§ 7503 — The Life Insurance Guaranty Corporation

§ 7503. The Life Insurance Guaranty Corporation. (a) The non-profit\nbody corporate known as "The Life Insurance Guaranty Corporation"\ncreated pursuant to chapter four hundred eighty-one of the laws of\nnineteen hundred forty-one, is hereby continued. It shall be composed of\nthe superintendent ex-officio and one representative of each life\ninsurance company incorporated or organized under any law of this state\nwhich shall have actively and continuously transacted business in this\nstate for a period of at least three years prior to the effective date\nof article seventy-seven of this chapter. No company shall be eligible\nfor membership in the corporation if a proceeding instituted by the\nsuperintendent pursuant to article seventy-four of this chapter is\npending against it in which event such company shall not be eligible\nuntil the superintendent shall certify that it is so eligible.\n (b) Every such company which shall become eligible for membership in\nthe corporation shall, within forty-five days from the date on which it\nbecomes so eligible, file with the superintendent a certificate\ndesignating its representative for the purposes of such corporation.\nUpon failure of any company to make such designation within the\nforty-five day period, the superintendent shall forthwith make such\ndesignation for and on its behalf and by mail give notice thereof to\nsuch company. The designation, whether made by the company or the\nsuperintendent, may be revoked by the company at any time with or\nwithout cause. Any vacancy by death, resignation or removal shall be\nfilled in the same manner as for the original designation of a\nrepresentative.\n (c) Each such representative shall also be known as a director and all\nrepresentatives and the superintendent shall constitute the board of\ndirectors which shall have complete charge and control of the management\nof the corporation in accordance with the corporate powers hereinafter\nset forth, including power to adopt administrative rules, regulations\nand by-laws advisable for the purposes and objects of the corporation.\nThe superintendent shall be ex-officio chairman of the board.\n (d) No director, officer, agent or other representative of the\ncorporation shall be individually liable to any person, firm or\ncorporation, including the corporation, for any act or omission to act,\nor for any liability incurred or assumed, on behalf of the corporation\nor by virtue hereof. Any such liability so incurred or assumed shall be\ncollectible only out of the fund; nor shall any member company be\nsubject to any liability except for assessment as herein provided.\n (e) The corporation shall be under the immediate supervision of the\nsuperintendent and shall be subject to such provisions of this chapter\nas the superintendent shall deem applicable.\n (f) The corporation shall have the power:\n (1) to use a corporate seal, to contract, to sue and be sued and to\npossess and exercise all powers necessary or convenient for the purposes\nof this article;\n (2) with the approval of the superintendent, to assume, reinsure or\nguaranty, or cause to be assumed, reinsured or guaranteed, partially or\nwholly, any or all policies or contracts of any member company and to\nmake available from the fund such sums as may be necessary for such\npurposes;\n (3) to carry out the provisions of this article, the corporation shall\nhave and may exercise all necessary rights, powers, privileges and\nfranchises of a domestic life insurance company except that it shall not\nbe authorized to issue contracts or policies unless they replace\ncontracts or policies representing obligations in whole or in part of\nanother domestic life insurance company or of the corporation;\n (4) to borrow money for the purposes of the fund with or without\nsecurity and pledge such assets in the fund as security for such loans\nand in connection therewith to rehypothecate any securities or\ncollateral pledged to it by a company, provided, however, that\nobligations of the corporation shall be legal investments for domestic\nlife insurance companies and to the extent authorized by the\nsuperintendent may be carried as admitted assets;\n (5) to collect, or enforce by legal proceedings, if necessary, the\npayment of, all assessments for which any contributor may be liable\nunder this article; to collect any obligation due to the corporation or\nto the fund; and\n (6) to fund a resolution facility established pursuant to section\nseven thousand seven hundred nineteen of this chapter.\n (g) The corporation shall, subject to such terms and conditions as it\nmay impose with the approval of the superintendent, assume, reinsure or\nguaranty the performance of the policies and contracts issued prior to\nthe effective date of article seventy-seven of this chapter by any\nimpaired or insolvent member company, and shall have power to receive,\nown and administer any assets acquired in connection with such\nassumption, reinsurance or guaranty; provided, however, that after the\neffective date of article seventy-seven of this chapter the corporation\nshall have no responsibility with respect to any claim under any such\npolicy or contract except (i) to the extent that the amount of such\nclaim exceeds the portion thereof that is covered under article\nseventy-seven of this chapter, and (ii) with respect to any claim not\ncovered under article seventy-seven of this chapter. As to any policy\nnot in default in the payment of premiums subsequent to any such\nassumption, reinsurance or guaranty, the corporation shall make prompt\npayment of the death benefit due under the terms of the policy.\n (h) Notwithstanding any other provision of this section, no assumption\nby a member company after the effective date of article seventy-seven of\nthis chapter, of the policies or contracts of another member company\nissued prior to the effective date of article seventy-seven of this\nchapter, for which assumption certificates have been issued, shall\nresult in loss by such policies or contracts of the protection provided\nunder this article.\n