N.Y. Insurance Law § 1301: Admitted assets

§ 1301. Admitted assets. (a) In determining the financial condition of

a domestic or foreign insurer or the United States branch of an alien

insurer for the purposes of this chapter, there may be allowed as

admitted assets of such insurer, unless otherwise specifically provided

in this chapter, only the following assets owned by such insurer

(1) Cash, including legal tender or the equivalent in any office of

such insurer or in transit under its control and the true balance of any

deposit in a solvent bank, trust company or thrift institution.

(2) Investments acquired or held in accordance with the applicable

provisions of this chapter, and the income due or accrued thereon

subject to paragraphs three and four of this subsection as to dividends,

interest, rents and accrued taxes paid.

(3) Declared and unpaid dividends on shares, unless the amount has

otherwise been allowed as an admitted asset.

(4) Investment income due and accrued. Such amounts shall be assessed

for collectibility. If it is probable that the investment income due and

accrued balance is uncollectible, the amount shall be written off and

shall be charged against investment income in the period such

determination is made. Any remaining investment income due and accrued

(i.e., amounts considered probable of collection) representing either

(i) amounts that are over ninety days past due (generated by any

invested asset except mortgage loans in default), or (ii) amounts

otherwise designated as nonadmitted shall be considered nonadmitted. If

a mortgage loan in default has interest one hundred eighty days past due

that has been assessed as collectible, all interest shall be considered

a nonadmitted asset. Such nonadmitted amounts shall be subject to

continuing assessments of collectibility and, if determined to be

uncollectible, a write-off shall be recorded in the period such

determination is made. For purposes of this paragraph, "probable" shall

mean that the future event or events are likely to occur.

(5) Premium notes, policy loans and other policy assets and liens on

policies, contracts or certificates of a life insurance company or

fraternal benefit society, in an amount not exceeding the legal reserve

and other policy liabilities carried on each individual contract; the

net amount of uncollected and deferred premiums, considerations or

assessments of a life insurance company or of a fraternal benefit

society which carries the full mean tabular reserve liability; for a

fraternal benefit society which does not carry such reserve liability,

the net amount of uncollected premiums.

(6) Premiums in course of collection, other than life insurance

premiums, not more than ninety days past due, less commissions payable

thereon. The foregoing limitation of ninety days shall not apply to: (i)

premiums payable directly or indirectly by the United States government

or any of its instrumentalities, (ii) reinsurance premiums payable by

ceding insurers authorized to transact such business in this state, or

(iii) reinsurance premiums payable which may be offset by amounts

carried by the assuming insurer as liabilities for amounts due to the

ceding insurer for unpaid losses or other mutual debts. However

reinsurance premiums more than ninety days past due shall not be allowed

in excess of ten per centum of the reinsurer's total admitted assets as

shown on its most recent annual statement on file in the office of the

superintendent pursuant to section three hundred seven of this chapter.

(7) Instalment premiums, other than life insurance premiums, as

prescribed by regulation.

(8) Notes and like written obligations, not past due, taken for

premiums other than life insurance premiums, on policies permitted to be

issued on such basis, to the extent of the unearned premium reserves

carried thereon except as otherwise prescribed by regulation.

(9) Reinsurance recoverable by a ceding insurer: (i) from an insurer

authorized to transact such business in this state, except from a

captive insurance company licensed pursuant to the provisions of article

seventy of this chapter, in the full amount thereof; (ii) from an

accredited reinsurer, as defined in subsection (a) of section one

hundred seven of this chapter, to the extent allowed by the

superintendent on the basis of the insurer's compliance with the

conditions of any applicable regulation; or (iii) from an insurer not so

authorized or accredited or from a captive insurance company licensed

pursuant to the provisions of article seventy of this chapter, in an

amount not exceeding the liabilities carried by the ceding insurer for

amounts withheld under a reinsurance treaty with such unauthorized

insurer or captive insurance company licensed pursuant to the provisions

of article seventy of this chapter as security for the payment of

obligations thereunder if such funds are held subject to withdrawal by,

and under the control of, the ceding insurer. Notwithstanding any other

provision of this chapter, the superintendent may by regulation

prescribe the conditions under which a ceding insurer may be allowed

credit, as an asset or as a deduction from loss and unearned premium

reserves, for reinsurance recoverable from an accredited reinsurer, an

insurer not authorized in this state or a captive insurance company

licensed pursuant to the provisions of article seventy of this chapter.

