N.Y. Insurance Law § 7719: Resolution facility

§ 7719. Resolution facility. (a) The corporation may incorporate one

or more not-for-profit corporations, known as a resolution facility, in

connection with the liquidation of an insolvent domestic life insurance

company, health insurance company, or property/casualty insurance

company under article seventy-four of this chapter for the purpose of

administering and disposing of the business of the insolvent insurance

company.

(b) To the extent that the provisions of the not-for-profit

corporation law do not conflict with the provisions of this section or

the plan of operation of the resolution facility hereunder, the

not-for-profit corporation law shall apply to the resolution facility

and the resolution facility shall be a non-charitable corporation

pursuant to the not-for-profit corporation law. If an applicable

provision of this section or the plan of operation of the resolution

facility hereunder relates to a matter embraced in a provision of the

not-for-profit corporation law but is not in conflict therewith, then

both provisions shall apply. The corporation shall be a member of the

resolution facility, and other persons, including the life insurance

guaranty corporation continued under article seventy-five of this

chapter and guaranty entities of other states, may become members of the

resolution facility in accordance with the resolution facility's

certificate of incorporation and plan of operation.

(c) In addition to its certificate of incorporation, a resolution

facility shall submit to the superintendent a plan of operation, and

amendments thereto, necessary or suitable to assure the fair,

reasonable, and equitable administration of the resolution facility. The

plan of operation, and any amendments thereto, shall become effective

upon approval in writing by the superintendent. The plan of operation

shall constitute the bylaws of the resolution facility.

(d) A resolution facility may:

(1) guarantee, assume, or reinsure, or cause to be guaranteed,

assumed, or reinsured, the covered policies, or arrange for replacement

by policies found by the superintendent to be substantially similar to

the covered policies;

(2) exercise, for the purposes of this article and to the extent

approved by the superintendent, the powers of a domestic life insurance

company, health insurance company, or property/casualty insurance

company but in no case may the resolution facility issue insurance

policies, annuity contracts, funding agreements, or supplemental

contracts other than those issued to perform the contractual obligations

of the impaired or insolvent insurer;

(3) assure payment of the contractual obligations of the insolvent

insurer; and

(4) provide such moneys, pledges, notes, guarantees, or other means as

are reasonably necessary to discharge its duties.

(e) A resolution facility shall not be subject to any provisions of

this chapter or the financial services law except:

(1) this section; and

(2) sections seven thousand seven hundred fourteen, seven thousand

seven hundred fifteen, and seven thousand seven hundred sixteen of this

article, which shall apply in the same manner as they apply to the

corporation.

(f) Notwithstanding subsection (e) of this section, the superintendent

may address to the resolution facility any inquiry in relation to its

transactions or condition or any matter connected therewith pursuant to

section three hundred eight of this chapter.

(g) (1) If the superintendent determines that the resolution facility

is not administering and disposing of the business of an insolvent

domestic life insurance company, health insurance company, or

property/casualty insurance company consistent with the resolution

facility's certificate of incorporation, plan of operation, or this

section, then the superintendent shall provide notice to the resolution

facility and the resolution facility shall have thirty days to respond

to the superintendent and cure the defect.

(2) If, after thirty days, the superintendent continues to believe

that the resolution facility is not administering and disposing of the

business of an insolvent domestic life insurance company, health

insurance company, or property/casualty insurance company consistent

with the resolution facility's certificate of incorporation, plan of

operation, or this section, then the superintendent may apply to the

court for an order directing the resolution facility to correct the

defect or take other appropriate actions.