is a corporation subject to article forty-three of 45 this chapter. Neither the superintendent nor any person who received a 46 report or filing submitted pursuant to this article and information 47 pertaining thereto, through examination or otherwise, while acting under 48 the authority of the superintendent or with whom such report or informa- 49 tion are shared pursuant to this chapter, shall be permitted or required 50 to testify in any private civil action concerning the report, filing, or 51 information. 52 § 13. Subsection (a) of section 1710 of the insurance law, as added by 53 chapter 238 of the laws of 2013, is amended to read as follows: 54 (a) Any parent corporation seeking to divest its controlling interest 55 in a domestic insurer, in any manner, shall file with the superinten- 56 dent, with a copy to the insurer, notice of its proposed divestiture at
S. 7095--A 10 1 least thirty days prior to the cessation of control, provided, however 2 that this subsection shall not apply if notice is provided as required 3 by subsection (b) of section one thousand seven hundred one of this 4 article. 5 § 14. The opening paragraph of paragraph 1 of subsection (b) of 6 section 1712 of the insurance law, as added by chapter 238 of the laws 7 of 2013, is amended to read as follows: 8 sales, purchases, exchanges, loans, extensions of credit, or invest- 9 ments with a [subsidy] subsidiary, provided the transactions are equal 10 to or exceed: 11 § 15. Section 1717 of the insurance law is amended by adding three new 12 subsections (c), (d) and (e) to read as follows: 13 (c) (1) A parent corporation, other than a parent corporation required 14 to register as a controlled insurer pursuant to section one thousand 15 five hundred three of this chapter, shall file with the superintendent 16 an annual group capital calculation by June thirtieth of each year when 17 this state is the lead state as determined in accordance with the proce- 18 dures within the financial analysis handbook adopted by the NAIC, as 19 amended from time to time. 20 (2) When the lead state is not this state, a parent corporation shall 21 file with the superintendent the annual group capital calculation as 22 adopted by its lead state if the parent corporation has filed the annual 23 group capital calculation with the lead state but the lead state is not 24 willing or able to share the annual group capital calculation with the 25 superintendent. 26 (3) When this state is the lead state, the parent corporation shall 27 complete the annual group capital calculation in accordance with the 28 group capital calculation instructions, which may permit the superinten- 29 dent to allow a subsidiary to file the annual group capital calculation. 30 (4) When this state is the lead state, a parent corporation shall be 31 exempt from filing an annual group capital calculation if it: 32 (A) has only one insurer subsidiary that only writes business and is 33 only licensed in its domestic state and assumes no business from any 34 other insurer; 35 (B) is required to perform a group capital calculation specified by 36 the United States Federal Reserve Board, except that the parent corpo- 37 ration shall not be exempt if the superintendent requests the group 38 capital calculation from the United States Federal Reserve Board under 39 the terms of information sharing agreements in effect and the Federal 40 Reserve Board cannot share the calculation with the superintendent; 41 (C) has a non-United States group-wide supervisor that is located 42 within a reciprocal jurisdiction, as described in part one hundred twen- 43 ty-five of title eleven of the official compilation of codes, rules and 44 regulations of this state, that recognizes the United States state regu- 45 latory approach to group supervision and group capital; or 46 (D)(i) provides information to the superintendent, either directly or 47 indirectly through the group-wide supervisor, who has determined such 48 information is satisfactory to allow the superintendent to comply with 49 the NAIC group supervision approach, as detailed in the NAIC financial 50 analysis handbook; and 51 (ii) has a non-United States group-wide supervisor that is not in a 52 reciprocal jurisdiction that recognizes and accepts, as specified by the 53 superintendent in a regulation, the group capital calculation as the 54 world-wide group capital assessment for United States systems that oper- 55 ate in that jurisdiction.
