N.Y. Insurance Law § 4519: Impairment of reserves and surplus; order to make good deficiency

§ 4519. Impairment of reserves and surplus; order to make good

deficiency. (a) Whenever the superintendent determines that the admitted

assets of an authorized society will be less than the sum of its

required reserves, accrued liabilities, and minimum surplus within a

period of five years or less, the superintendent may, in his or her

discretion, require submission of reports, business plans or other

information demonstrating the steps the society is taking to address the

deficiency and require that such society take such actions as the

superintendent deems necessary and appropriate to maintain the minimum

surplus amount, including, but not limited to, prohibiting such society

from issuing any new contracts of insurance in this state, and in the

case of a domestic society, from issuing any new contracts in this state

or elsewhere.

(b)(1) Whenever the superintendent determines that the admitted assets

of an authorized society are less than the sum of its required reserves,

accrued liabilities, and minimum surplus, he or she shall determine the

amount of such deficiency and issue a written requisition to such

society to remove, repair or make good such deficiency within such

period as he or she shall designate, not less than thirty days nor more

than six months from the service of such requisition, except that if he

or she believes the interests of the certificate holders of such society

will best be served by extending such period of time, he or she may do

so for such period or periods of time as he or she, in his or her

discretion deems best. He or she may also prohibit such society, while

such deficiency exists, from issuing any new contracts of insurance in

this state, and in the case of a domestic society, from issuing any new

contracts in this state or elsewhere. If such society shall fail or be

unable to make good such deficiency within such period as so extended,

the superintendent shall proceed against such society under the

provisions of article seventy-four of this chapter on the ground that

its further transaction of business will be hazardous to its

policyholders, its creditors or the public.

(2) In the event that the superintendent determines that the admitted

assets of a domestic society are less than the sum of its required

reserves, accrued liabilities, and minimum surplus, the superintendent

shall have the power and authority to require that the society merge or

otherwise consolidate with another willing authorized society or that

the society cede any individual risk or risks, in whole or in part, to a

willing society or life insurer.

(c) An authorized society may assess members as described in

subsection (g) of section four thousand five hundred four of this

article only after such assessment is filed with the superintendent and

approved by him or her, or, in the case of a foreign or alien society,

after approval of the insurance department of the state of domicile and

upon notice to the superintendent. The superintendent shall have the

authority to prohibit any foreign or alien society that has assessed its

members from issuing any new contracts of insurance in this state.