Bill Text: NY S09632 | 2023-2024 | General Assembly | Introduced

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Bill Title: Enacts the "limited equity cooperative insurance captive authorization and county cap act" to enable limited equity cooperatives in the state of New York to establish insurance captives to enhance their ability to manage risks, improve insurance coverage, and promote financial stability.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-05-16 - REFERRED TO INSURANCE [S09632 Detail]

Download: New_York-2023-S09632-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          9632

                    IN SENATE

                                      May 16, 2024
                                       ___________

        Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
          printed to be committed to the Committee on Insurance

        AN ACT to amend the insurance law, in relation to enacting the  "limited
          equity cooperative insurance captive authorization and county cap act"

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the  "limited  equity  cooperative  insurance  captive authorization and
     3  county cap act".
     4    § 2. Legislative purpose and findings. The purpose of this act  is  to
     5  enable limited equity cooperatives in the state of New York to establish
     6  insurance  captives  to  enhance  their ability to manage risks, improve
     7  insurance coverage, and promote  financial  stability.  Furthermore,  it
     8  aims to prevent concentration of risk by capping the number of insurance
     9  captives that limited equity cooperatives can establish to one per coun-
    10  ty.
    11    § 3. The insurance law is amended by adding a new section 7013 to read
    12  as follows:
    13    §  7013.  Limited equity cooperative insurance captive. (a) As used in
    14  this section, the term "limited equity cooperative" shall mean a limited
    15  equity cooperative organized as a  nonprofit  housing  development  fund
    16  company pursuant to article eleven of the private housing finance law.
    17    (b)  Limited  equity  cooperatives  are hereby authorized to establish
    18  insurance captives for the purpose of providing  insurance  coverage  to
    19  their members and managing related risks.  No limited equity cooperative
    20  shall  hold  more than thirty percent of its risk in the same county and
    21  shall hold no more than sixty percent of its risk in New  York  City.  A
    22  limited  equity  cooperative  insurance captive shall have no fewer than
    23  ten thousand units under its risk management.
    24    (c) The limited equity  cooperative  shall  create  and  organize  the
    25  insurance  captive  in accordance with the requirements set forth by the
    26  department and other applicable  laws  and  regulations.  Any  insurance
    27  captive  established pursuant to the provisions of this section shall be
    28  subject to oversight and regulation by the department.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14162-02-4
        S. 9632                             2

     1    (d) An insurance captive established pursuant  to  the  provisions  of
     2  this  section  shall  be  operated as a distinct entity from the limited
     3  equity cooperative itself, maintaining separate  financial  records  and
     4  accounts.
     5    (e)  A limited equity cooperative insurance captive may offer coverage
     6  for property and casualty risks, liability risks, and  any  other  risks
     7  deemed appropriate by the department, subject to approval of the depart-
     8  ment.
     9    (f) A limited equity cooperative insurance captive shall adhere to all
    10  solvency requirements and financial standards established by department,
    11  ensuring  its  ability to meet the insurance needs of the limited equity
    12  cooperative members.
    13    (g) Participation in the limited equity cooperative insurance  captive
    14  by  limited  equity  cooperative  members shall be voluntary. Any member
    15  opting to participate shall contribute to the limited equity cooperative
    16  insurance captive's capital and premium  reserves  as  required  by  the
    17  captive's policies and procedures.
    18    (h)  The  insurance captive shall be subject to periodic financial and
    19  operational examinations by the department  to  ensure  compliance  with
    20  applicable laws and regulations.
    21    (i)  The department shall establish reporting requirements for limited
    22  equity cooperatives operating  insurance  captives,  including  but  not
    23  limited to financial statements, risk assessments, and claims data.
    24    (j)  The  department shall promulgate all rules and regulations neces-
    25  sary for the implementation of this section.
    26    § 4. Severability. If any clause, sentence, paragraph, section or part
    27  of this act shall be adjudged by any court of competent jurisdiction  to
    28  be  invalid  and  after  exhaustion  of all further judicial review, the
    29  judgment shall not affect, impair or invalidate the  remainder  thereof,
    30  but  shall  be  confined in its operation to the clause, sentence, para-
    31  graph, section or part of this act directly involved in the  controversy
    32  in which the judgment shall have been rendered.
    33    §  5. This act shall take effect on the first of January next succeed-
    34  ing the date on which it shall have become a law. Effective immediately,
    35  the addition, amendment and/or repeal of any rule or  regulation  neces-
    36  sary  for  the  implementation  of  this  act  on its effective date are
    37  authorized to be made and completed on or before such effective date.