§ 1301 — Admitted assets

§ 1301. Admitted assets. (a) In determining the financial condition of\na domestic or foreign insurer or the United States branch of an alien\ninsurer for the purposes of this chapter, there may be allowed as\nadmitted assets of such insurer, unless otherwise specifically provided\nin this chapter, only the following assets owned by such insurer\n (1) Cash, including legal tender or the equivalent in any office of\nsuch insurer or in transit under its control and the true balance of any\ndeposit in a solvent bank, trust company or thrift institution.\n (2) Investments acquired or held in accordance with the applicable\nprovisions of this chapter, and the income due or accrued thereon\nsubject to paragraphs three and four of this subsection as to dividends,\ninterest, rents and accrued taxes paid.\n (3) Declared and unpaid dividends on shares, unless the amount has\notherwise been allowed as an admitted asset.\n (4) Investment income due and accrued. Such amounts shall be assessed\nfor collectibility. If it is probable that the investment income due and\naccrued balance is uncollectible, the amount shall be written off and\nshall be charged against investment income in the period such\ndetermination is made. Any remaining investment income due and accrued\n(i.e., amounts considered probable of collection) representing either\n(i) amounts that are over ninety days past due (generated by any\ninvested asset except mortgage loans in default), or (ii) amounts\notherwise designated as nonadmitted shall be considered nonadmitted. If\na mortgage loan in default has interest one hundred eighty days past due\nthat has been assessed as collectible, all interest shall be considered\na nonadmitted asset. Such nonadmitted amounts shall be subject to\ncontinuing assessments of collectibility and, if determined to be\nuncollectible, a write-off shall be recorded in the period such\ndetermination is made. For purposes of this paragraph, "probable" shall\nmean that the future event or events are likely to occur.\n (5) Premium notes, policy loans and other policy assets and liens on\npolicies, contracts or certificates of a life insurance company or\nfraternal benefit society, in an amount not exceeding the legal reserve\nand other policy liabilities carried on each individual contract; the\nnet amount of uncollected and deferred premiums, considerations or\nassessments of a life insurance company or of a fraternal benefit\nsociety which carries the full mean tabular reserve liability; for a\nfraternal benefit society which does not carry such reserve liability,\nthe net amount of uncollected premiums.\n (6) Premiums in course of collection, other than life insurance\npremiums, not more than ninety days past due, less commissions payable\nthereon. The foregoing limitation of ninety days shall not apply to: (i)\npremiums payable directly or indirectly by the United States government\nor any of its instrumentalities, (ii) reinsurance premiums payable by\nceding insurers authorized to transact such business in this state, or\n(iii) reinsurance premiums payable which may be offset by amounts\ncarried by the assuming insurer as liabilities for amounts due to the\nceding insurer for unpaid losses or other mutual debts. However\nreinsurance premiums more than ninety days past due shall not be allowed\nin excess of ten per centum of the reinsurer's total admitted assets as\nshown on its most recent annual statement on file in the office of the\nsuperintendent pursuant to section three hundred seven of this chapter.\n (7) Instalment premiums, other than life insurance premiums, as\nprescribed by regulation.\n (8) Notes and like written obligations, not past due, taken for\npremiums other than life insurance premiums, on policies permitted to be\nissued on such basis, to the extent of the unearned premium reserves\ncarried thereon except as otherwise prescribed by regulation.\n (9) Reinsurance recoverable by a ceding insurer: (i) from an insurer\nauthorized to transact such business in this state, except from a\ncaptive insurance company licensed pursuant to the provisions of article\nseventy of this chapter, in the full amount thereof; (ii) from an\naccredited reinsurer, as defined in subsection (a) of section one\nhundred seven of this chapter, to the extent allowed by the\nsuperintendent on the basis of the insurer's compliance with the\nconditions of any applicable regulation; or (iii) from an insurer not so\nauthorized or accredited or from a captive insurance company licensed\npursuant to the provisions of article seventy of this chapter, in an\namount not exceeding the liabilities carried by the ceding insurer for\namounts withheld under a reinsurance treaty with such unauthorized\ninsurer or captive insurance company licensed pursuant to the provisions\nof article seventy of this chapter as security for the payment of\nobligations thereunder if such funds are held subject to withdrawal by,\nand under the control of, the ceding insurer. Notwithstanding any other\nprovision of this chapter, the superintendent may by regulation\nprescribe the conditions under which a ceding insurer may be allowed\ncredit, as an asset or as a deduction from loss and unearned premium\nreserves, for reinsurance recoverable from an accredited reinsurer, an\ninsurer not authorized in this state or a captive insurance company\nlicensed pursuant to the provisions of article seventy of this chapter.\n (10) Amounts receivable by an assuming insurer for funds withheld by a\nceding insurer under a reinsurance treaty, not exceeding the amounts\ncarried by such assuming insurer as liabilities for unpaid losses and\nreserves under such contracts.