Authorizes the return of any operating reserve balances of members of a municipal insurance reciprocal upon the municipal reciprocal insurer's demonstration that it will retain sufficient surplus to support its obligations and writings.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8712
SPONSOR: McDonald
 
TITLE OF BILL:
An act to amend the insurance law, in relation to authorizing the return
of any operating reserve balances of members of a municipal insurance
reciprocal
 
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to make clarifying changes to Chapter 649 of
the Laws of 2021 to ensure that the Superintendent of Financial Services
may authorize the return of subscribing member operating reserve
balances to members of a municipal insurance reciprocal upon such insur-
er's demonstration that it will retain sufficient surplus to support its
obligations and writings.
 
SUMMARY OF SPECIFIC PROVISIONS:
The bill amends paragraph 3 of subsection (C) of section 6109 of the
insurance law to allow municipal reciprocal insurers to authorize the
return of any outstanding subscriber operating reserve balance only upon
such insurer's demonstration that it will retain sufficient surplus to
support its obligations and writings.
 
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. NYMIR has been able to build necessary surplus over
time that, under existing provisions of the NYS Insurance Law which this
legislation seeks to amend that requires that it fund member operating
reserves with 25% of any annual underwriting profit. 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.
This bill would amend Chapter 649 of the Laws of 2021 to ensure that
municipal insurance reciprocals maintain an appropriate surplus to
support its obligations and writings in the event of claims prior to the
Superintendent of Financial Services authorizing the release of the
outstanding subscriber operating reserve balance.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
EFFECTIVE DATE:
This act shall take effect Immediately.
STATE OF NEW YORK
________________________________________________________________________
8712
IN ASSEMBLY
January 11, 2022
___________
Introduced by M. of A. McDONALD -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to authorizing the return
of any operating reserve balances of 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. Subparagraph (C) of paragraph 3 of subsection (a) of
2 section 6109 of the insurance law, as amended by a chapter of the laws
3 of 2021 amending the insurance law relating to authorizing the super-
4 intendent of financial services to authorize the return of subscribing
5 member operating reserve balances to members of a municipal insurance
6 reciprocal, as proposed in legislative bills numbers S. 4112 and A.
7 3466, is amended to read as follows:
8 (C) in the case of a municipal reciprocal insurer, authorize the
9 return of any outstanding subscriber operating reserve balance upon the
10 municipal reciprocal insurer's demonstration that it will retain suffi-
11 cient surplus to support its obligations and writings.
12 § 2. This act shall take effect on the same date and in the same
13 manner as a chapter of the laws of 2021 amending the insurance law
14 relating to authorizing the superintendent of financial services to
15 authorize the return of subscribing member operating reserve balances to
16 members of a municipal insurance reciprocal, as proposed in legislative
17 bills numbers S. 4112 and A. 3466, takes effect.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01939-02-2