S. 7095--A 11 1 (5) Notwithstanding subparagraphs (C) and (D) of paragraph four of 2 this subsection, when this state is the lead state, the superintendent 3 shall require the group capital calculation for United States operations 4 of any non-United States-based system where, after any necessary consul- 5 tation with other supervisors or officials, it is deemed appropriate by 6 the superintendent for prudential oversight and solvency monitoring 7 purposes or for ensuring the competitiveness of the insurance market- 8 place. 9 (6) Notwithstanding the exemptions from filing the group capital 10 calculation set forth in paragraph four of this subsection, when this 11 state is the lead state, the superintendent has the discretion to exempt 12 a parent corporation from filing an annual group capital calculation 13 or accept a limited annual group capital calculation filing or report in 14 accordance with criteria as specified by the superintendent in a regu- 15 lation. 16 (7) When this state is the lead state, if the superintendent deter- 17 mines that a parent corporation no longer meets one or more of the 18 requirements for an exemption from filing the group capital calculation 19 under this subsection, the parent corporation shall file the group capi- 20 tal calculation at the next annual filing date unless given an extension 21 by the superintendent based on reasonable grounds shown. 22 (d)(1) A parent corporation, other than a parent corporation required 23 to register as a controlled insurer pursuant to section one thousand 24 five hundred three of this chapter, that has a subsidiary that is scoped 25 into the NAIC liquidity stress test framework shall file the results of 26 a specific year's liquidity stress test with the superintendent when 27 this state is the lead state as determined by the procedures within the 28 financial analysis handbook adopted by the NAIC and as amended from time 29 to time. 30 (2) When the lead state is not this state, a parent corporation shall 31 file with the superintendent the results of a specific year's liquidity 32 stress test as adopted by its lead state if the parent corporation has 33 filed the results with the lead state but the lead state is not willing 34 or able to share the results with the superintendent. 35 (3) When this state is the lead state, the performance of, and filing 36 of the results from, a specific year's liquidity stress test shall 37 comply with the NAIC liquidity stress test framework. 38 (4) When the lead state is this state, any change to the NAIC liquidi- 39 ty stress test framework or to the data year for which the scope crite- 40 ria are to be measured shall be effective on January first of the year 41 following the calendar year when such changes are adopted. 42 (5) When this state is the lead state, an insurer meeting at least one 43 threshold of the scope criteria shall be considered scoped into the NAIC 44 liquidity stress test framework for the specified data year unless the 45 superintendent, in consultation with the NAIC financial stability task 46 force, or its successor, determines the insurer shall not be scoped into 47 the NAIC liquidity stress test framework for that data year. 48 (6) When this state is the lead state, an insurer that does not trig- 49 ger at least one threshold of the scope criteria shall be considered 50 scoped out of the NAIC liquidity stress test framework for the specified 51 data year, unless the superintendent, in consultation with the NAIC 52 financial stability task force, or its successor, determines the insurer 53 shall be scoped into the NAIC liquidity stress test framework for that 54 data year. 55 (7) The superintendent, in consultation with the NAIC financial 56 stability task force, or its successor, shall assess the concern of
S. 7095--A 12 1 wishing to avoid having insurers scoped in and out of the NAIC liquidity 2 stress test framework on a frequent basis as part of the determination 3 for an insurer. 4 (e) No insurer, insurance producer, or other person shall make, 5 publish, disseminate, circulate, issue, or place before the public, or 6 cause directly or indirectly to be made, published, disseminated, circu- 7 lated, issued, or placed before the public, in this state, in a newspa- 8 per, magazine, or other publication, or in the form of a notice, circu- 9 lar, pamphlet, letter, or poster, or over any radio or television 10 station or any electronic means of communication available to the 11 public, or in any other way as an advertisement, announcement, or state- 12 ment containing a representation or statement with regard to the group 13 capital calculation, group capital ratio, liquidity stress test 14 results or supporting disclosures for such test, or any component 15 derived in the calculation thereof, of any parent corporation or 16 subsidiary thereof, provided, however, that a parent corporation may 17 publish, with the superintendent's prior approval, announcements in a 18 written publication to rebut any materially false statement with respect 19 to the foregoing if the insurer is able to demonstrate to the super- 20 intendent with substantial proof the falsity of such statement or the 21 inappropriateness, as the case may be, and if the sole purpose of the 22 announcement is to rebut the materially false statement. 23 § 16. The insurance law is amended by adding a new section 1718 to 24 read as follows: 25 § 1718. Expenses for group-wide supervision. A parent corporation 26 shall be liable for and shall pay the reasonable expenses of the super- 27 intendent's participation in the administration of group-wide super- 28 vision of internationally active insurance groups, including the engage- 29 ment of attorneys, actuaries, and any other professionals and all 30 reasonable travel expenses. 31 § 17. This act shall take effect immediately.