\n (11) Amounts receivable under a funding agreement issued pursuant to\nsection three thousand two hundred twenty-two of this chapter.\n (12) Deposits or equities recoverable from underwriting associations,\nsyndicates and reinsurance funds, or from suspended banking\ninstitutions, to the extent deemed by the superintendent available for\nthe payment of losses and claims and at values determined by him.\n (13) (A) Electronic data processing apparatus and related equipment\nconstituting a data processing, record keeping, or accounting system and\noperating system software, provided that such assets shall be deemed\nadmitted, subject to such regulations as may be promulgated by the\nsuperintendent in an amount not to exceed three percent of the insurer's\ncapital and surplus, or such other amount that the superintendent, in a\nregulation, determines to be appropriate in specified circumstances, as\nrequired to be shown on its statutory balance sheet for its most\nrecently filed statement with the superintendent adjusted to exclude any\nnet positive goodwill, electronic data processing apparatus and related\nequipment, operating system software and net deferred tax assets,\nprovided that electronic data processing apparatus and related equipment\nand operating system software shall be amortized over the lesser of its\nuseful life or three years. Nonoperating system software shall be\nnonadmitted and depreciated over the lesser of its useful life or five\nyears.\n (B) Notwithstanding the provisions of subparagraph (A) of this\nparagraph, until December thirty-first, two thousand eleven, electronic\ndata processing apparatus and related equipment constituting a data\nprocessing, record keeping, or accounting system and operating system\nsoftware of article forty-three corporations and public health law\narticle forty-four health maintenance organizations, integrated delivery\nsystems, prepaid health service plans and comprehensive special needs\nplans may be allowed as admitted assets if the cost of each such system\nis fifty thousand dollars or more and provided that such cost shall be\namortized over a period not to exceed ten years. Effective January\nfirst, two thousand twelve, the provisions of subparagraph (A) of this\nparagraph shall apply to article forty-three corporations and public\nhealth law article forty-four health maintenance organizations,\nintegrated delivery systems, prepaid health service plans and\ncomprehensive special needs plans.\n (14) Positive goodwill, provided that such asset shall be deemed\nadmitted, subject to such limitations and conditions in regulations as\nmay be promulgated by the superintendent in an amount not to exceed ten\npercent of the insurer's capital and surplus as required to be shown on\nits statutory balance sheet for its most recently filed statement with\nthe superintendent adjusted to exclude any net positive goodwill,\nelectronic data processing apparatus and related equipment, operating\nsystem software and net deferred tax assets, and provided further that\nsuch positive goodwill shall be amortized in full over the period in\nwhich the insurer benefits economically, not to exceed ten years. When\nnegative goodwill exists, it shall be recorded as a contra-asset.\n (15) Amounts payable to the insurer from the property/casualty\ninsurance security fund on behalf of insureds with medical malpractice\ninsurance claims-made policies pursuant to subparagraph (G) of paragraph\none of subsection (a) of section seven thousand six hundred three of\nthis chapter.\n (16) Gross deferred tax assets, provided that such assets shall be\ndeemed admitted to the extent provided by regulations promulgated by the\nsuperintendent in an amount not to exceed the sum of:\n (A) federal income taxes paid in prior years that can be recovered\nthrough loss carrybacks for existing temporary differences that reverse\nby the end of the subsequent calendar year;\n (B) the lesser of:\n (i) the amount of gross deferred tax assets after the application of\nsubparagraph (A) of this paragraph expected to be realized within one\nyear of the balance sheet date; or\n (ii) ten percent of the insurer's statutory capital and surplus as\nrequired to be shown on its statutory balance sheet for its most\nrecently filed statement with the superintendent adjusted to exclude any\nnet positive goodwill, electronic data processing apparatus and related\nequipment, operating system software and net deferred tax assets; and\n (C) the amount of gross deferred tax assets after application of\nsubparagraphs (A) and (B) of this paragraph that can be offset against\nexisting gross deferred tax liabilities.\n (17) Other assets, not inconsistent with the foregoing provisions,\ndeemed by the superintendent available for the payment of losses and\nclaims, at values determined by the superintendent.\n (18) The superintendent may, be regulation, modify any requirement of\nthis subsection to conform to any subsequent amendment to the accounting\npractices and procedures manual as adopted from time to time by the\nnational association of insurance commissioners.\n (b) Admitted assets may be allowed as deductions from corresponding\nliabilities, liabilities may be charged as deductions from assets, and\ndeductions from assets may be charged as liabilities, in accordance with\nthe form of annual statement applicable to such insurer as prescribed by\nthe superintendent, or otherwise in his discretion.\n (c) The superintendent may by regulation prescribe the application of\nthe provisions of this section.\n