(10) Amounts receivable by an assuming insurer for funds withheld by a

ceding insurer under a reinsurance treaty, not exceeding the amounts

carried by such assuming insurer as liabilities for unpaid losses and

reserves under such contracts.

(11) Amounts receivable under a funding agreement issued pursuant to

section three thousand two hundred twenty-two of this chapter.

(12) Deposits or equities recoverable from underwriting associations,

syndicates and reinsurance funds, or from suspended banking

institutions, to the extent deemed by the superintendent available for

the payment of losses and claims and at values determined by him.

(13) (A) Electronic data processing apparatus and related equipment

constituting a data processing, record keeping, or accounting system and

operating system software, provided that such assets shall be deemed

admitted, subject to such regulations as may be promulgated by the

superintendent in an amount not to exceed three percent of the insurer's

capital and surplus, or such other amount that the superintendent, in a

regulation, determines to be appropriate in specified circumstances, as

required to be shown on its statutory balance sheet for its most

recently filed statement with the superintendent adjusted to exclude any

net positive goodwill, electronic data processing apparatus and related

equipment, operating system software and net deferred tax assets,

provided that electronic data processing apparatus and related equipment

and operating system software shall be amortized over the lesser of its

useful life or three years. Nonoperating system software shall be

nonadmitted and depreciated over the lesser of its useful life or five

years.

(B) Notwithstanding the provisions of subparagraph (A) of this

paragraph, until December thirty-first, two thousand eleven, electronic

data processing apparatus and related equipment constituting a data

processing, record keeping, or accounting system and operating system

software of article forty-three corporations and public health law

article forty-four health maintenance organizations, integrated delivery

systems, prepaid health service plans and comprehensive special needs

plans may be allowed as admitted assets if the cost of each such system

is fifty thousand dollars or more and provided that such cost shall be

amortized over a period not to exceed ten years. Effective January

first, two thousand twelve, the provisions of subparagraph (A) of this

paragraph shall apply to article forty-three corporations and public

health law article forty-four health maintenance organizations,

integrated delivery systems, prepaid health service plans and

comprehensive special needs plans.

(14) Positive goodwill, provided that such asset shall be deemed

admitted, subject to such limitations and conditions in regulations as

may be promulgated by the superintendent in an amount not to exceed ten

percent of the insurer's capital and surplus as required to be shown on

its statutory balance sheet for its most recently filed statement with

the superintendent adjusted to exclude any net positive goodwill,

electronic data processing apparatus and related equipment, operating

system software and net deferred tax assets, and provided further that

such positive goodwill shall be amortized in full over the period in

which the insurer benefits economically, not to exceed ten years. When

negative goodwill exists, it shall be recorded as a contra-asset.

(15) Amounts payable to the insurer from the property/casualty

insurance security fund on behalf of insureds with medical malpractice

insurance claims-made policies pursuant to subparagraph (G) of paragraph

one of subsection (a) of section seven thousand six hundred three of

this chapter.

(16) Gross deferred tax assets, provided that such assets shall be

deemed admitted to the extent provided by regulations promulgated by the

superintendent in an amount not to exceed the sum of:

(A) federal income taxes paid in prior years that can be recovered

through loss carrybacks for existing temporary differences that reverse

by the end of the subsequent calendar year;

(B) the lesser of:

(i) the amount of gross deferred tax assets after the application of

subparagraph (A) of this paragraph expected to be realized within one

year of the balance sheet date; or

(ii) ten percent of the insurer's statutory capital and surplus as

required to be shown on its statutory balance sheet for its most

recently filed statement with the superintendent adjusted to exclude any

net positive goodwill, electronic data processing apparatus and related

equipment, operating system software and net deferred tax assets; and

(C) the amount of gross deferred tax assets after application of

subparagraphs (A) and (B) of this paragraph that can be offset against

existing gross deferred tax liabilities.

(17) Other assets, not inconsistent with the foregoing provisions,

deemed by the superintendent available for the payment of losses and

claims, at values determined by the superintendent.

(18) The superintendent may, be regulation, modify any requirement of

this subsection to conform to any subsequent amendment to the accounting

practices and procedures manual as adopted from time to time by the

national association of insurance commissioners.

(b) Admitted assets may be allowed as deductions from corresponding

liabilities, liabilities may be charged as deductions from assets, and

deductions from assets may be charged as liabilities, in accordance with

the form of annual statement applicable to such insurer as prescribed by

the superintendent, or otherwise in his discretion.

(c) The superintendent may by regulation prescribe the application of

the provisions of this section.