NYS Rules at 3/28/12

Checking in with the Executive Branch rules in NYS at 3/28/12:



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NYS Rules at 3/21/12

Following the NYS Executive Branch Departments & Agencies:

Updates to NYS Rules at 3/21/12



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NYS Executive Branch Rules at 3/14/12

Keeping up with New York State developments from Albany  the Departments and Agencies and the Rules that define new York State Government from the Executive Branch:



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New York State - Insurance Laws - Article 14 Investments § 1410 Derivative Transactions and Derivative Instruments

With a look at the connecting point of Financial Services in the Investments Realm and the Insurance Industry a quick look at one of the NYS Insurance Laws relative to Insurance investments in Derivative Transactions and Derivative Instruments:


§ 1410. Derivative transactions and derivative instruments. (a) For purposes of this section, except subsection (k) of this section, an insurer shall mean a domestic life insurer, a domestic property/casualty insurer, a domestic reciprocal insurer, a domestic mortgage guaranty insurer, a domestic co-operative property/casualty insurance corporation or a domestic financial guaranty insurer. (b) (1) An insurer may only engage in derivative transactions pursuant to and in compliance with the requirements of this section. Any insurer subject to the provisions of subsection (c) of section one thousand four hundred three of this article shall also comply with the requirements set forth in such subsection relative to derivative transactions authorized by this section. (2) An insurer may use derivative instruments under this section to engage in hedging transactions, replication transactions, and for certain limited income generation transactions authorized pursuant to this section. (3) Prior to entering into any derivative transaction authorized pursuant to this section: (A) the board of directors of the insurer or a committee thereof charged with the responsibility for supervising investments shall: (i) authorize such transactions, (ii) assure that all individuals conducting, monitoring, controlling and auditing derivative transactions are suitably qualified and have appropriate levels of knowledge and experience, and (iii) approve a derivative use plan for such transactions or an amendment to a previously adopted derivative use plan. If such determinations are made by a committee of such a board, the minutes of the committee reflecting such determinations shall be recorded and a report thereon shall be submitted to the board of directors for its review at such board's next meeting; (B) the insurer shall submit a written derivative use plan or amendment thereto to the superintendent for approval; and (C) the superintendent shall approve the insurer's written derivative plan for engaging in derivative transactions and investment practices related to derivative transactions. The plan shall specify guidelines as to the quality, maturity and diversification of derivative investments and other specifications, including investment strategies, asset/liability management practices, its liquidity needs and its capital and surplus as they relate to the derivative use plan. The board of directors or a committee thereof charged with the responsibility for supervising investments shall determine at least quarterly whether all derivative transactions have been made in accordance with delegations, standards, limitations and investment objectives prescribed in the insurer's derivatives use plan. If such determinations are made by a committee of such a board, the minutes of the committee reflecting such determinations shall be recorded and a report thereon shall be submitted to the board of directors for its review at such board's next meeting. (D) (i) Within ninety days of receipt of a derivative use plan application, the superintendent shall, in writing, approve, submit a detailed list to the insurer requesting all additional information necessary to make a determination on the plan, or deny such plan; otherwise, such plan shall be deemed approved. Any denial issued by the superintendent shall state the reasons for such disapproval. If an insurer does not provide the additional information requested by the superintendent, within forty-five days of receipt of such request, then such plan shall be deemed denied. Such forty-five day limit for providing such additional information may be extended at the option of the superintendent.

