§ 7719 — Resolution facility

§ 7719. Resolution facility. (a) The corporation may incorporate one\nor more not-for-profit corporations, known as a resolution facility, in\nconnection with the liquidation of an insolvent domestic life insurance\ncompany, health insurance company, or property/casualty insurance\ncompany under article seventy-four of this chapter for the purpose of\nadministering and disposing of the business of the insolvent insurance\ncompany.\n (b) To the extent that the provisions of the not-for-profit\ncorporation law do not conflict with the provisions of this section or\nthe plan of operation of the resolution facility hereunder, the\nnot-for-profit corporation law shall apply to the resolution facility\nand the resolution facility shall be a non-charitable corporation\npursuant to the not-for-profit corporation law. If an applicable\nprovision of this section or the plan of operation of the resolution\nfacility hereunder relates to a matter embraced in a provision of the\nnot-for-profit corporation law but is not in conflict therewith, then\nboth provisions shall apply. The corporation shall be a member of the\nresolution facility, and other persons, including the life insurance\nguaranty corporation continued under article seventy-five of this\nchapter and guaranty entities of other states, may become members of the\nresolution facility in accordance with the resolution facility's\ncertificate of incorporation and plan of operation.\n (c) In addition to its certificate of incorporation, a resolution\nfacility shall submit to the superintendent a plan of operation, and\namendments thereto, necessary or suitable to assure the fair,\nreasonable, and equitable administration of the resolution facility. The\nplan of operation, and any amendments thereto, shall become effective\nupon approval in writing by the superintendent. The plan of operation\nshall constitute the bylaws of the resolution facility.\n (d) A resolution facility may:\n (1) guarantee, assume, or reinsure, or cause to be guaranteed,\nassumed, or reinsured, the covered policies, or arrange for replacement\nby policies found by the superintendent to be substantially similar to\nthe covered policies;\n (2) exercise, for the purposes of this article and to the extent\napproved by the superintendent, the powers of a domestic life insurance\ncompany, health insurance company, or property/casualty insurance\ncompany but in no case may the resolution facility issue insurance\npolicies, annuity contracts, funding agreements, or supplemental\ncontracts other than those issued to perform the contractual obligations\nof the impaired or insolvent insurer;\n (3) assure payment of the contractual obligations of the insolvent\ninsurer; and\n (4) provide such moneys, pledges, notes, guarantees, or other means as\nare reasonably necessary to discharge its duties.\n (e) A resolution facility shall not be subject to any provisions of\nthis chapter or the financial services law except:\n (1) this section; and\n (2) sections seven thousand seven hundred fourteen, seven thousand\nseven hundred fifteen, and seven thousand seven hundred sixteen of this\narticle, which shall apply in the same manner as they apply to the\ncorporation.\n (f) Notwithstanding subsection (e) of this section, the superintendent\nmay address to the resolution facility any inquiry in relation to its\ntransactions or condition or any matter connected therewith pursuant to\nsection three hundred eight of this chapter.\n (g) (1) If the superintendent determines that the resolution facility\nis not administering and disposing of the business of an insolvent\ndomestic life insurance company, health insurance company, or\nproperty/casualty insurance company consistent with the resolution\nfacility's certificate of incorporation, plan of operation, or this\nsection, then the superintendent shall provide notice to the resolution\nfacility and the resolution facility shall have thirty days to respond\nto the superintendent and cure the defect.\n (2) If, after thirty days, the superintendent continues to believe\nthat the resolution facility is not administering and disposing of the\nbusiness of an insolvent domestic life insurance company, health\ninsurance company, or property/casualty insurance company consistent\nwith the resolution facility's certificate of incorporation, plan of\noperation, or this section, then the superintendent may apply to the\ncourt for an order directing the resolution facility to correct the\ndefect or take other appropriate actions.\n