N.Y. Insurance Law § 8021: Limitations on accumulation of surplus of mutual holding companies

§ 8021. Limitations on accumulation of surplus of mutual holding

companies. (a) A mutual holding company may maintain (1) a non-insurance

surplus not exceeding the aggregate capital and surplus of its insurance

subsidiaries and (2) aggregate capital and surplus of its insurance

subsidiaries not exceeding the surplus limit of its insurance

subsidiaries, unless otherwise approved by the superintendent.

(b) As used in this section, the following terms shall have the

following meanings:

(1) "Non-insurance surplus" means the mutual holding company's net

worth, determined in accordance with generally accepted accounting

principles on a consolidated basis, excluding the portion thereof

derived from its interest in its insurance subsidiaries.

(2) "Insurance subsidiary" means a subsidiary of the mutual holding

company that is a domestic insurer, a foreign insurer, an alien insurer

or (notwithstanding its exemption from this chapter) a health

maintenance organization.

(3) "Aggregate capital and surplus" of a mutual holding company's

insurance subsidiaries means the sum of:

(A) for each subsidiary that is a life insurance company and is not a

subsidiary of another life insurance company, its statutory capital and

surplus;

(B) for each subsidiary that is an insurance company other than a life

insurance company, a health maintenance organization or a subsidiary of

another insurance subsidiary, its statutory capital and surplus; and

(C) for each subsidiary that is a health maintenance organization and

is not a subsidiary of an insurance subsidiary, thirty-five percent of

its net premium written in the preceding calendar year.

(4) "Surplus limit" of a mutual holding company's insurance

subsidiaries means the aggregate of:

(A) for each subsidiary that is a life insurance company and is not a

subsidiary of another life insurance company, the greater of (i) eight

hundred fifty thousand dollars, or (ii) ten percent of its policy

reserves and policy liabilities, or (iii) ten percent of the policy

reserves and policy liabilities of such life insurance company and of

all subsidiaries of such company that are insurance companies, plus (x)

the product of three and the authorized control level RBC of such life

insurance company as determined in accordance with section one thousand

three hundred twenty-two of this chapter or corresponding provisions of

the law of its state of domicile, plus (y) for each subsidiary of such

domestic life insurance company that is a health maintenance

organization, thirty-five percent of its net premium written in the

preceding calendar year, minus (z) the asset valuation reserves of such

life insurance company and of all subsidiaries of such company that are

life insurance companies, or (iv) the minimum amount of capital and

surplus required by the law of another state in which such life

insurance company is authorized to do business, all as determined in

accordance with accounting practices prescribed or permitted by the

superintendent, in the case of domestic insurers, or the principal

regulator of any insurance subsidiary that is not a domestic insurer;

(B) for each subsidiary that is an insurance company other than a life

insurance company, a health maintenance organization or a subsidiary of

another insurance subsidiary, its statutory capital and surplus; and

(C) for each subsidiary that is a health maintenance organization and

is not a subsidiary of an insurance subsidiary, thirty-five percent of

its net premium written in the preceding calendar year;

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

such mutual holding company to maintain a surplus in excess of the

maximum prescribed by subsection (a) of this section, for a specified

period, not exceeding one year under any one order. The superintendent

shall state in such order the reasons therefor and shall cause a

statement of such order and such reasons to be published in the next

annual report of the superintendent to the legislature.