§ 7603 — Property/casualty insurance security fund

New York § 7603

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 76: Property/casualty Security Funds

Text

§ 7603. Property/casualty insurance security fund. (a) (1) The\nproperty/casualty insurance security fund shall be used in the payment\nof allowed claims remaining unpaid, in whole or in part, by reason of\nthe inability due to insolvency of an authorized insurer to meet its\ninsurance obligations under policies:\n (A) on account of claims from motor vehicle accidents as defined in\nsubsection (f) of section seven thousand six hundred two of this\narticle,\n (B) for all of the kinds of insurance specified in paragraphs four\nthrough fourteen, sixteen, nineteen through twenty-one, twenty-four and\nsubparagraphs (A) and (B) of paragraph twenty-six of subsection (a) of\nsection one thousand one hundred thirteen of this chapter with respect\nto coverage of property or risks located or resident in this state, or\noutside this state but within the United States, its possessions and\nterritories, and Canada,\n (C) for the kind of insurance providing disability benefits pursuant\nto article nine of the workers' compensation law issued by an authorized\ninsurer licensed under article forty-one, sixty-one or sixty-six of this\nchapter with respect to coverage of risks located or resident in this\nstate,\n (D) in the kind of insurance providing workers' compensation insurance\npursuant to subsection (j) of section three thousand four hundred twenty\nof this chapter,\n (E) for the insurance provided by the medical malpractice insurance\nassociation,\n (F) for the insurance provided pursuant to subdivision two-a of\nsection seventy-six of the workers' compensation law if and when\noperative,\n (G) for the kinds of credit insurance as defined in subparagraphs (B)\nand (C) of paragraph seventeen of subsection (a) of section one thousand\none hundred thirteen of this chapter, and\n (H) any obligation for the return of unearned premiums on any policy\nspecified in subparagraphs (A), (B), (C), (D), (E), (F) and (G) hereof,\nwhich shall, for the purposes of this article, be deemed to include the\nobligations of an insurer and the medical malpractice insurance\nassociation under medical malpractice claims-made policies to pay to\nsuccessor entities the actuarially appropriate amounts for the provision\nof coverage to comply with the requirements of subsections (b), (c) and\n(d) of section three thousand four hundred thirty-six and paragraphs\ntwo, three and four of subsection (f) of section five thousand five\nhundred four of this chapter.\n (2) No payment from the property/casualty insurance security fund\nshall be made to any person who owns or controls ten percent or more of\nthe voting securities of the insolvent insurer and no payment on any one\nclaim shall exceed one million dollars, provided that the amount of\npayment on a claim and the aggregate for all claims shall be further\nlimited by the provisions of paragraph two of subsection (g) of section\nseven thousand six hundred two of this article.\n (b) (1) Contributions to the property/casualty insurance security fund\nshall be determined on the basis of net direct written premiums on\npolicies insuring property or risks located or resident in this state.\n (2) Every insurer shall pay into such fund, upon filing each quarterly\nreturn pursuant to section seven thousand six hundred five of this\narticle, one-half of one percent of its net direct written premiums as\nshown for the period covered by such return.\n (c) (1) Whenever the superintendent determines, pursuant to section\nseven thousand six hundred six of this article, that the net value of\nthe property/casualty insurance security fund is at least one hundred\nfifty million dollars, no further contributions shall be made after the\nfund year in which the determination is first made, but if thereafter\nthe superintendent determines that payments made from the fund by the\ncommissioner to the superintendent acting as liquidator, rehabilitator\nor conservator have reduced the net value to an amount less than such\namount, the superintendent shall cause contributions to be resumed until\nthe end of the fund year in which he first determines that such net\nvalue exceeds such amount.\n (2) If contributions are so resumed, they shall be apportioned:\n (A) ratably among those kinds of insurance as to which the\ncommissioner made payments during the fund year in which the net value\nof the property/casualty insurance security fund was reduced below such\namount, and\n (B) among insurers in accordance with their respective amounts of net\ndirect premiums written in each such kind of insurance.