    (ii) In the event that an  insurer  properly  submits  the  additional
  information  requested  by  the  superintendent, then such plan shall be
  deemed approved sixty days after receipt  of  such  information  by  the
  superintendent,  unless the insurer is notified in writing prior to such
  date  that  the  filing  has  been  denied.  Such denial shall state the
  reasons for such disapproval. Notwithstanding anything to  the  contrary
  in  this  section, the superintendent may, at any time, before a plan is
  approved, affirmatively approved or denied, raise objections to the plan
  that is based on the requirements of this chapter.
    (iii) The superintendent shall, as soon as practicable, but  no  later
  than  sixty  days  after  receipt  of  a plan, notify the insurer if its
  filing is incomplete or fails to comply  with  applicable  statutory  or
  regulatory  requirements.  Such notice shall indicate that the filing is
  being returned with no action by the superintendent and that the  period
  for the superintendent's substantive review has not commenced.
    (4)  An  insurer  which engages in hedging transactions or replication
  transactions as authorized pursuant to this section shall:
    (A)  only  maintain  its  position  in  any   outstanding   derivative
  instrument  used  as  part  of  a  hedging  transaction  or  replication
  transaction for as  long  as  the  hedging  transaction  or  replication
  transaction, as the case may be, continues to be effective; and
    (B)  be  able to demonstrate to the superintendent, upon request, that
  any  derivative  transaction  entered  into  and  involving  a   hedging
  transaction  or  replication  transaction,  at the point of inception is
  and, for as long as  the  derivative  transaction  remains  outstanding,
  continues to be, an effective hedging or replication transaction.
    (5) An insurer which enters into derivative transactions as authorized
  pursuant  to  this  section shall be required to include, as part of the
  evaluation of accounting procedures and internal controls required to be
  filed pursuant to subsection (b) of section three hundred seven of  this
  chapter,  a  statement  describing  the  assessment  by  the independent
  certified  public  accountant  of  the  internal  controls  relative  to
  derivative transactions. If the internal controls relative to derivative
  transactions  are  determined to be deficient, the insurer shall require
  the accountant to include  in  the  evaluation  a  description  of  such
  deficiencies   and   the  insurer  shall  append  to  the  evaluation  a
  description of any remedial actions taken or proposed  to  be  taken  to
  correct these deficiencies, if such actions are not already described in
  the accountant's report.
    (c)(1) An insurer may enter into hedging transactions pursuant to this
  section if, as a result of and after giving effect to the transaction:
    (A)  the aggregate statement value of options, swaptions, caps, floors
  and warrants purchased pursuant to this section does  not  exceed  seven
  and one-half percent of its admitted assets;
    (B)  the  aggregate statement of value of options, swaptions, caps and
  floors written pursuant to this section does not exceed three percent of
  its admitted assets; and
    (C) the aggregate potential exposure of collars, swaps,  forwards  and
  futures  entered  into  and  options, swaptions, caps and floors written
  pursuant to this section does not exceed six and one-half percent of its
  admitted assets.
    (2) Transactions entered into to effectively hedge the  currency  risk
  of  investments  denominated  in  a  currency  other  than United States
  dollars, pursuant to subparagraph (C) of paragraph seven  of  subsection
  (a) of section one thousand four hundred five of this article, shall not
  be included in the limits under paragraph one of this subsection.
    (d)  An  insurer  may  enter into income generation transactions under
  this section only through  the  sale  of  call  options  on  securities,

