Bill Text: NY S04043 | 2011-2012 | General Assembly | Amended

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Bill Title: Relates to expenses incurred during the modernization of mutual and cooperative insurance companies' information systems technology.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2012-01-04 - REFERRED TO INSURANCE [S04043 Detail]

Download: New_York-2011-S04043-Amended.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        4043--A
                              2011-2012 Regular Sessions
                                   I N  S E N A T E
                                    March 15, 2011
                                      ___________
       Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
         printed to be committed to the Committee  on  Insurance  --  committee
         discharged, bill amended, ordered reprinted as amended and recommitted
         to said committee
       AN ACT to amend the insurance law, in relation to encouraging moderniza-
         tion  of  mutual  and  cooperative  insurance  companies'  information
         systems technology
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Subsection  (a)  of section 4110 of the insurance law, as
    2  amended by chapter 527 of the laws  of  2006,  is  amended  to  read  as
    3  follows:
    4    (a) No domestic mutual property/casualty insurance company licensed to
    5  write  a  kind  of  insurance specified in paragraph seven, eight, nine,
    6  ten, eleven,  thirteen,  fourteen,  fifteen,  sixteen  or  seventeen  of
    7  subsection  (a)  of  section  one  thousand one hundred thirteen of this
    8  chapter shall expend in any one calendar year for management expenses  a
    9  greater  amount than thirty percent of the sum of its net premium income
   10  and seventy-five  percent  of  its  investment  income  for  such  year;
   11  provided  that  any  insurer whose principal line of business is medical
   12  malpractice liability insurance or any insurer who is the subject  of  a
   13  proceeding  pursuant  to  article seventy-four of this chapter shall not
   14  expend in any one calendar  year  for  management  expenses,  a  greater
   15  amount  than  thirty  percent  of  its net premium income for such year.
   16  Management expenses shall be held to include all expenses of the company
   17  except expenses incurred in the investigation, adjustment and settlement
   18  of claims, taxes, fees and expenses of examination, and  taxes,  repairs
   19  and  expenses on real estate. In applying the provisions of this section
   20  the net premium income of, and expenses of, boiler and machinery  insur-
   21  ance or elevator insurance shall not be included.  IN THE EVENT EXPENSES
   22  INCURRED  IN  MAKING  A  NEW  SYSTEM UPGRADE RESULT IN THIS SUBSECTION'S
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10052-02-1
       S. 4043--A                          2
    1  MANAGEMENT EXPENSES LIMIT BEING EXCEEDED, THEN THE INSURER SHALL  INFORM
    2  THE  SUPERINTENDENT  SIXTY  DAYS  IN  ADVANCE OF THE EXPENSE LIMIT BEING
    3  EXCEEDED. SUBJECT TO APPROVAL BY THE SUPERINTENDENT, THE LIMIT SHALL  BE
    4  TEMPORARILY  RAISED TO THE AMOUNT NECESSARY TO ENCOMPASS THE AFORESTATED
    5  NEW SYSTEM UPGRADE, PROVIDED THAT IN NO EVENT SHALL THE LIMIT BE  RAISED
    6  MORE  THAN  FIVE  PERCENTAGE  POINTS AND SHALL NOT BE IN EFFECT FOR MORE
    7  THAN SIX YEARS. FOR PURPOSES OF THIS SUBSECTION, A NEW SYSTEM UPGRADE IS
    8  DEFINED AS THE ACQUISITION OF ELECTRONIC DATA PROCESSING  APPARATUS  AND
    9  RELATED  EQUIPMENT  CONSTITUTING  A  DATA  PROCESSING, RECORD KEEPING OR
   10  ACCOUNTING SYSTEM AND OPERATING AND NON-OPERATING SOFTWARE.
   11    S 2. Subsection (a) of section 6613 of the insurance law,  as  amended
   12  by chapter 284 of the laws of 1989, is amended to read as follows:
   13    (a)  The  expenses of management of any co-operative property/casualty
   14  insurance company shall not exceed in any one  calendar  year  forty-two
   15  and one-half percent of its net premiums written for such year. The term
   16  "net  premiums  written"  means direct premiums written plus reinsurance
   17  assumed less return premiums  and  reinsurance  ceded.    IN  THE  EVENT
   18  EXPENSES  INCURRED  IN  MAKING  A  NEW  SYSTEM  UPGRADE  RESULT  IN THIS
   19  SUBSECTION'S MANAGEMENT EXPENSES LIMIT BEING EXCEEDED, THEN THE  INSURER
   20  SHALL  INFORM  THE  SUPERINTENDENT  SIXTY DAYS IN ADVANCE OF THE EXPENSE
   21  LIMIT BEING EXCEEDED. THE LIMIT  SHALL  BE  TEMPORARILY  RAISED  TO  THE
   22  AMOUNT  NECESSARY  TO  ENCOMPASS  THE  AFORESTATED  NEW  SYSTEM UPGRADE,
   23  PROVIDED THAT IN NO EVENT SHALL THE  LIMIT  BE  RAISED  MORE  THAN  FIVE
   24  PERCENTAGE  POINTS  AND  SHALL NOT BE IN EFFECT FOR MORE THAN SIX YEARS.
   25  FOR PURPOSES OF THIS SUBSECTION, A NEW SYSTEM UPGRADE IS DEFINED AS  THE
   26  ACQUISITION  OF  ELECTRONIC DATA PROCESSING APPARATUS AND RELATED EQUIP-
   27  MENT CONSTITUTING A DATA PROCESSING, RECORD KEEPING OR ACCOUNTING SYSTEM
   28  AND OPERATING AND NON-OPERATING SOFTWARE.
   29    S 3. This act shall take effect immediately.