N.Y. Insurance Law § 7503: The Life Insurance Guaranty Corporation

§ 7503. The Life Insurance Guaranty Corporation. (a) The non-profit

body corporate known as "The Life Insurance Guaranty Corporation"

created pursuant to chapter four hundred eighty-one of the laws of

nineteen hundred forty-one, is hereby continued. It shall be composed of

the superintendent ex-officio and one representative of each life

insurance company incorporated or organized under any law of this state

which shall have actively and continuously transacted business in this

state for a period of at least three years prior to the effective date

of article seventy-seven of this chapter. No company shall be eligible

for membership in the corporation if a proceeding instituted by the

superintendent pursuant to article seventy-four of this chapter is

pending against it in which event such company shall not be eligible

until the superintendent shall certify that it is so eligible.

(b) Every such company which shall become eligible for membership in

the corporation shall, within forty-five days from the date on which it

becomes so eligible, file with the superintendent a certificate

designating its representative for the purposes of such corporation.

Upon failure of any company to make such designation within the

forty-five day period, the superintendent shall forthwith make such

designation for and on its behalf and by mail give notice thereof to

such company. The designation, whether made by the company or the

superintendent, may be revoked by the company at any time with or

without cause. Any vacancy by death, resignation or removal shall be

filled in the same manner as for the original designation of a

representative.

(c) Each such representative shall also be known as a director and all

representatives and the superintendent shall constitute the board of

directors which shall have complete charge and control of the management

of the corporation in accordance with the corporate powers hereinafter

set forth, including power to adopt administrative rules, regulations

and by-laws advisable for the purposes and objects of the corporation.

The superintendent shall be ex-officio chairman of the board.

(d) No director, officer, agent or other representative of the

corporation shall be individually liable to any person, firm or

corporation, including the corporation, for any act or omission to act,

or for any liability incurred or assumed, on behalf of the corporation

or by virtue hereof. Any such liability so incurred or assumed shall be

collectible only out of the fund; nor shall any member company be

subject to any liability except for assessment as herein provided.

(e) The corporation shall be under the immediate supervision of the

superintendent and shall be subject to such provisions of this chapter

as the superintendent shall deem applicable.

(f) The corporation shall have the power:

(1) to use a corporate seal, to contract, to sue and be sued and to

possess and exercise all powers necessary or convenient for the purposes

of this article;

(2) with the approval of the superintendent, to assume, reinsure or

guaranty, or cause to be assumed, reinsured or guaranteed, partially or

wholly, any or all policies or contracts of any member company and to

make available from the fund such sums as may be necessary for such

purposes;

(3) to carry out the provisions of this article, the corporation shall

have and may exercise all necessary rights, powers, privileges and

franchises of a domestic life insurance company except that it shall not

be authorized to issue contracts or policies unless they replace

contracts or policies representing obligations in whole or in part of

another domestic life insurance company or of the corporation;

(4) to borrow money for the purposes of the fund with or without

security and pledge such assets in the fund as security for such loans

and in connection therewith to rehypothecate any securities or

collateral pledged to it by a company, provided, however, that

obligations of the corporation shall be legal investments for domestic

life insurance companies and to the extent authorized by the

superintendent may be carried as admitted assets;

(5) to collect, or enforce by legal proceedings, if necessary, the

payment of, all assessments for which any contributor may be liable

under this article; to collect any obligation due to the corporation or

to the fund; and

(6) to fund a resolution facility established pursuant to section

seven thousand seven hundred nineteen of this chapter.

(g) The corporation shall, subject to such terms and conditions as it

may impose with the approval of the superintendent, assume, reinsure or

guaranty the performance of the policies and contracts issued prior to

the effective date of article seventy-seven of this chapter by any

impaired or insolvent member company, and shall have power to receive,

own and administer any assets acquired in connection with such

assumption, reinsurance or guaranty; provided, however, that after the

effective date of article seventy-seven of this chapter the corporation

shall have no responsibility with respect to any claim under any such

policy or contract except (i) to the extent that the amount of such

claim exceeds the portion thereof that is covered under article

seventy-seven of this chapter, and (ii) with respect to any claim not

covered under article seventy-seven of this chapter. As to any policy

not in default in the payment of premiums subsequent to any such

assumption, reinsurance or guaranty, the corporation shall make prompt

payment of the death benefit due under the terms of the policy.

(h) Notwithstanding any other provision of this section, no assumption

by a member company after the effective date of article seventy-seven of

this chapter, of the policies or contracts of another member company

issued prior to the effective date of article seventy-seven of this

chapter, for which assumption certificates have been issued, shall

result in loss by such policies or contracts of the protection provided

under this article.