N.Y. Insurance Law § 4219: Limitation on accumulation of surplus of life insurance companies

§ 4219. Limitation on accumulation of surplus of life insurance

companies. (a) (1) Any domestic mutual life insurance company may

maintain a surplus, above all of its reserves and liabilities required

or specifically permitted by this chapter, not exceeding the greatest of

(A) eight hundred fifty thousand dollars, or (B) ten percent of its

policy reserves and policy liabilities, or (C) ten percent of its policy

reserves and policy liabilities plus (i) the product of three and its

authorized control level RBC as determined in accordance with section

one thousand three hundred twenty-two of this chapter minus (ii) the

asset valuation reserve as reported in its annual statement, or (D) the

minimum amount of capital and surplus required by law of another state

in which the company is authorized to do business.

(2) Any domestic stock life insurance company issuing participating

policies only or both participating and non-participating policies or

contracts in accordance with subsection (f) of section four thousand two

hundred thirty-one of this article, may maintain a participating

policyholders' surplus, above all of its reserves and liabilities

arising out of participating policies, required or specifically

permitted by the provisions of this chapter, not exceeding the greatest

of (A) two hundred fifty thousand dollars, or (B) ten percent of such

policy reserves and such policy liabilities, or (C) ten percent of such

policy reserves and policy liabilities plus the amount derived by

prorating, based upon the ratio of participating assets to admitted

assets, (i) the product of three and its authorized control level RBC as

determined in accordance with section one thousand three hundred

twenty-two of this chapter minus (ii) the asset valuation reserve as

reported in its annual statement.

(3) In this section, "policy reserves and policy liabilities" includes

reserves and liabilities on outstanding life insurance policies,

accident and health insurance policies and annuity contracts, contracts

supplemental thereto or in connection therewith or provisions included

therein insuring against disability or against death by accident and

including liabilities required under optional modes of settlement and

for dividends left on deposit, after deducting the net value of its

risks reinsured by other solvent assuming insurers. Policy reserves and

liabilities shall also include the reserves and liabilities of the

domestic life insurance company and the policy reserves and liabilities

of any and all wholly-owned subsidiary life insurance companies of the

domestic life insurance company, to the extent that the surpluses of

such subsidiary life insurance companies are included in the surplus of

the domestic life insurance company for purposes of determining the

limit pursuant to this section.

(4) In the case of a mutual life insurance company that is reorganized

into a stock life insurance company under section seven thousand three

hundred twelve of this chapter, the limitation contained in paragraph

one of this subsection shall not affect that part of the existing

surplus of such reorganized company that is allocated to participating

policies and contracts of the mutual life insurance company which is in

excess of such limitation on the effective date of the reorganization,

provided such excess, in addition to any further accretions occurring in

the normal course of business, shall be equitably distributed to these

participating policyholders and contractholders over a period not to

exceed ten years.

(b) The superintendent may, for good cause shown, by order, permit any

such company to maintain a surplus in excess of the maximum prescribed

by subsection (a) hereof, for a specified period, not exceeding one year

under any one order. The superintendent shall state in such order his

reasons therefor and shall cause a statement of such order and such

reasons to be published in his next annual report to the legislature.

(c) This section shall not apply to any stock life insurance company

doing exclusively a non-participating business.