Authorizes the superintendent of financial services to authorize the return of subscribing member operating reserve balances to members of a municipal insurance reciprocal.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3466
SPONSOR: McDonald TITLE OF BILL:
An act to amend the insurance law, in relation to authorizing the super-
intendent of financial services to authorize the return of subscribing
member operating reserve balances to members of a municipal insurance
reciprocal
SUMMARY OF SPECIFIC PROVISIONS:
Amends paragraph 3 of subsection (a) of section 6109 of the insurance
law to allow municipal reciprocal insurers to authorize the return of
any outstanding subscriber operating reserve balance.
JUSTIFICATION:
The New York Municipal Insurance Reciprocal (NYMIR) is a licensed prop-
erty and casualty insurance program formed in 1993 in order to provide
essential property and liability coverage for New York's general-purpose
local governments. Beginning with just 26 members (called Subscribers),
it now includes 926 counties, cities, towns, and villages from across
New York State. The mission of NYMIR was to provide a stable, predict-
able insurance market for local governments and it has succeeded in
doing so for 27 years. Rated A- Excellent by AM Best, NYMIR is a finan-
cially secure vehicle which has been able to maintain stable and reduced
member premiums.
Over its history, NYMIR has been able to build necessary surplus that,
under existing provisions of the NYS Insurance Law which this legis-
lation seeks to amend that requires that it fund member operating
reserves with 25% of any.annual underwriting profit. With a rating from
AM best reflecting a secure capital position, NYMIR now seeks to return
the outstanding balances that currently remain inaccessible in members'
operating reserve accounts. This would amount to approximately $6.3
million dollars shared amongst municipal members.
At a time when the impacts of COVID-19 and related events have dramat-
ically impacted municipal revenue streams and put local government budg-
ets under great financial stress, this legislation would provide mean-
ingful and immediate relief to the majority of New York's local
governments which have come together to participate in the NYMIR cooper-
ative insurance program.
PRIOR LEGISLATIVE HISTORY:
2019-2020: A.10820 FISCAL IMPLICATIONS: None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
3466
2021-2022 Regular Sessions
IN ASSEMBLY
January 26, 2021
___________
Introduced by M. of A. McDONALD, GALEF, DICKENS -- read once and
referred to the Committee on Insurance
AN ACT to amend the insurance law, in relation to authorizing the super-
intendent of financial services to authorize the return of subscribing
member operating reserve balances to members of a municipal insurance
reciprocal
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 3 of subsection (a) of section 6109 of the insur-
2 ance law, as amended by chapter 433 of the laws of 2016, is amended to
3 read as follows:
4 (3) Notwithstanding the foregoing, the superintendent may, upon appli-
5 cation from the attorney-in-fact:
6 (A) approve other methods for accumulating such subscriber's operating
7 reserve; or
8 (B) permit the suspension of the accumulation of the operating reserve
9 for a fiscal year provided that those earnings are returned to the
10 subscriber in accordance with subparagraph (B) of paragraph two of
11 subsection (c) of this section; or
12 (C) in the case of a municipal reciprocal insurer, authorize the
13 return of any outstanding subscriber operating reserve balance.
14 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01939-01-1