  provided  that the insurer holds, or can immediately acquire through the
  exercise of options, warrants or conversion rights  already  owned,  the
  underlying   securities   during   the   entire  period  the  option  is
  outstanding.
    (e) An insurer may purchase or sell one or more derivative instruments
  to offset any derivative instrument previously purchased or sold, as the
  case   may  be,  without  regard  to  the  quantitative  limitations  of
  subsection (c) of this section provided that such derivative  instrument
  is an exact offset to the original derivative instrument being offset.
    (f)(1) The counterparty exposure under a derivative instrument entered
  into by an insurer authorized to engage in transactions pursuant to this
  section  shall be deemed to be an obligation of the institution to which
  the insurer  is  exposed  to  credit  risk  and  shall  be  included  in
  determining   compliance  with  any  single  or  aggregate  quantitative
  limitation on investments made by an insurer under this chapter.
    (2) Notwithstanding any single or aggregate quantitative limitation on
  investments made  by  an  insurer  under  this  chapter,  the  aggregate
  counterparty exposure under one or more derivative transactions to:
    (A)  any  single  counterparty, other than a "qualified counterparty",
  shall be limited to one percent of an insurer's admitted assets; and
    (B) all  counterparties,  other  than  qualified  counterparties,  are
  limited to three percent of an insurer's admitted assets.
    (3) For purposes of this section:
    (A)  a "qualified counterparty" is a "qualified broker or dealer" or a
  "qualified bank" or other counterparty rated  AA-/Aa3  or  higher  by  a
  nationally  recognized  statistical  rating  organization  if it is also
  approved by the superintendent;
    (B) a "qualified broker or dealer" means a broker or  dealer  that  is
  organized  under  the  laws  of  a  state  and  is  registered under the
  Securities Exchange Act of 1934, 15 U.S.C.  §§  78a-78kk,  and  has  net
  capital in excess of two hundred fifty million dollars;
    (C) a "qualified bank" means a bank or trust company that:
    (i) is organized and existing, or in the case of a branch or agency of
  a foreign banking organization is licensed, under the laws of the United
  States or any state thereof;
    (ii) is regulated, supervised and examined by United States federal or
  state  authorities  having  regulatory  authority  over  banks and trust
  companies;
    (iii) has assets in excess of five billion dollars;
    (iv) has senior obligations outstanding, or has a  parent  corporation
  that  has  senior  obligations  outstanding,  rated AA or better (or the
  equivalent thereto) by two independent nationally recognized statistical
  rating organizations; and
    (v) has a ratio of primary capital to total assets of  at  least  five
  and  one-half percent and a ratio of total capital to total assets of at
  least six percent; and
    (D) "aggregate counterparty  exposure"  means  the  sum  of:  (i)  the
  aggregate  statement  value  of  options,  swaptions,  caps, floors, and
  warrants  purchased;  and  (ii)  the  aggregate  potential  exposure  of
  collars, swaps, forwards and futures entered into.
    (g)  For  the  purposes  of  this section, "admitted assets" means the
  assets, as shown on the insurer's last annual statement filed  with  the
  superintendent,  which  conform  to  the  requirements  of  section  one
  thousand three hundred one of this chapter, except that a domestic  life
  insurer shall include assets held in separate accounts established under
  section four thousand two hundred forty of this chapter to the extent of
  amounts  allocated to such separate accounts pursuant to paragraph three
  of subsection (a) of section four thousand two  hundred  forty  of  this

  chapter,  and  shall  exclude investments in subsidiaries referred to in
  subsection (c) of section  one  thousand  seven  hundred  four  of  this
  chapter.
    (h) The superintendent shall promulgate regulations to:
    (1) define terms used in this section that are not otherwise defined;
    (2)  establish  the content of the derivative use plan to be submitted
  by an insurer to the superintendent pursuant to this section;
    (3) establish  effective  management  oversight  standards,  including
  quarterly  reporting  to  the  board of directors or a committee thereof
  charged  with  the  responsibility  for  supervising  investments,   for
  transactions authorized pursuant to this section;
    (4)  require  that  the insurer establish adequate systems of internal
  control  and  reporting  to  ensure  that  derivative  transactions  are
  properly  supervised  and  that  transactions are in accordance with the
  insurer's authorized policies and procedures;
    (5)   establish   documentation   and   reporting   requirements   for
  transactions authorized pursuant to this section;
    (6)   establish   appropriate   accounting  standards  for  derivative
  transactions authorized pursuant to this section; and
    (7) the provisions of this section shall not be  deemed  to  authorize
  the superintendent to promulgate any rule or regulation, circular letter
  or  directive, that in any way expands the superintendent's authority to
  (i) approve or regulate an  insurer's  entire  investment  portfolio  or
  investment  strategy,  or  (ii) impose standards on corporate governance
  that are either stricter or contrary to the provisions contained in this
  article or the business corporation law.
    (i) For purposes of  other  provisions  of  this  chapter,  derivative
  instruments  and derivative transactions entered into under this section
  shall be deemed  to  be  investments,  provided  that  if  this  section
  conflicts  with  any other provisions of this chapter, the provisions of
  this section shall prevail.
    (j) The superintendent may order an insurer  to  cease  effecting  and
  maintaining  transactions authorized by this section upon a finding that
  continued  operations  hereunder  could  be  detrimental  to  the   best
  interests of the policyholders or the public.
    (k)  Any  foreign  insurer  engaging  in  derivative  transactions and
  derivative instruments shall be subject  to  and  comply  with  all  the
  provisions  of  this  section.  However, a foreign insurer may engage in
  derivative transactions not authorized by this  section  provided  that:
  (1)  such  insurer is authorized to engage in such transactions pursuant
  to its domestic state law; (2)  such  insurer  includes  the  intent  to
  engage  in  such  derivative  transactions  in  the  derivative use plan
  submitted to and approved by the superintendent  pursuant  to  paragraph
  three  of  subsection  (b) of this section; (3) the transactions are not
  deemed, by the superintendent, to  be  potentially  detrimental  to  the
  policy holders or the public in this state; and (4) the insurer complies
  with  subsection  (a)  of  section one thousand four hundred thirteen of
  this article after the surplus to policyholders is reduced by the amount
  of all  derivative  transactions  not  authorized  by  this  section  in
  accordance with the measurement standards of paragraph one of subsection
  (c)  of this section. For purposes of this subsection, a foreign insurer
  shall include foreign insurers as defined  in  paragraph  twenty-one  of
  subsection  (a)  of  section  one hundred seven of this chapter, foreign
  fraternal benefit societies, and accredited reinsurers.
    (l) An insurer may enter into replication transactions provided that:
    (1) the insurer would otherwise be  authorized  to  invest  its  funds
  under this chapter in the asset being replicated;

