The Life and Health Insurance Company Guaranty Corporation of New York

Covered Contracts

§7703(a)(1) Direct life and health insurance policies, annuity contracts, funding agreements, and supplemental contracts issued by a life insurance company, health insurance company, or property/casualty insurance company licensed to transact life or health insurance or annuities in this state.

Non-Covered Contracts

§7703(b) This article shall not apply to: (1) That portion or part of a variable life insurance policy, variable annuity contract or variable funding agreement not guaranteed by an insurer; (2) That portion or part of any policy, contract or agreement under which the risk is borne by the holder thereof; (3) Any policy, contract, or agreement, or part thereof, assumed by the impaired or insolvent insurer under a contract of reinsurance, other than reinsurance for which assumption certificates have been issued; (4) Any policy, contract, or agreement issued by or through the facilities of the New York Insurance Exchange, Inc., or any similar entity, or pursuant to article sixty-three of this chapter; (5) Any policy, contract, or agreement issued or issued for delivery outside the United States, to the extent it covers persons not citizens or permanent residents of the United States; and (6) Any policy, contract, or agreement payable other than in United States dollars. (Amended effective 11/21/2014)

Non-Resident Coverage

§7703(a)(2)(A)(II). Yes, the Article covers nonresidents under all the following conditions: (I) the insurer that issued the policy, contract or agreement is domiciled in this state; (II) the state or states in which the person resides has or have a guaranty entity similar to the corporation created by this Article; and (III) the person is not eligible for coverage by a guaranty entity in any other state because the insurer was not licensed or authorized in that state at the time specified in that state’s guaranty entity law. (

§7708(b)(3). The corporation's aggregate liability shall not exceed $500,000 for all benefits, including cash values, with respect to any one life, or to the extent benefits are not allocated pursuant to a covered policy to any one life, to any one covered policy; provided, however, (i) aggregate liability does not apply to any group, or blanket accident, or health insurance, or accident and health insurance policy and (ii)that the corporation shall be liable in an amount not to exceed $1,000,000 for all benefits, including cash values, with respect to any group annuity contract (or portion thereof) that does not guaranty benefits with respect to any specific individual identified in the contract and with respect to any funding agreement issued to fund benefits under any employee benefit plan.

Discretionary Triggers

No separate provision.

Mandatory Triggers

§7708(a). When a domestic insurer is an impaired or insolvent insurer.

Foreign Triggers

§7708(b). When a foreign or alien insurer is impaired or insolvent.

"Impaired Insurer"

§7705(f). Actual impairment, as defined in Sections 1310 and 1311, and placement under a court order of liquidation, rehabilitation, or conservation.

"Insolvent Insurer"

§7705(g). A member insurer which after the effective date of this article becomes insolvent for the purposes of §1309 of this chapter and is placed under a final order of liquidation, rehabilitation or conservation by a court of competent jurisdiction.

"Member Insurer"

§ 7705(h) "Member insurer" means: “Member insurer” means: (A) any life insurance company licensed to transact in this state any kind of insurance to which this article applies under section seven thousand seven hundred three of this article; provided, however, that the term “member insurer” also means any life insurance company formerly licensed to transact in this state any kind of insurance to which this article applies under section seven thousand seven hundred three of this article; and (B) an insurer licensed or formerly licensed to write accident and health insurance or salary protection insurance in this state, corporation organized pursuant to article forty-three of this chapter, reciprocal insurer organized pursuant to article sixty-one of this chapter, cooperative property/casualty insurance company operating under or subject to article sixty-six of this chapter, nonprofit property/casualty insurance company organized pursuant to article sixty-seven of this chapter, and health maintenance organization certified pursuant to article forty-four of the public health law.

§7706(a). Two accounts: (1) health, and (2) life, annuity and funding agreements.

Assessment Limits

§7709(e)(2) The total of all assessments upon a member insurer for each account shall not in any one calendar year exceed two percent of such insurer's premiums received in this state during the calendar year preceding the assessment on the policies covered by the account. If the maximum assessment, together with the other assets of the corporation in either account, does not provide in any one year in either account an amount sufficient to carry out the responsibilities of the corporation, the necessary additional funds shall be assessed as soon thereafter as permitted by this article.

Assessment Classes

§7709(b). Three classes of assessments: Class A for administrative costs, general expenses and examinations; Class B to carry out the powers and duties of the association with regard to an impaired/insolvent domestic insurer; and Class C to carry out the powers and duties of the association with regard to an impaired/insolvent foreign or alien insurer.

§7708(c)(3). If the superintendent or the corporation shall find that at the time a covered annuity contract or funding agreement or a class thereof, other than an annuity contract, funding agreement or class thereof which funds a compromise or settlement contained in a judgment or order entered pursuant to the provisions of section twelve hundred seven of the civil practice law and rules, was issued by the impaired or insolvent insurer the interest rate guaranteed under such contract or agreement or class thereof was clearly excessive, the superintendent may petition the court having juris-diction in this state, upon appropriate notice to and opportunity for submission of comments from the corporation and owners of contracts and agreements proposed to be affected, to limit the corporation's obligations under this article with respect to payment of interest to an interest rate which the court finds would have been appropriate and rea-sonable at the time the contract or agreement or class thereof was issued. Nothing in this subsection shall limit the rights of a holder of a contract or agreement so affected as against the impaired or insolvent insurer.

§7712(b)(2)(A)(B). Yes. In any given year, if the net assessment for all NY companies exceeds $100M over the previous 15 year period, then each company can take a credit in the current year for an amount based on a formula involving a factor of 80% and the amount of assessments in excess of $100M.

§ 7705 (i) “Premiums” means direct gross insurance premiums and annuity and funding agreement considerations received on covered policies, less return premiums and considerations thereon and dividends paid or credited to policyholders or contract holders on such direct business, subject to such modifications as the superintendent may establish by regulation or order as necessary to facilitate the equitable administration of this article. Premiums do not include premiums and considerations on contracts between insurers and reinsurers. For the purposes of determining the assessment for an insurer under this article, the term “premiums”, with respect to a group annuity contract (or portion of any such contract) that does not guarantee annuity benefits to any specific individual identified in the contract and with respect to any funding agreement issued to fund benefits under any employee benefit plan, means the lesser of one million dollars or the premium attributable to that portion of such group contract that does not guarantee benefits to any specific individuals or such agreements that fund benefits under any employee benefit plan.

§ 7718 “Prohibited advertisement of the corporation in sale of insurance” No person, including an insurer, agent or affiliate of an insurer and no broker shall make, publish, disseminate, circulate or place before the public, or cause directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement which uses the existence of the corporation for the purpose of sales, solicitation or inducement to purchase any form of insurance covered by this article, provided, however, that this § shall not apply to the corporation or any other entity which does not sell or solicit insurance, or to prohibit the furnishing of written information in a form prepared by the corporation and approved by the superintendent by a member insurer directly to a policyholder in response to a written request therefore.