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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4043
                              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
       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
   23  MANAGEMENT EXPENSES LIMIT BEING EXCEEDED, THEN THE LIMIT SHALL BE TEMPO-
   24  RARILY  RAISED  TO THE AMOUNT NECESSARY TO ENCOMPASS THE AFORESTATED NEW
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10052-01-1
       S. 4043                             2
    1  SYSTEM UPGRADE, PROVIDED THAT IN NO EVENT SHALL THE LIMIT BE RAISED MORE
    2  THAN FIVE PERCENTAGE POINTS. FOR PURPOSES  OF  THIS  SUBSECTION,  A  NEW
    3  SYSTEM UPGRADE IS DEFINED AS THE ACQUISITION, THROUGH PURCHASE, LEASE OR
    4  PURCHASE-LEASE  AGREEMENT,  OF  ELECTRONIC DATA PROCESSING APPARATUS AND
    5  RELATED EQUIPMENT CONSTITUTING A  DATA  PROCESSING,  RECORD  KEEPING  OR
    6  ACCOUNTING SYSTEM AND OPERATING AND NON-OPERATING SOFTWARE.
    7    S  2.  Subsection (a) of section 6613 of the insurance law, as amended
    8  by chapter 284 of the laws of 1989, is amended to read as follows:
    9    (a) The expenses of management of any  co-operative  property/casualty
   10  insurance  company  shall  not exceed in any one calendar year forty-two
   11  and one-half percent of its net premiums written for such year. The term
   12  "net premiums written" means direct premiums  written  plus  reinsurance
   13  assumed  less  return  premiums  and  reinsurance  ceded.   IN THE EVENT
   14  EXPENSES INCURRED  IN  MAKING  A  NEW  SYSTEM  UPGRADE  RESULT  IN  THIS
   15  SUBSECTION'S  MANAGEMENT  EXPENSES  LIMIT BEING EXCEEDED, THEN THE LIMIT
   16  SHALL BE TEMPORARILY RAISED TO THE AMOUNT  NECESSARY  TO  ENCOMPASS  THE
   17  AFORESTATED  NEW  SYSTEM  UPGRADE,  PROVIDED  THAT IN NO EVENT SHALL THE
   18  LIMIT BE RAISED MORE THAN FIVE PERCENTAGE POINTS. FOR PURPOSES  OF  THIS
   19  SUBSECTION,  A NEW SYSTEM UPGRADE IS DEFINED AS THE ACQUISITION, THROUGH
   20  PURCHASE, LEASE OR PURCHASE-LEASE AGREEMENT, OF ELECTRONIC DATA PROCESS-
   21  ING APPARATUS AND RELATED  EQUIPMENT  CONSTITUTING  A  DATA  PROCESSING,
   22  RECORD  KEEPING  OR  ACCOUNTING  SYSTEM  AND OPERATING AND NON-OPERATING
   23  SOFTWARE.
   24    S 3. This act shall take effect immediately.