    (2)  the  asset  being  replicated  is  subject  to all provisions and
  limitations  (including  quantitative  limits)  on  the  making  thereof
  specified in this chapter with respect to investments by the insurer, as
  if the transaction constituted a direct investment by the insurer in the
  asset being replicated; and
    (3)  as  a result of giving effect to the replication transaction, the
  aggregate statement value of all assets being replicated does not exceed
  ten percent of the insurer's admitted assets.

As of read date 3/11/12 ALL New York State Insurance Laws are subject to change and update and you MUST confirm as filing or relying, for best results in interpretation it is advised that you correspond with a New York State Attorney. In New York State the Insurance industry is Regulated under the New York State Financial Services Department.  Consumers with Insurance education needs or related issues are supported by the New York State Financial Services Department at http://www.dfs.ny.gov/insurance/consindx.htm and by the NYS OAG at http://www.ag.ny.gov/our-office .


DCarsonCPA.com the web address of the practice of Dean T. Carson II, CPA following the line of Regulations that pertain to Financial Services and various industries, at the intercepting points of Accounting, Financials, Taxes and corresponding Regulations and Compliance for Financial Decision Makers. Available for Clients on corresponding CPA Services and Advisory, Tax and needs. Find us at www.dcarsoncpa.com or learn more at info@dcarsoncpa.com .

New York State Insurance - Insurance (STAT) Accounting: Admitted Assets, Non Admitted Assets, Loss or Claim Reserves, Valuation Reserves, and Unearned Premium Reserves.

Insurance is regulated at the State Level with specific Statutory (STAT) Accounting Guidlines prescribed at the state level. While the National Membership group is the NAIC and there is the FASB ASC correspondent to Insurance FASB ASC Industry Standards Topic 944 - Financial Services - Insurance for US GAAP guidance at the National level, and the related considerations of the Insurance product in the IRC and State and Local Tax Rules at the various product levels. Here we are just keying in on a few of the select elements of STAT Accounting in New York State Laws for Insurance.

As noted above, below are some Select Laws from New York State with Relevancy to Insurance Accounting and Financial Reporting under New York State Insurance Rules Article 13 - Assets and Deposits pertaining to STAT Accounting:

Admitted Assets:

