On June 20, 2013, the New York legislature passed Bills A07807A/S04329-A (the “Amendments”). The purpose of the Amendments is to adopt recent changes to the National Association of Insurance Commissioners’ (“NAIC”) Model Holding Company System Regulatory Act (the “Model Act”). Earlier this year, the New York Department of Financial Services (“DFS”) adopted several amendments to Insurance Regulation 52 to conform with these changes to the Model Act.
The Amendments would, among other things:
- empower the superintendent to participate in a supervisory college to regulate insurers with international operations and share confidential and privileged materials with members of a supervisory college;
- require holding companies to adopt a formal enterprise risk management function and to file an enterprise risk report with the superintendent by April 30 of each year;
- require a domestic insurer to provide 45-days prior notice to the superintendent of reinsurance treaties or agreements entered into with its affiliates, and increase the thresholds for when notice is required of sales, purchases, exchanges, loans, or extensions of credit between the domestic insurer and any person in its holding company system;
- require 30-days prior notice to the superintendent from any domestic insurer seeking to divest its controlling interest in another domestic insurer;
- establish new prior notice filing requirements for transactions between a domestic insurer and its subsidiaries or a parent corporation of a domestic insurer and its subsidiaries;
- require production of information not in the possession of an insurer if the insurer can gain access to it;
- require registration by parent corporations of domestic insurers, in addition to registration as a controlling person;
- require amendment of registration by parent corporations and domestic insurers within 30 days if there is a material change in the information in the registration; and
- provide discretionary authority to the superintendent to examine charitable annuity societies who have not obtained a permit because their reserves do not exceed $1 million.
The New York legislature believes that “[e]nactment of the [A]mendments would provide uniformity with other states and will improve efficiency by reducing the number of certain holding company filings” and may be necessary in order to maintain New York’s NAIC accreditation. Of particular note, the Amendments do not include the Model Act provisions regarding confidentiality of materials filed with state regulators from public disclosure. According to the Reinsurance Association of America, the DFS intends to rely on the confidentiality protections currently provided under New York law, which it considers sufficient for such purposes. Upon enactment by the Governor, most of the Amendments would take effect immediately, while some that relate to the new enterprise risk report requirements will take effect 90 days after enactment.
Click here for the complete text of the Amendments.