\n (d) (1) All income earned on moneys in the fund (after deducting any\namounts paid for allowed claims and administrative expenses during the\npreceding year) shall be credited, upon certification by the\nsuperintendent to the commissioner, to the general fund of the state\ntreasury; except that with respect to all such income earned on or after\nJuly first, nineteen hundred seventy-nine such moneys shall be\ndistributed annually in the following manner:\n (A) Pursuant to regulations of the superintendent, the deficit from\nthe operations of the New York property insurance underwriting\nassociation shall be credited with such income earned, upon\ncertification by the superintendent to the commissioner, in a sum not\nexceeding such total income earned or the sum of fifteen million dollars\nwhichever is the lesser in any one year. Such credit shall be in lieu of\na transfer of such funds to the general fund of the state treasury.\n (B) Any balance of earned income shall be credited, upon certification\nby the superintendent to the commissioner, to the general fund of the\nstate treasury; but only when the value of the fund exceeds the sum of\ntwo hundred forty million dollars.\n (2) The superintendent, after consultation with the commissioner, may\nby regulation provide for contributions to be made in the form of\nacceptable securities, and for the management and disposition of such\nsecurities. The income from such securities shall be included in the\ndistribution outlined in paragraph one hereof.\n (3) The superintendent is authorized to use the income earned on the\nmoneys of the fund to offset the deficit of the New York property\ninsurance underwriting association in accordance with subsection (d) of\nsection five thousand four hundred five of this chapter, provided that\nany income earned on the moneys of the fund which in any one year\nexceeds fifteen million dollars or which the superintendent has not\nutilized for the purposes of such subsection shall be credited to the\ncorpus of the fund until the superintendent determines that its net\nvalue is two hundred forty million dollars, and thereafter shall be\ncredited, upon certification by the superintendent to the commissioner,\nto the general fund of the state treasury.\n (e) (1) (A) Notwithstanding any other provision of law to the\ncontrary, the superintendent shall annually no later than November first\nin each year submit to the director of the budget a request for an\nappropriation of ninety million dollars. The governor shall include such\namount in a budget bill for the next state fiscal year. The state\ncomptroller shall encumber the amount so appropriated before the end of\nthe fiscal year for which any such appropriation is made. If for any\nfiscal year commencing on or after April first, nineteen hundred\neighty-three, the governor fails to submit a budget bill containing an\nappropriation in the amount requested by the superintendent or the\nlegislature fails to appropriate the amount in a budget bill submitted\nby the governor for such fiscal year, the amount appropriated for and\nencumbered during the preceding fiscal year shall be payable forthwith\nto the fund on July first of such year in the manner prescribed by law,\nprovided, however, that such amount shall not exceed the amount of\nmoneys transferred to the general fund from the fund pursuant to the\nprovisions of chapter fifty-five of the laws of nineteen hundred\neighty-two.\n (B) Any appropriation made to the fund pursuant to this section shall\nbe included as an asset for the purposes of computing the value or net\nvalue of the fund pursuant to this section.\n (C) Any transfer of moneys from the fund to the general fund in\naccordance with the provisions of chapter fifty-five of the laws of\nnineteen hundred eighty-two is deemed a proper and prudent legal\nundertaking for any state officer with the responsibility for the\ncustody or the investment of the assets of the fund, notwithstanding any\nother provision of law to the contrary.\n (2) Upon certification by the superintendent that further sums, not\nexceeding fifty million dollars in the aggregate, are required by the\npublic motor vehicle liability security fund to meet its obligations and\naccomplish the purposes of this article the commissioner shall transfer\nfrom the assets of the property/casualty insurance security fund to the\npublic motor vehicle liability security fund amounts to be specified by\nthe superintendent. Such sums, not exceeding fifty million dollars in\nthe aggregate, shall be a liability of the public motor vehicle\nliability security fund and shall be repaid to the property/casualty\ninsurance security fund pursuant to a plan of repayment to be prescribed\nby the superintendent which may provide for an increase in the level of\npayments into the fund provided for in subsection (b) of section seven\nthousand six hundred four of this article.\n