§ 1301. Admitted assets. (a) In determining the financial condition of a domestic or foreign insurer or the United States branch of an alien insurer for the purposes of this chapter, there may be allowed as admitted assets of such insurer, unless otherwise specifically provided in this chapter, only the following assets owned by such insurer (1) Cash, including legal tender or the equivalent in any office of such insurer or in transit under its control and the true balance of any deposit in a solvent bank, trust company or thrift institution. (2) Investments acquired or held in accordance with the applicable provisions of this chapter, and the income due or accrued thereon subject to paragraphs three and four of this subsection as to dividends, interest, rents and accrued taxes paid. (3) Declared and unpaid dividends on shares, unless the amount has otherwise been allowed as an admitted asset. (4) Investment income due and accrued. Such amounts shall be assessed for collectibility. If it is probable that the investment income due and accrued balance is uncollectible, the amount shall be written off and shall be charged against investment income in the period such determination is made. Any remaining investment income due and accrued (i.e., amounts considered probable of collection) representing either (i) amounts that are over ninety days past due (generated by any invested asset except mortgage loans in default), or (ii) amounts otherwise designated as nonadmitted shall be considered nonadmitted. If a mortgage loan in default has interest one hundred eighty days past due that has been assessed as collectible, all interest shall be considered a nonadmitted asset. Such nonadmitted amounts shall be subject to continuing assessments of collectibility and, if determined to be uncollectible, a write-off shall be recorded in the period such determination is made. For purposes of this paragraph, "probable" shall mean that the future event or events are likely to occur. (5) Premium notes, policy loans and other policy assets and liens on policies, contracts or certificates of a life insurance company or fraternal benefit society, in an amount not exceeding the legal reserve and other policy liabilities carried on each individual contract; the net amount of uncollected and deferred premiums, considerations or assessments of a life insurance company or of a fraternal benefit society which carries the full mean tabular reserve liability; for a fraternal benefit society which does not carry such reserve liability, the net amount of uncollected premiums. (6) Premiums in course of collection, other than life insurance premiums, not more than ninety days past due, less commissions payable thereon. The foregoing limitation of ninety days shall not apply to: (i) premiums payable directly or indirectly by the United States government or any of its instrumentalities, (ii) reinsurance premiums payable by ceding insurers authorized to transact such business in this state, or (iii) reinsurance premiums payable which may be offset by amounts carried by the assuming insurer as liabilities for amounts due to the ceding insurer for unpaid losses or other mutual debts. However reinsurance premiums more than ninety days past due shall not be allowed in excess of ten per centum of the reinsurer's total admitted assets as shown on its most recent annual statement on file in the office of the superintendent pursuant to section three hundred seven of this chapter. (7) Instalment premiums, other than life insurance premiums, as prescribed by regulation. (8) Notes and like written obligations, not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on such basis, to the extent of the unearned premium reserves carried thereon except as otherwise prescribed by regulation.


(9) Reinsurance recoverable by a ceding insurer: (i) from  an  insurer   authorized  to  transact  such  business  in  this  state, except from a   captive insurance company licensed pursuant to the provisions of article   seventy of this chapter, in  the  full  amount  thereof;  (ii)  from  an   accredited  reinsurer,  as  defined  in  subsection  (a)  of section one   hundred  seven  of  this  chapter,  to  the  extent   allowed   by   the   superintendent  on  the  basis  of  the  insurer's  compliance  with the   conditions of any applicable regulation; or (iii) from an insurer not so authorized or accredited or from a captive  insurance  company  licensed pursuant  to  the  provisions  of article seventy of this chapter, in an   amount not exceeding the liabilities carried by the ceding  insurer  for amounts  withheld  under  a  reinsurance  treaty  with such unauthorized  insurer or captive insurance company licensed pursuant to the provisions of article seventy of this  chapter  as  security  for  the  payment  of obligations  thereunder if such funds are held subject to withdrawal by, and under the control of, the ceding insurer. Notwithstanding any other provision   of this chapter, the superintendent  may  by  regulation

 prescribe the conditions under which a ceding  insurer  may  be  allowed credit,  as  an  asset  or as a deduction from loss and unearned premium reserves, for reinsurance recoverable from an accredited  reinsurer,  an insurer  not  authorized  in  this  state or a captive insurance company licensed pursuant to the provisions of article seventy of this chapter.

(10) Amounts receivable by an assuming insurer for funds withheld by a  ceding insurer under a reinsurance treaty,  not  exceeding  the  amounts carried  by  such  assuming insurer as liabilities for unpaid losses and reserves under such contracts.

(11) Amounts receivable under a funding agreement issued  pursuant  to section three thousand two hundred twenty-two of this chapter.

(12)  Deposits or equities recoverable from underwriting associations, syndicates  and   reinsurance   funds,   or   from   suspended   banking institutions,  to  the extent deemed by the superintendent available for the payment of losses and claims and at values determined by him.

(13) (A) Electronic data processing apparatus  and  related  equipment constituting a data processing, record keeping, or accounting system and operating  system  software,  provided  that such assets shall be deemed admitted, subject to such regulations  as  may  be  promulgated  by  the superintendent in an amount not to exceed three percent of the insurer's capital  and surplus, or such other amount that the superintendent, in a regulation, determines to be appropriate in specified circumstances,  as required  to  be  shown  on  its  statutory  balance  sheet for its most recently filed statement with the superintendent adjusted to exclude any net positive goodwill, electronic data processing apparatus and  related equipment,  operating  system  software  and  net  deferred  tax assets, provided that electronic data processing apparatus and related equipment and operating system software shall be amortized over the lesser of  its useful  life  or  three  years.  Nonoperating  system  software shall be nonadmitted and depreciated over the lesser of its useful life  or  five  years.

(B)  Notwithstanding  the  provisions  of  subparagraph  (A)  of  this paragraph, until December thirty-first, two thousand eleven,  electronic data  processing  apparatus  and  related  equipment constituting a data processing, record keeping, or accounting system  and  operating  system software  of  article  forty-three  corporations  and  public health law article forty-four health maintenance organizations, integrated delivery systems, prepaid health service plans and  comprehensive  special  needs plans  may be allowed as admitted assets if the cost of each such system is fifty thousand dollars or more and provided that such cost  shall  be amortized  over  a  period  not  to  exceed ten years. Effective January first, two thousand twelve, the provisions of subparagraph (A)  of  this paragraph  shall  apply  to  article forty-three corporations and public health  law  article  forty-four   health   maintenance   organizations, integrated   delivery   systems,   prepaid   health  service  plans  and comprehensive special needs plans.

(14) Positive goodwill, provided  that  such  asset  shall  be  deemed admitted,  subject  to such limitations and conditions in regulations as may be promulgated by the superintendent in an amount not to exceed  ten percent  of the insurer's capital and surplus as required to be shown on its statutory balance sheet for its most recently filed  statement  with the  superintendent  adjusted  to  exclude  any  net  positive goodwill, electronic data processing apparatus and  related  equipment,  operating system  software  and net deferred tax assets, and provided further that such positive goodwill shall be amortized in full  over  the  period  in which  the  insurer benefits economically, not to exceed ten years. When negative goodwill exists, it shall be recorded as a contra-asset.

(15)  Amounts  payable  to  the  insurer  from  the  property/casualty insurance  security  fund on behalf of insureds with medical malpractice insurance claims-made policies pursuant to subparagraph (G) of paragraph one of subsection (a) of section seven thousand  six  hundred  three  of  this chapter.

(16)  Gross  deferred  tax  assets, provided that such assets shall be deemed admitted to the extent provided by regulations promulgated by the superintendent in an amount not to exceed the sum of:

(A) federal income taxes paid in prior years  that  can  be  recovered through  loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year; (B) the lesser of:  (i) the amount of gross deferred tax assets after the  application  of  subparagraph  (A)  of  this paragraph expected to be realized within one  year of the balance sheet date; or  (ii) ten percent of the insurer's statutory  capital  and  surplus  as required  to  be  shown  on  its  statutory  balance  sheet for its most recently filed statement with the superintendent adjusted to exclude any net positive goodwill, electronic data processing apparatus and  related equipment, operating system software and net deferred tax assets; and (C)  the  amount  of  gross  deferred  tax assets after application of subparagraphs (A) and (B) of this paragraph that can be  offset  against existing gross deferred tax liabilities.

(17)  Other  assets,  not  inconsistent with the foregoing provisions, deemed by the superintendent available for the  payment  of  losses  and claims, at values determined by the superintendent.

(18)  The superintendent may, be regulation, modify any requirement of this subsection to conform to any subsequent amendment to the accounting practices and procedures manual as adopted from  time  to  time  by  the national association of insurance commissioners. (b)  Admitted  assets  may be allowed as deductions from corresponding liabilities, liabilities may be charged as deductions from  assets,  and deductions from assets may be charged as liabilities, in accordance with the form of annual statement applicable to such insurer as prescribed by the superintendent, or otherwise in his discretion. (c)  The superintendent may by regulation prescribe the application of the provisions of this section.

Assets Non-Admitted:

§ 1302. Assets not admitted. (a) In addition to assets not admitted pursuant to section one thousand three hundred one of this article, the following shall not be allowed as admitted assets of a domestic or foreign insurer or the United States branch of an alien insurer in any determination of its financial condition: (1) Trade names, agency plants and other like intangible assets. (2) Prepaid or deferred charges for expenses except as provided in paragraph sixteen of subsection (a) of section one thousand three hundred one of this article, and commissions paid by the insurer. (3) Advances to officers (except policy loans), whether secured or not, and advances to employees, agents and other persons on personal security only. (4) Shares of such insurer, owned by it, or any equity therein or loans secured thereby, or any proportionate interest in such shares through the ownership by such insurer of an interest in another firm, corporation or business unit. (5) Tangible personal property, fixtures and printed matter except such as an insurer is permitted to hold pursuant to paragraph five of subsection (a) of section one thousand four hundred four of this chapter. (6) Items of bank credits representing checks, drafts or notes returned unpaid after the date of statement. (7) The amount, if any, by which the aggregate book value of investments as carried in the ledger assets of such insurer exceeds the aggregate value thereof as determined in accordance with the provisions of this chapter. (b) All non-admitted assets and all other assets of doubtful value or character included as ledger or non-ledger assets in any statement by an insurer to the superintendent, or in any examiner's report to him, shall also be reported, to the extent of the value disallowed, as deductions from the gross assets of such insurer except where the superintendent permits a reserve to be carried among the liabilities of such insurer in lieu of any such deduction.

Loss or Claim Reserves:

§ 1303. Loss or claim reserves. Every insurer shall, except as
provided in section one thousand three hundred four of this article and
subject to specific provisions of this chapter, maintain reserves in an
amount estimated in the aggregate to provide for the payment of all
losses or claims incurred on or prior to the date of statement, whether
reported or unreported, which are unpaid as of such date and for which
such insurer may be liable, and also reserves in an amount estimated to
provide for the expenses of adjustment or settlement of such losses or
claims.

Valuation Reserves:

§ 1304. Valuation reserves. Every insurer authorized under this chapter to transact the kinds of insurance specified in paragraph one, two or three of subsection (a) of section one thousand one hundred thirteen of this chapter shall, subject to specific provisions of this chapter, maintain: (a) reserves on all of its life insurance policies or certificates and annuity contracts in force, computed according to the applicable tables of mortality and rates of interest prescribed in this chapter; (b) reserves for disability benefits, including reserves for disabled lives whether reported or unreported, and for accidental death benefits; and (c) any additional reserves prescribed by the superintendent as necessary on account of such insurer's policies, certificates and contracts.

Unearned Premium Reserves:


§ 1305. Unearned premium reserves. (a) Every authorized insurer shall, except as to reserves required under section one thousand three hundred four of this article and subject to paragraph nine of subsection (a) of section one thousand three hundred one of this article and other specific provisions of this chapter, maintain reserves equal to the unearned portions of the gross premiums charged on unexpired or unterminated risks and policies. (b) (1) No deductions may be made from the gross premiums in force except for original premiums cancelled on risks terminated or reduced before expiration, or except for premiums paid or credited for risks reinsured with other solvent assuming insurers authorized to transact such business in this state. (2) Premiums charged for bulk or portfolio reinsurances assumed from other insurers shall be included as premiums in force on the basis of the original premiums and the original terms of the policies of the ceding insurer. (3) Reinsurance ceded to such an authorized assuming insurer may be deducted on the basis of original premiums and original terms except in the case of excess loss or catastrophe reinsurance which may be deducted only on the basis of actual reinsurance premiums and actual reinsurance terms. (c) (1) The liability for unearned premiums may be computed on the annual pro rata fraction basis applicable to the date of statement as prescribed by the superintendent. (2) If the annual pro rata fractions do not produce an adequate reserve, the superintendent may, in his discretion, require an insurer to calculate its unearned premium reserve upon the monthly pro rata fractional basis or, if necessary, on each respective risk from the date of the issuance of the policy, and as to premiums covering indefinite terms he may prescribe special regulations. (3) As to marine insurance, premiums on trip risks not terminated shall be deemed unearned and the superintendent may require a reserve to be carried thereon equal to one hundred percent of the premiums on trip risks written during the month ended as of the date of statement. (4) At least ninety percent of the gross amount of premium deposits on perpetual fire insurance risks shall be charged as a liability. (5) As to title insurance, unearned premium reserves shall be computed and maintained only as required by subsection (a) of section six thousand four hundred five of this chapter.


As of Read Date 3/11/12 - ALL NYS Insurance Rules are subject to change and update and you MUST confirm as filing or relying. The Industry is regulated at the various State Levels and in NYS by the newly consolidated New York Financial Services Department .





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NYS Executive Branch Rules 3-7-11 Departments & Agencies

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